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Extreme tax on your makeover?
Posted: Fri Mar 25, 2005 2:09 pm
by valerie
Our local paper had an article the other day about a family in our area
who had their house madeover on the show "Extreme Makeover: Home
Edition" and how they could be facing huge bills as a result.
Apparently, the tax officials haven't yet made a determination on
liability that the families on the show might face.
This family already had their property tax double to about $6500 and
are worried that if they do have to pay income tax (to the tune of
about $664,000!) they might even lose their home. This on top of
their PG+E bill jumping from $120 to $550!
The show's producers say that the families won't face income tax
because of the way the show is structured, the U.S. tax code
has provisions that exclude from taxation income from rentals of 14
days or shorter and tenant improvements under certain circumstances.
(The show leases the homes from the families).
Other "experts" say the show is using a loophole and that it is not a
legitimate rental, that the makeovers are taxable as a "prize".
Whether the IRS will risk public outcry by taxing these families is not
known.
:(
Extreme tax on your makeover?
Posted: Fri Mar 25, 2005 2:22 pm
by Tombstone
valerie wrote:
Other "experts" say the show is using a loophole and that it is not a
legitimate rental, that the makeovers are taxable as a "prize".
Whether the IRS will risk public outcry by taxing these families is not
known.
:(
Something tells me that the IRS doesn't give a hoot about public outcry. If they did, they wouldn't exist.
Extreme tax on your makeover?
Posted: Fri Mar 25, 2005 2:31 pm
by valerie
tmbsgrl wrote: Do you live in Arizona?Nope, California, north of the SF Bay...
Extreme tax on your makeover?
Posted: Fri Mar 25, 2005 2:31 pm
by valerie
Tombstone wrote: Something tells me that the IRS doesn't give a hoot about public outcry. If they did, they wouldn't exist.
Said a mouthful there, podner!
;)
Extreme tax on your makeover?
Posted: Fri Mar 25, 2005 2:40 pm
by abbey
I hope it all works out for the family concerned, i sometimes watch this programme and i always cry at the end when the owners see whats been done for them! :-1
Extreme tax on your makeover?
Posted: Sat Mar 26, 2005 5:07 am
by cars
Posted by valerie:
Apparently, the tax officials haven't yet made a determination on
liability that the families on the show might face.
This family already had their property tax double to about $6500 and
are worried that if they do have to pay income tax (to the tune of
about $664,000!) they might even lose their home. This on top of
their PG+E bill jumping from $120 to $550
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I'm a little confused, income tax of $664,000 how much renovation was done to that house to warrent that kind of tax? And if the house has now appreciated so much to be taxed so high, if need be they could "Sell it" pay taxes, and buy something they can afford? :-2
Cars :driving:
Extreme tax on your makeover?
Posted: Sat Mar 26, 2005 10:10 pm
by valerie
Cars, the house had approx. 1.5 million in improvements, the article I
read didn't break it down into how much of that might have been paying
people's overtime or whatever. If I'm not mistaken, the show has rules
about not selling your house within a certain amount of time, plus the
other sticky wicket is a lot of the improvements were done to benefit
the young girl with a rare disease who lives there, she's allergic to the sun.
But I think the figure I read was an added 833 square feet to the house.
A lot in this county.
Article said the people couldn't afford a gardener to keep the landscaping
up, so now it's being lost.
The house was almost 100 years old to start with, I believe.
A real mess any way you look at it!!
Extreme tax on your makeover?
Posted: Sat Mar 26, 2005 11:54 pm
by cars
Posted by Valarie:
Cars, the house had approx. 1.5 million in improvements, the article I
read didn't break it down into how much of that might have been paying
people's overtime or whatever. If I'm not mistaken, the show has rules
about not selling your house within a certain amount of time, plus the
other sticky wicket is a lot of the improvements were done to benefit
the young girl with a rare disease who lives there, she's allergic to the sun.
But I think the figure I read was an added 833 square feet to the house.
A lot in this county.
Article said the people couldn't afford a gardener to keep the landscaping
up, so now it's being lost.
The house was almost 100 years old to start with, I believe.
A real mess any way you look at it!!
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Wow, I had no idea the improvements would ever even be close to 1.5 mil!!!
Now that's a real "Extreme makeover"!!! :rolleyes:
Cars :driving:
