Friday, January 22, 2010

Taxation related to HGTV dream house

Taxation related to HGTV

It is a well known fact that if you become the winner of HGTV dream house, then it attracts a lot of unnecessary taxation issues. It is all up to the winners whether want to keep the house or not. It has been seen that most of the winners sell their prize off in order to avoid the taxes they have to pay for it.

Hgtv Dream House: Win a Dream House

It is very unfortunate that if we win any kind of prize, it is heavily taxable by government taxing agencies and winning an HGTV Dream house is not a different stream. As per the IRS rules, all awards and prizes including charitable, religious, educational, scientific, literary, civic achievement, artistic or as a result of winning a contest are taxable.

Hgtv Dream House: Build it!

So, the package award won from the HGTV dream home is also unfortunately taxable for the federal income taxes. Usually, these dream homes are worth more than millions of dollars and the tax liability accounts for a huge amount of money on part of the participants. In addition to that, taxes on prizes and real estate taxes are also applicable at government levels.

Hgtv Dream House: Sell your House

Most of the winners of HGTV dream house contests have sold out their houses because even after winning a home worth millions of dollars, most of them cannot afford to live in it and have no other option but to sell them out. After paying all the taxes for their prize, the pleasure of being a winner of the HGTV dream house becomes nominal.