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Old 12-10-2015, 12:20 AM
 
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How much Income tax will be owed on real estate assessed at $650,000 won in an essay contest?
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Old 12-10-2015, 03:29 AM
 
Location: Berkeley Neighborhood, Denver, CO USA
17,665 posts, read 29,540,339 times
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$234,567.89
Approximately.
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Old 12-10-2015, 09:20 AM
 
Location: Boise, ID
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Quote:
Originally Posted by davebarnes View Post
$234,567.89
Approximately.
Are you sure it isn't $314,159.26 ? Because I like Pie better than sequential numbers. I just can't see them tasting good.


To the OP, sorry, no idea. Probably depends on your tax bracket and your other writeoffs. Talk to an accountant familiar with your finances. If you don't have one, hire one. And if you've won this, then congratulations.
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Old 12-10-2015, 12:44 PM
 
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Quote:
Originally Posted by Newstead View Post
How much Income tax will be owed on real estate assessed at $650,000 won in an essay contest?
If single, with no other income or deductions, the federal income tax would be $213,769.

http://www.irs.com/articles/2015-fed...ard-deductions
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Old 12-10-2015, 01:16 PM
 
Location: Boise, ID
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Originally Posted by jackmichigan View Post
If single, with no other income or deductions, the federal income tax would be $213,769.

2015 Federal Tax Rates, Personal Exemptions, and Standard Deductions | US Tax Center
But if you had other income that already put you into that highest tax bracket, then the taxes would be $257,400. Fairly large difference.
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Old 12-10-2015, 04:49 PM
 
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Quote:
Originally Posted by Lacerta View Post
But if you had other income that already put you into that highest tax bracket, then the taxes would be $257,400. Fairly large difference.
In order to pay $257,400 in taxes on that amount, you would first need to have other regular income of $413,200 if single, $464,850 if married filing jointly.

Once you enter a higher tax bracket, all of your income is not taxed at that rate--only that portion of your income which exceeds the amount taxed at lower tax brackets.

But...very few people actually pay these high tax rates. There are loads of tax preference programs and tax deductions for those in the know.
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Old 12-10-2015, 08:48 PM
 
4,676 posts, read 9,930,023 times
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You know what happens to people who win these types of contests?

They wind up selling.

In my neck of the woods your yearly property taxes would be over $12,500 a year.

I suppose you could always mortgage the house for the income taxes due..... if you qualify.
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Old 12-10-2015, 09:58 PM
 
Location: Boise, ID
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Yeah, if I won a house or an expensive car, I'd be selling it immediately, paying the taxes and being grateful for winning the leftover amount. $12,500 is more than I pay on my Mortgage (PITI) every year, let alone taxes by themselves. I could never afford to keep a house like this long term, even 100% mortgage free.


And all I was saying in my prior post is that most people don't have $0 in income, so odds are that the taxes would be higher, and depending on income, could be a lot higher. I wanted to make sure the OP understood that.
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Old 12-10-2015, 11:25 PM
 
Location: Kansas City North
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It's not only the income tax on the prize, and the property taxes, it's the insurance and higher utilities and having to spend beaucoup $$$ to furnish all that extra space.
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Old 12-12-2015, 07:10 AM
 
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More importantly, what kind of an "essay contest" nets a $650,000 prize? I am curious. It is not sponsored by Prince Abdullah Monger of Nigeria by any chance?

Mick
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