Disabled Extreme Makeover winners may lose home

[AMT]

If I remember correctly, give-away and gameshow prizes come with an enormous tax burden. This could be internet gossip, but I recall hearing of warehouses in SoCal filled with game show prizes that couldn't be claimed because people couldn't afford the taxes on them.

I hope there can be some sort of an effort to help these people. Nobody should be punished for trying to save their son.

Game winning are treated like ordinary income. So if you win say $100,000 and and you live in California you can expect a tax burden of $45,000 which would cover both federal and state taxes.

If you win a physical prize like a car or washer/dryer then the value of those items is treated like ordinary income. For some folks this means they'd have to sell it just to pay the taxes.

I feel bad for this family because it really doesn't seem like they did anything irresponsible. I am curious why they refinanced, but in the end it comes down to medical bills are crushing them, which is a nightmare too many Americans have to face.

Gets even better. People who catch famous baseballs usually have to sell them instantly because their assessed value is so high that it puts a huge tax burden on the individual. Even giving away the item doesn't count since you still have to pay taxes on gifts. On rare occasion congress passes a temporary exemption for one or two baseballs.

How the fuck is a baseball caught during a game a gift? And how the fuck can they assess the value of it? It doesn't have any intrinsic value. They could set the level however the hell they want!

[Alyeska]

How the fuck is a baseball caught during a game a gift? And how the fuck can they assess the value of it? It doesn't have any intrinsic value. They could set the level however the hell they want!

You find a million dollars on the road and no one claims it. Its yours, and its not a gift. Government still wants to tax it. Windfall tax I guess. Its happened plenty of times in Baseball where people catch famous hits and the ball has an absurd market value by collectors. Just owning it causes the IRS to salivate as they want the money even though you don't have shit unless you sell it. Its just like people winning prizes but unable to pay the tax value associated with the prize. Either sell the prize (and hence forfeit actually winning the prize), or forfeit the prize all together. The system is absurd.

If I found a 1967 Shelby Mustang GT 500 in perfect condition tomorrow with no known owners and no one claims it, I could never keep it. The taxed value would kill me and I would be forced to sell it and only keep the money the government doesn't tax.

[salm]

How the fuck is a baseball caught during a game a gift? And how the fuck can they assess the value of it? It doesn't have any intrinsic value. They could set the level however the hell they want!

You find a million dollars on the road and no one claims it. Its yours, and its not a gift. Government still wants to tax it. Windfall tax I guess. Its happened plenty of times in Baseball where people catch famous hits and the ball has an absurd market value by collectors. Just owning it causes the IRS to salivate as they want the money even though you don't have shit unless you sell it. Its just like people winning prizes but unable to pay the tax value associated with the prize. Either sell the prize (and hence forfeit actually winning the prize), or forfeit the prize all together. The system is absurd.

If I found a 1967 Shelby Mustang GT 500 in perfect condition tomorrow with no known owners and no one claims it, I could never keep it. The taxed value would kill me and I would be forced to sell it and only keep the money the government doesn't tax.

So does the IRS ever find out who catches the balls?

[Rogue 9]

And if you, as the owner of the baseball, decide to set it's price low to avoid taxes, guess what? Someone's going to come and want to buy it, and the jig is up if you don't sell it at your declared price.

[Alyeska]

So does the IRS ever find out who catches the balls?

Bet your ass they do. Your picture is on national television when these incidents happen.

[Alyeska]

And if you, as the owner of the baseball, decide to set it's price low to avoid taxes, guess what? Someone's going to come and want to buy it, and the jig is up if you don't sell it at your declared price.

What? If you could set a low price, what forces you to sell it in the first place? Thats like saying because I value my computer at $1,238 that I must therefor sell it. You are not allowed to value your item. The market sets the price. So you have three choices.

Keep the ball if you can
Sell the ball at market price and the government takes a chunk
Sell the ball at an arbitrarily lower price and the government still takes a chunk. The new owner then has the possibility of having to make up the difference in value.

[AMT]

Gods. This system is effed up. I can see the govt. taking a chunk out after you actually sell the thing, but to assess a tax based on a value for something like that which you haven't even sold?

One more reason I think television programs and now sports programs should pay those taxes. It's not like they can't afford it.

[Samuel]

Gods. This system is effed up. I can see the govt. taking a chunk out after you actually sell the thing, but to assess a tax based on a value for something like that which you haven't even sold?

One more reason I think television programs and now sports programs should pay those taxes. It's not like they can't afford it.

Except the ball is worth that much- people will give you that money in order to have it.

[Rogue 9]

And if you, as the owner of the baseball, decide to set it's price low to avoid taxes, guess what? Someone's going to come and want to buy it, and the jig is up if you don't sell it at your declared price.

What? If you could set a low price, what forces you to sell it in the first place? Thats like saying because I value my computer at $1,238 that I must therefor sell it. You are not allowed to value your item. The market sets the price. So you have three choices.

Keep the ball if you can
Sell the ball at market price and the government takes a chunk
Sell the ball at an arbitrarily lower price and the government still takes a chunk. The new owner then has the possibility of having to make up the difference in value.

I was responding to AMT's statement that "they could set the level however the hell they want." Now, "they" could mean a lot of things, but I presumed that he meant the owner of the baseball and went from there; under the assumption that he meant that one could tell the IRS "No it's not worth a million dollars; I'd sell it for ten!" Then someone comes along and offers ten dollars. If you tell him he'll have to pay more, the IRS knows you lied and proceeds to tax your ass.

[AMT]

Gods. This system is effed up. I can see the govt. taking a chunk out after you actually sell the thing, but to assess a tax based on a value for something like that which you haven't even sold?

One more reason I think television programs and now sports programs should pay those taxes. It's not like they can't afford it.

Except the ball is worth that much- people will give you that money in order to have it.

Which is why I understand paying the taxes, if the person intends to sell it. But if they want to have it and not profit from it, it seems silly to have it be taxed. After all, by selling it, it becomes a trade good. By keeping it... it isn't. I just don't see why the tax law couldn't be changed in those situations to read "if you sell x item, pay the taxes, if you don't, then don't."

[Alyeska]

Gods. This system is effed up. I can see the govt. taking a chunk out after you actually sell the thing, but to assess a tax based on a value for something like that which you haven't even sold?

One more reason I think television programs and now sports programs should pay those taxes. It's not like they can't afford it.

When it comes to selling it, the system makes sense. Where the system is fucked up is when they use it to hurt people who want to keep the object whole. When the assessed value is too high to allow you to keep the item.

[AMT]

Gods. This system is effed up. I can see the govt. taking a chunk out after you actually sell the thing, but to assess a tax based on a value for something like that which you haven't even sold?

One more reason I think television programs and now sports programs should pay those taxes. It's not like they can't afford it.

When it comes to selling it, the system makes sense. Where the system is fucked up is when they use it to hurt people who want to keep the object whole. When the assessed value is too high to allow you to keep the item.

Exactly my point. Apologizes if I was unclear.

[SirNitram]

I believe it was SirNitram who posted an article a while ago, outlining how a lot of the recent foreclosures were due to medical and health reason. Well there's horrible another example right here.

Indeed. I'm trying to remember what therapy runs in the 30,000 dollar range. IBI and other Aversive Therapy methods(No, I don't agree with 'Beat them until they obey' therapy, but I can recall costs) goes for 100k a year. Pure quackitude is rarely this expensive and is often covered. Could be Hyperbaric Chamber Oxygen therapy, which is probably not paid for because the FDA specifically says don't fucking give oxygen to people in a pressurized chamber at your home.

[ArmorPierce]

And if you, as the owner of the baseball, decide to set it's price low to avoid taxes, guess what? Someone's going to come and want to buy it, and the jig is up if you don't sell it at your declared price.

It could get worse than that. The IRS may decide that the you sold it at x amount and the rest of the money that you didn't make off of it was a gift. Even though you sold it for one amount, they will still impute the full worth of it and be taxed accordingly.

[The Spartan]

Update

OAK PARK, Mich. – Several thousand dollars have rolled in for a deaf Michigan couple who feared they were going to lose the home whose renovation was viewed by millions on TV in 2004.

Judy and Larry Vardon say the money should help them avoid foreclosure on the Oakland County home that was refurbished to better accommodate their blind, autistic son. The family was featured on "Extreme Makeover: Home Edition."

The Macomb Daily and The Daily Tribune reported Sunday that the couple didn't request money, but donations started coming after media outlets this month reported on their plight.

The Vardons said they were weighed down by a mortgage payment that almost doubled since the makeover, and by medical insurance that hasn't covered autism treatment for 16-year-old son Lance.

Seems some help has come to them. Though one must wonder just how long it will actually help them because, well, see my bolding above.

Some help their makeover was...