Then you get back to the core question of what is "income." Is something "income" if you refuse it? No. Is it "income" if you don't refuse it outright but direct its disposition? That smells a whole lot like an assignment, which would leave our prizewinner on the hook.

I imagine some tax lawyer could point us in the right direction.

SUCKISSTAPLES said:My question for the tax gurus...
why couldnt have Cruz DONATED the prize (the house) to a CHARITY now, with the stipulation he gets to live in it rent free for the next 10, 20 30 or whatever years? Wouldnt that eliminate the tax burden of the house prize, the property taxes and insurance?
Further Wouldnt the deduction for this gift more than pay for any taxes on the $250k and the SUV?
Further if this scheme is workable, why the heck wouldnt a financial planner suggest it?

marketingmike said: He'd still have income of the value of the prize, which could be partially offset by the charitable contribution deduction.

SUCKISSTAPLES said:really? I know thats how it would work if he decided to donate it at this point, since he took it for himself first...
But I thought if you "refuse" the prize upfront and designate it to go to charity its not considered income at all? Or do you just have to refuse it outright?

You are correct that there are prizes that you can designate to a qualified charitable organization and will not be required to be included in the winner’s income under Sec 74(b). However, the prize must be for a “religious, charitable, scientific, educational, artistic, literary or civic achievement” and the winner must have been selected “without any action on his part.” Either of those requirements negated the possibility of assigning the prize in the case of HGTV house.

Assuming the prize had qualified for designaiton and income exclusion, however, I would presume you would not be able to double-dip and get a charitable deduction as well.

If the family were to donate the property now, the problem they would have is with the limitation on the deduction as marketingmike points out. They currently make almost nothing in the way of AGI to allow much of a deduction and there is only a 5 year carryforward available. Unless the prize was awarded this year, they cannot retroactively donate something in order to have the prize income available to raise the contribution ceiling.

Finally, as for donating it and being allowed to live there rent-free, you get no deduction for any amount of economic benefit you receive. So there would be no tangible "benefit" to the family, other than the "warm & fuzzies" from the act of donating.

tjmightymouse said:Ok, why would you own 7 cars...?
So they can use a different car each day of the week.

Use car #1 on Sunday
Use car #2 on Monday
Use car #3 on Tuesday
Use car #4 on Wednesday
Use car #5 on Thursday
Use car #6 on Friday
Use car #7 on Saturday

these guys are in serious hurt...

rinconshop said:SUCKISSTAPLES said:so no income exclusion and charitable deduction? that sucks. thanks wd!


So the best option for someone wins a prize like that is getting the cash equivalent and paying all the taxes up front?

The taxes are due in the year the prize is received regardless of whether you take property or the cash equivalent, but, yes, for someone without adequate financial acumen and discipline, the better option is generally going to be to sell the property.

Mickie3 said:dcwilbur said:ChauncPeppertooth said:Does anyone think its too creepy how he watches the boy with a video camera???? eek!A little weird, yeah, but have you looked at the floor plan for the house? The master suite is literally a separate building from the rest of house. I wouldn't be comfortable with my kids in that kind of arrangement either.

And, considering that you weren't comfortable with that set-up, you, as a rational person, would sell the place and live in a house that you WERE comfortable with, right?

Since the parents are NOT living in the Master Suite (which is actually a separate house), and the dad is "obsessively" watching the kid (age 10) via a closed circuit system, I think he is more than concerned, a nutcase is more what I would call him.

Check out the dad's web-site. Its rather interesting, has links to HGTV; an ad for the house, and priced at 4.9 kk; the realtors name, phone, etc.; a request for offers (in writing) directly to him (bypassing his realtor?); links to his friend's web pages; a place selling junk jewelry; etc. The site is much like what I expected from the dad, so screwed up and incoherent, unplanned, disjointed, etc. that a potential buyer would be turned off by it. (Some of the pics do not load as the pic files are corrupted, the descriptions are "weird" when paired with the pics, etc.) Its definitely worth a look-see.

Dad's web site.

WARNING: DO NOT ATTEMPT TO LOAD THIS SITE WITH DIAL-UP!!!! The 1st pic is 14.7 MB and others are even larger! Small pics are about 5 MB.

Wow, what a terrible website. Not only are sizes of his images huge, they are also very small when they load! You can't click on the pictures either, because they aren't clickable. Very few people would know that you have to go to properties of the image and copy and paste the image address into the URL box, so you see the original, long-loading image that he should have made clickable. The same website could load in about 10 seconds on broadband connection had he used thumbnails for the images instead of a full-resolution picture which isn't even clickable.

LukFilm said:dcwilbur said:
WARNING: DO NOT ATTEMPT TO LOAD THIS SITE WITH DIAL-UP!!!! The 1st pic is 14.7 MB and others are even larger! Small pics are about 5 MB.

Wow, what a terrible website. Not only are sizes of his images huge, they are also very small when they load! You can't click on the pictures either, because they aren't clickable. Very few people would know that you have to go to properties of the image and copy and paste the image address into the URL box, so you see the original, long-loading image that he should have made clickable. The same website could load in about 10 seconds on broadband connection had he used thumbnails for the images instead of a full-resolution picture which isn't even clickable.

He is an idiot. Not only is he trying to sell the house way above value, he's paying for a website. With the huge pictures, he's paying lots of money for that server, etc.

What the heck is a DOG RUN and why does it cost $6000?

richfish13 said:Anyone think we should email this thread to him? lol

Done.

sloth911 said:What the heck is a DOG RUN and why does it cost $6000?

A dog run is basically a fenced in area in your yard so your dog can get exercise when alone. They are usually built for the size of the dog, so he can run a bit and not jump over it and get out and run over, lost, whatever when he is not in the house or on a leash. Also, it contains the area where you get "doggy surprises" in the yard, so you can scoop them before you step in them.

If ol' Don acutally has one or more dogs, this is one of the only reasonably bright things he has done with his new found money. (From the family actions, in particular Ol' Don's, its questionable if they even have any dogs, however. See discussion on hired help and watching kid all the time.)

How could one spend 6K on a dog run? Who knows? Ol' Don may have had the entire yard fenced, but since entire property is only an acre and typically one would not want "doggy surprises" dropped all over the yard, it sounds like they were either ripped off on the price or had the fence done out of some VERY EXPENSIVE technology construction methods (cedar or redwood fencing?)