382: HGTV Dream Home or Financial Headache? The Truth About Winning
What if you won the HGTV Dream Home? If you’ve heard of the sweepstakes before, you know what it feels like to watch the walkthroughs, read about the top-tier renovations, and imagine yourself soaking in the bliss of winning a mansion, tucked away in some of America’s most serene areas. But this dream may never come to fruition because the reality of winning the HGTV Dream Home is much different than most people think. To explain, we brought on CPA and tax expert Amanda Han.
Amanda admits that even though she threw her name in for the Dream Home drawing, she has some reservations about winning. While HGTV promises a multi-million dollar mansion in the mountains of Colorado, the reality is far from a turnkey option. With so many winners either choosing to sell the home or take the cash prize, one wonders, “what really happens when you win?” If you decide to keep the home, you better have mountains of cash available to pay for it because this prize is far from free.
But even if you don’t, you aren't entirely out of luck. Amanda highlights a few strategies that one lucky winner can use to keep the home, how to dodge an almost unbelievable tax burden, what to do if you opt for cash, and whether turning the Dream Home into a rental property makes more financial sense. We hope you win, and if you do, please send a housewarming party invitation to BiggerPockets at 3344 Walnut Street, Denver, CO 80205!
In This Episode We Cover
The 2023 HGTV Dream Home and why it’s a perfect Colorado wilderness getaway
The MASSIVE tax implications of winning a sweepstakes and what you can expect to owe
Taking the cash prize option and why this may be a better bet than keeping the home
Tax saving strategies that can help you owe even less to the IRS
How much you need to make to afford the upkeep on this $2M+ mansion
Donating the Dream Home to charity and whether you’ll still owe taxes after
Real estate professional status, depreciation, and turning the Dream Home into a rental for ongoing cash flow
And So Much More!
Links from the Show
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