|
Winning a house fun, but not free
(Bakersfield Californian, The (KRT) Via Acquire Media NewsEdge) Jun. 28--Eight months after winning a house in a charity raffle, Carol Williams says the whole experience was fun but expensive.
Williams was the first winner in Bakersfield Memorial Hospital's House of Hope fundraiser. She knew her $100 ticket was lucky, Williams said, because it was numbered 01984 -- the year of a son's birth and her husband's passing.
Sure enough, the ticket netted her a house in the northeast's Juliana's Garden development, inside City in the Hills. At the time, the brand new house was valued at $345,000. And that meant meeting some hefty tax obligations -- $111,000 worth -- before she could claim the deed.
"You know, it's just such a shock," Williams said. "(Tax collectors) put it in as a lottery win."
After the excitement of having her name called, it was time for the 57-year-old retiree to figure out how to make the windfall work financially.
Bakersfield Memorial Hospital discloses tax ramifications in its rules, vice president Ken Keller said. The St. Jude Dream Home Giveaway, which benefits St. Jude Children's Research Hospital, lists its terms and conditions on tickets and in brochures, spokeswoman Mariana Vargas said.
St. Jude has been raffling off homes across the nation for 30 years, Vargas said. Last year, the Bakersfield raffle raised about $1.4 million, she said. The charity aims to get 100 percent of each home's cost donated by builders and subcontractors.
Bakersfield Memorial Hospital has done two home raffles as part of a capital campaign to help fund a tower which will house 114 new patient rooms, Keller said. The houses in the program were discounted, but not free to the hospital, he said. Keller wouldn't comment on how much was paid for each house, but said the raffles were profitable.
In California, home raffle winners are subject to federal and state income tax, said Chris Thornburgh, a certified public accountant and partner at Brown Armstrong in Bakersfield.
"Most people are going to quickly find themselves in a very high income tax bracket," Thornburgh said. Federal tax rates top out at 35 percent, and the state tops out at 9.3 percent, she said.
Any winner would be wise to see a tax adviser as soon as possible, she said. Possible strategies include pre-paying part, or all, of state income taxes in an effort to reduce federal taxes.
"Most people have to take a mortgage just to pay the income tax," Thornburgh said.
Williams was lucky to get loans from friends for the taxes, she said.
She briefly considered moving into the house she won.
"I love the house," she said. "The kitchen was gorgeous. The master bedroom -- you couldn't ask for anything bigger."
But moving would have meant homeowners association dues, new blinds and other overhead costs.
In the end, she kept the television that came with the house and decided to stay put in her modest south Bakersfield home, a stone's throw from the car dealerships lining Gasoline Alley Drive.
Deciding to sell the house proved tricky, because some buyers knew she had won a raffle and assumed she hadn't paid a dime for the house. She went into escrow twice with one unsuccessful would-be buyer.
"People just want you to give it away," Williams said.
Williams finally sold the house last month for $225,000, records show. She made a little profit and wouldn't discourage anyone from buying a ticket.
To see more of The Bakersfield Californian, or to subscribe to the newspaper, go to http://www.bakersfield.com.
Copyright (c) 2008, The Bakersfield Californian
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
[ Back To TMCnet.com's Homepage ]
|
Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 16-18, 2008. Los Angeles, California.
