Winning the DIY Network’s 2016 Blog Cabin in Panacea, Florida Will Cost You in Income Taxes

Aug 09, 2016

Print Friendly and PDF


DIY Network 2016 Blog Cabin in Panacea, Florida.jpg

This year’s 2016 DIY Network’s Blog Cabin is located in Panacea, Florida. According to the DIY Network contest rules, it comes with the home and furnishings ($854,657 value), $50,000 in cash, a 2016 Mazda CX-5 ($33,725 value), and a John Deere Compact Utility Tractor ($22,790 value) for a total value of $961,172.

Of course, the $50,000 in cash will come in handy because if you win the blog cabin, be prepared for a hefty federal individual income tax bill and, depending on where you live, a state individual income tax bill which I have estimated in this post.

This analysis excludes the multitude of other taxes such as any real estate, deed or transfer taxes and, most especially, the property tax which you pay year, after year, after year . . . well, you get the picture. As they state in the rules: “All costs, taxes, fees, and expenses associated with a prize or the acceptance and use of any element of a prize not specifically addressed above are the sole responsibility of the winner. All federal, state, and local taxes on prize are winner’s responsibility. The Grand Prize Winner will be issued a 1099 tax form for the ARV of the prize.”

Overall, the federal income tax bill for the 2016 DIY Network #BlogCabin comes to a whopping $316,033 or 32.9 percent of the value of the home. (Click to Tweet) (see assumptions below) If you plan on keeping this home, be prepared to take on a second job or take out a home equity loan to pay Uncle Sam as the $50,000 in cash won’t cover it.

Calculating the state income tax owed is much more complicated. Florida does not have a general individual income tax. As a result, your tax bill will be determined in your home state. Unless you are fortunate enough to live in Florida or one of the other 8 states that do not levy a state income tax (Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming), then you will have a state individual income tax bill that is significantly greater than 0.

Table 1 shows the state individual income tax bill that would be owed if you live in the other 41 states. The worst state to live in is be California with a tax bill of $103,069 which brings the combined state and local tax bill to $419,102, or 43.6 percent of the value of the home. Following closely behind are Hawaii (combined tax bill of $409,173, 42.6 percent of the value of the home) and Minnesota (combined tax bill of $400,268, 41.6 percent of the value of the home).

Besides the 9 states without an individual income tax, the next 3 best states to live in are North Dakota (combined tax bill of $342,555, or 35.6 percent of the value of the home), Pennsylvania (combined tax bill of $345,541, or 35.9 percent of the value of the home), and Alabama (combined tax bill $347,180, or 36.1 percent of the value of the home).

Table 1 Federal and State Individual Income Tax Bill for Winning the 2016 DIY Network Blog Cabin in Panacea, Florida.jpg

Interestingly, unlike other contests, DIY Network does not provide an escape hatch by offering cash in lieu of taking possession of the home.

These numbers kind of makes you wonder who the real winner of the 2016 DIY Network #BlogCabin is--the contestant or the government? (Click to Tweet) My suggestion would be to sell the home and outright buy a nice home with the cash and have zero debt.

However, if you decide to keep the home it is very likely that you will need to take a home equity loan on the house (unless you have a few hundred thousand lying around). Using the worst case scenario (California), a $369,102 ($419,102 – the $50,000 in cash) home equity loan over 30 years at 3.23 percent variable interest would cost you $1,602 a month. Though this begs the question with the 2016 DIY Network #BlogCabin—have you really won a house or a sizable mortgage? (Click to Tweet)

If you have had your fill of paying taxes, you could mimic the Free-Staters and buy a house in the handful of America’s tax havens left (all in New Hampshire) where there are no state and local individual income taxes, no state or local sales taxes and very low (in some case no) local property taxes.

Or, if New Hampshire is not your style, you can check out the tax burdens in other states with our unique tax burden app which shows tax burdens by state, by type and over time. If your tax situation is more complicated than what is show here, you can use this individual income tax calculator (thanks to icalculator) to make a more precise estimate.

Also, check out our tax analysis of the recent HGTV 2016 Smart Home, HGTV 2016 Dream Home, HGTV 2015 Urban Oasis, DIY Network 2015 Blog Cabin, HGTV 2015 Smart Home, HGTV 2015 Dream Home, HGTV 2014 Urban Oasis, DIY Network 2014 Blog Cabin, HGTV 2014 Dream Home and HGTV 2014 Smart Home.

Tax assumptions: The tax analysis uses a married couple with two children taking the standard deduction and is based on 2016 law. However, actual income tax paid may be different if new tax laws have taken effect, especially retroactive taxes. Also, the federal government and most states adjust many elements for inflation which might result in a slightly lower tax bill than reported here.

Category: HGTV

J. Scott Moody

Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.

blog comments powered by Disqus

Stay Up-To-Date on Your State's Key Policy Data - Economics, Politics, Demographics - by Joining Our Mailing List Today!

Check Out Our Unique Apps:

U.S. Capitol.jpg

Government Workforce

Tax Squeeze.jpg

Tax Burden

Strings Attached to Federal Dollars.jpg

Federal Tax and Spend

Hundred Dollar Bill.jpg

Cost of Living (COLI)



Measuring a Dollar.jpg

Federal Tax & COLI


Federal Pension

United States Office of Personnel Management Seal.jpg

Federal Payroll

Check out more

Stories from our

Media Partner:

Check Out All Posts For Your State:

Alabama.jpg  Alabama

Alaska.jpg  Alaska   

Arizona.jpg   Arizona 

Arkansas.jpg  Arkansas

California.jpg  California

Colorado.jpg  Colorado

Connecticut.jpg  Connecticut

 Delaware.jpg  Delaware

Florida.jpg  Florida

 Georgia.jpg  Georgia

Hawaii.jpg  Hawaii

  Idaho.jpg  Idaho

   Illinois.jpg  Illinois

   Indiana.jpg  Indiana

  Iowa.jpg  Iowa

  Kansas.jpg  Kansas

  Kentucky.jpg  Kentucky

   Louisiana.jpg  Louisiana

   Maine.jpg  Maine

  Maryland.jpg  Maryland

Massachusetts.jpg  Massachusetts

Michigan.jpg  Michigan

Minnesota.jpg  Minnesota

  Mississippi.jpg  Mississippi

Missouri.jpg  Missouri

Montana.jpg  Montana

Nebraska.jpg  Nebraska

Nevada.jpg  Nevada

New Hampshire.jpg  New Hampshire

New Jersey.jpg  New Jersey

New Mexico.jpg  New Mexico

New York.jpg  New York

North Carolina.jpg  North Carolina

North Dakota.jpg  North Dakota

Ohio.jpg  Ohio

Oklahoma.jpg  Oklahoma

Oregon.jpg  Oregon

Pennsylvania.jpg  Pennsylvania

Rhode Island.jpg  Rhode Island

South Carolina.jpg  South Carolina

South Dakota.jpg  South Dakota

Tennessee.jpg  Tennessee

Texas.jpg  Texas

Utah.jpg  Utah

Vermont.jpg  Vermont

Virginia.jpg  Virginia

Washington.jpg  Washington

West Virginia.jpg  West Virginia

Wisconsin.jpg  Wisconsin

Wyoming.jpg  Wyoming