29 Jan 2008
1 min read

Win this $100 Raffle and You Could Owe $150K in Income Taxes

The Herald-Mail newspaper had a story about a house being raffled off for charity purposes. The house was appraised for $390,000. The newspaper asked a CPA to figure out what taxes the winner would owe. In this case, a $100 purchase would net you a tax bill of $150K.  But, it would still be worth it, […]
Blog
Table of contents

The Herald-Mail newspaper had a story about a house being raffled off for charity purposes. The house was appraised for $390,000. The newspaper asked a CPA to figure out what taxes the winner would owe. In this case, a $100 purchase would net you a tax bill of $150K. 

But, it would still be worth it, of course. Here's why:

"Nonetheless, paying $100 for a ticket in the ongoing San Mar Children's Home raffle for a $390,000 house still could be a pretty good investment, according to an official with Smith Elliott Kearns & Co. LLC."

You've basically gotten $240,000 worth of house for nothing" if you deal with the tax load by getting a home-equity loan on it for $150,000, said Kristi Glass, a certified public accountant and tax manager for the accounting firm. 

"I mean, most people don't have that low a mortgage on their house. ... So as long as you can afford the payments on the home-equity loan," you're still a winner, Glass said. 

Bruce Anderson, executive director of San Mar, has an alternative solution: You can sell the house.

"I'm saying even if the winner was to turn around and put it on the market for $300,000, they would have no problem at all selling it," Anderson said. "With all this publicity, there's any number of people interested." risis.

Share this post
Copy link
Contact us
Stop worrying about sales tax
Let The Sales Tax People take care of it for you.
Blog Article Form
Latest posts
The Sales Tax Blog
Updates, tips, guides, industry best practices, and news.
View all posts
Join our newsletter
Be in the know: promotions, industry news & insights.
Newsletter Sign Up - "Subscribe"

We care about your data — privacy policy.