How much do you pay in taxes if you win the HGTV Dream Home?

The Dream Home grand prize—typically $250,000 in cash, a car, and sometimes a boat, in addition to the home itself, usually valued at $1 million or more—comes with a federal income-tax bill of about $700,000, according to an analysis by Vocativ, plus state income and real-estate taxes that vary by location.Click to see full answer. Also to know is, how much do you pay in taxes if you win HGTV Dream Home?(2018′s Dream Home winner took a lump cash option in lieu of the house.) The reason? Taxes. The estimated federal income tax bill on the $2.3 million prize package that Fulkerson won would be about $789,140, according to Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting.Subsequently, question is, do you have to pay taxes on the HGTV Dream Home? The HGTV Dream Home Sweepstakes has an additional tax problem: not only are you hit with a heavy tax bill because the IRS treats you as if you had made an extra few million dollars of salary, but if you choose to keep the house, it comes with its own costs. Moreover, how much taxes do you pay if you win a house? Winning a house in a contest might push you into the 25 percent marginal tax rate. On a $200,000 house won in a contest you would owe an additional $50,000 in federal income tax ($200,000 x . 25 = $50,000). People who win big prizes like houses often end up having to sell them just to satisfy the taxes that are due.How are HGTV Dream Home winners notified?The winner is then notified, usually by an ambush-style announcement where representatives of the Scripps Networks show up at the winner’s home, place of business, or family gathering. However, winners can also be notified by registered mail.

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