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Once-homeless family wins dream home

Now the Georgia couple must pay a big tax bill to take possession of their prize property.

By Marilyn Lewis May 2, 2013 10:50AM

Image: Home exterior in Gilbert, Az. © Paul Hill, AlamyHope and Don Lance once struggled just to stay off the streets. Now the Macon, Ga., couple are the owners of a brand new five-bedroom, four-bath home. But it remains unclear whether they will ever be able to move in.

 

The Lances, who have lived in motels and, for a time, in a tent, won the home in a St. Jude Dream Home Giveaway, one of a number of similar fund-raising raffles operated by non-profits across the country. St. Jude alone runs dream home raffles in 15 states, selling $100 tickets to benefit its children’s hospital in Memphis, Tenn.

 

But winners need to pay state and federal income taxes on the prize before they can take possession of the home, a fact spelled out in at the St. Jude Dream Home Giveaway FAQ. In the case of the Lances, the bill could come to more than $100,000.

 

The Lances, who have a toddler girl named Faith, seem dazzled by their sudden change in fortune. The master bedroom of their new home is nearly as big as the one-bedroom apartment in downtown Macon where the family now lives, Hope told the Macon Telegraph.

 

But now she and her husband need to contemplate whether to move to the $350,000, 3,250-square-foot home they won in the nearby town of Warner Robins.

 

 

Don, who works installing audio equipment, had a strong intuition that he should buy a ticket for the raffle after hearing about it on on television, according to the Telegraph.

 

"I woke up and something inside (me) said, 'You have to buy one of those tickets.' If I win, fine. If I lose, we help these kids,” Lance told the newspaper.

 

At first, his wife said she “kinda blew him off,” But Don insisted and his wife bought the ticket just three days before the drawing.

 

Don and his wife were returning home from Atlanta Sunday when his boss called to say that his name was being announced on TV as the winner of the St. Jude home giveaway.

 

"I made him pull over," his wife told the paper. "We just sat there for 30 minutes. We couldn't believe it."

 

The tax implications are the only hitch.

 

In a similar case, KTVB.com in Boise, Idaho, wrote in 2009 about a couple who'd won a St. Jude home and faced a bill of nearly $110,000 for state and federal taxes on their winnings.

 

Another winner, living in the Colorado town of Lakewood, faced a similar predicament in 2011, according to Viva Colorado, the Denver Post's English-Spanish news site. Yadira Estrada won a half-million-dollar St. Jude's giveaway home in a more-expensive town about 40 minutes from her job, family and friends. Her property taxes alone on the new home would be about $4,000, the Post estimated.

 

MSN Money was not able to reach the Lances. "We work closely with winners as they make determinations about payment of the required taxes," St. Jude's spokeswoman Jennifer Haslip, said by email.

 

"In the past 20 years, only one winner was unable to pay the taxes or get a mortgage to pay the taxes. In that case, we worked with the winner to resolve it through the sale of the property," Haslip said, adding that she didn't yet know what the Lances will do with their new home.

 

Certified financial planner Al Woodward told the Denver website that a costly dream home may not necessarily be appropriate for all winners.

 

He said if winners of such a costly home can first afford to pay the property taxes and move into the house, the second hurdle is being able to maintain the home.

 

"Are they going to be able to pay the utilities or have time to mow the lawn?" he said. "Or are they going to have to work three jobs just to keep the home?"

 

He suggested that builders construct smaller, more-affordable homes for the raffles.

 

More from MSN Money:

 

 
370Comments
May 2, 2013 1:21PM
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So why give away a high end home to people who have no money at all....should have done TWO homes at half the value for TWO families -  pay the first year taxes as part of prize and give them a kick start
May 2, 2013 1:28PM
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They need to work with the group that raffled the house to sell it and get whatever proceeds are left, after taxes, in cash so that they can buy a more affordable house.  They will still come out ahead.

May 2, 2013 1:28PM
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They should only pay the tax for the cost of the ticket. They bought the ticket not the house.

May 2, 2013 1:28PM
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But again I have to agree with the last sentence in that story. When you are homeless, and struggling. YOU DON'T NEED A MANSION, you need a home. with the money used to buy that 1 big house, they could have built 3 regular homes, and regular people could afford it!!
May 2, 2013 1:43PM
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This is the same stupid deal as the HGTV dream house giveaway yea sounds good till the taxes,maint,electric bill etc come due every month.Why not build 10- $100,000 a piece houses that people could actually afford to win.These charities and other would make 10 times the money if they built 10 affordable house instead of 1 million dollar house.They would raise 10 times the money if they were giving awasy 10 houses instead of 1.Plus think of the number of jobs generasted by building 10 houses spread over say a 100 mile radius as apposed to 1 million dollar house.PLUS they could have multiple drawings throughout the year,thus raising money 365 days a year instead of a couple weeks a year.Come on charities put on the ol thinking cap...
May 2, 2013 1:28PM
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I immediately started thinking about ways to start a fund for these people to help them into the house.  Astonished by the slams people are commenting instead.  Shows the heart, I guess.
May 2, 2013 1:37PM
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I think St. Jude's should build homes that are more affordable for any family to be able to pay the taxes and upkeep on the property.  That way it would not be such an emotional rollercoaster for the winners.
May 2, 2013 12:39PM
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Are we supposed to feel sorry for these people?  Of course they have to pay taxes, just like everyone else.  It is unlikely that they would be able to maintain the home even if they were able to borrow money to pay the taxes.   The house will be neglected and lose value because they won't be able to take proper care of it, and it is likely that they would eventually lose it for one reason or another.  Just sell the house, pay the taxes, and walk away with what is left, which will be considerably more than they had before they won the house and probably enough to enable them to purchase or rent something they can afford on their income.  They need to view this unemotionally and do what is best for the circumstances they find themselves in.  Winning that house will not suddenly make them able to afford the lifestyle it represents.  This is just reality, not some big conspiracy to harm them. 
May 2, 2013 1:32PM
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My thoughts are exactly the same as JayRan. They absolutely should sell it. Wishing them all the luck

in the process of selling it!

May 2, 2013 12:47PM
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This applies to smaller prizes, too. I won a tablet PC six months ago, back when the market for them was really hot. I looked at it thought 'would I buy this at the price I could sell it for?'

The answer was no, so I sold it. I think it's a good rule.
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Just like our government: shoot the gift horse.  With all of the fraud and cheating in the tax system and many avoiding most taxes when making multiple millions it seems something is basically wrong with a system which awards fraud and punishes the struggling when they get a blessing......Yes, why not build a sensible house?  St. Jude is a wonderful hospital, but they should make it very clear about the tax burden if one should win.
May 2, 2013 1:35PM
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I'm sick of political BS.  Of course they would be expected to pay property taxes on the house.  I was so happy to see people who needed a break get one and then I read this.  I hope it all works out for them and that they can feel good about the life that they're providing for their little girl.

May 2, 2013 1:34PM
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Yes but with a program such as that one................... buy a ticket for $100.00 get a chance to win a home............. that is a great opportunity. Just make it doable people!!

 

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Ah, raffles...such fun until the small print rears up and bites one in the hiney. Good luck, people!
May 2, 2013 1:43PM
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Refinance the house.. only need the taxes, not the full value of the house.   30 year mortgage for 100k is $500 a month, maybe less depending on their credit. I am sure their rent was that much if not more.  Then they have to deal with upkeep and utilities, etc.  This isnt a tragedy... jessh

May 2, 2013 1:33PM
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Not very smart auctioning off a home that regular people can't keep up in maintenance, and or real estate taxes per year, utilities.
May 2, 2013 1:36PM
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You guys just don't get it. The put this story up in the news, then people feel sorry for these folks and donations start pouring in and viola! Taxes will be paid for them by the very people that read this news. If it was me, I would give out a room or two for rent or something and pay my taxes in installment that way.
May 2, 2013 1:31PM
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Lived in motels and a tent and probably getting some kind of government assistance but can afford to spend 100.00 on a raffle ticket. What a great country. God bless America!!
May 2, 2013 1:29PM
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this is the very thing the caused the collapsed.  people buying a home they couldn't afford.
in this case, they didn't buy it but again, a house they can't afford.


May 2, 2013 1:23PM
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If you cannot afford it, then you ought not do it.
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