We took the day to visit the Home Makeover project going on in our region. Our 7 yo daughter likes to watch the show and wanted to be able to yell “move that busâ€. If it wasn’t for her we definitely wouldn’t have made the trip! The link below has pic’s of the progress through the week. They built a 4000+ sqft house, 7000 sqft indoor riding arena and renovated a 10000 sqft barn. The project is for a family that offers therapeutic horseback riding for the disabled. The house & arena look very impressive from about 100 yards away. Couldn’t see the barn, it was behind the arena.
It was about as I expected as far as the “length†of the day. We got there about 10:30 to try to get a spot where she could see anything. Parked in a remote lot and were bussed to the site. There were a lot of trial runs of the limo pulling up, camera shots of the crowd cheering, bus moving, more cheering crowd, etc. through the day. Got pretty boring for the 7 yo but we had packed a picnic lunch and we stretched that out to keep her occupied for a while. It was listed in the paper the family would get there between 12 & 2, we figured it would be 2 at the earliest and as expected they got there about 2:30. Made the 7 yo’s day, she got to yell move that bus. After the family went inside the design team came out and spent a lot of time signing autographs & shaking hands. The line for the buses (shuttles to a parking area) was an impressive 350 yards long (about 3 wide) and we finally got out of there about 4:30. The daughter was very excited to have 4 autographs, although she had hoped to get Ty’s, he was inside with the family.
A couple impressions…
That is a huge amount of work to do in a week! Sometimes takes me a week to just clean up from one of my projects!
The spectators there today left a huge amount of trash strewn around, very disappointing to see that. My wife commented once during the day that if anyone would want to rob every trailer park in our county, this would be the day since it seemed they were all at this place.
As I wandered through the crowd I was surprised to hear about ½ dozen people trashing the woman getting the house. I figured there would be some envious people who would feel that way, I just didn’t think they would have gone through all the effort to show up and spend 4-5 hours of their day there.
I’m glad I don’t have to pay the taxes on that property!! We figured with the acreage, barn, riding arena & house it is worth probably $2mil. In addition to the yearly RE tax, anyone know what the tax rate is for the “gift†of the house?
Replies
I poured the concrete on one about three years ago
.
Know BOB, Know Peace
I believe they will get a 1099 for the fair market value of the work. I.e., it's considered income.
I would have to believe that they have some sort of arrangement that gives the people ownership (and tax liability) over a period of years, if only to prevent them from selling it outright the next day.
If your view never changes you're following the wrong leader
when this show first started i liked the concept,they would remodel a house for someone and go on.then they got carried away.worst was built a house in the gettho,pool whole nine yards.yea Family was pumped but i would like to see them now,they own a 600k house ina 50k area and there property taxes are probably 15k a year.they couldn't afford to fix the old house where they going to get the tax money from?
they did one here,family has a mobile home that blows up,unbelivably no one was home or hurt. so they come in build this big house,give them new cars etc. who knows what the gift tax was to uncle sam,but i have heard that the property taxes are 8k a year.the family would of been better off with a 1800 sf ranch and the taxes at 1500.00 and been able to enjoy it. now they gotta throw dang near a 1000.00 a month to pay taxes and ins.
yea,i'm just jealous and wish they would do it for me........[i'd sell it as soon as the bus left and be able to afford what i bought] larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
The article mentioned it is a non-profit corporation running the therapeutic riding stable, so i presume at least that part of if is not taxed.
A NON PROFIT organization would not have anything to do with whethr the property is taxed or not.However, if it was a charitable organization it MIGHT not have property taxes.But the requires for a federal designation as a charactiable organization (501C3) might not be the same as the state requirements for abating property taxes.Also, using you words, the corporation covers the Riding Program.They may not own the property.Or might lease the property and own the improvements. Or then many only own the horse and provide feed and care..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Several of the projects recently aired projects have been to legitimate charitable organizations so the tax consequence may be different than it is for a family. Below is an excerpt from Newsweek in 2004 . . ."Tax Trouble for ABC's 'Extreme' Winners?
Section: PeriscopeTelevisionLast fall Trent Woslum, a National Guardsman who was deployed in Iraq, got an e-mail from his wife. She'd been contacted by a new TV show called "Extreme Makeover: Home Edition," which wanted to do a big renovation of their southern California home--free of charge. By mid-December the family had new furniture, appliances and even a backyard baseball diamond. Estimated value: as much as $250,000. The production company gave the Woslums a letter saying its accountant believed the family didn't have to pay taxes on their windfall, but when the family's own accountant read it, he grew wary. "I'm living in fear and trepidation," says accountant Brett Porter. If the IRS looks closely, he worries, the family could owe thousands in taxes. "There's no way I'd be able to pay," says Woslum, whose savings ran dry during his deployment.It's common knowledge that lottery or TV game-show participants must pay taxes on their winnings. On "This Old House," homeowners routinely pay taxes on donated products. But the producers behind ABC's "Extreme," which picks cash-strapped families for a seven-day home renovation, think they've found a way around the taxes. According to documents obtained by NEWSWEEK, the show leases participants' homes, paying $50,000 for 10 days' rental. Instead of cash, the show gives the family flat-screen TVs and appliances. Since the IRS allows tax-free rentals of less than 15 days, the homeowners don't owe taxes on their new goodies. And by renting the home from the family, producers apparently believe the renovations are tax-free under a "leaseholder improvement" loophole.But NEWSWEEK ran that logic by a half-dozen outside tax professionals. While some called it clever--even "elegant" --most scoffed at the show's approach, saying the IRS would be highly unlikely to agree with all aspects of it. "When you look at the big picture, these provisions were not meant for this," says Jim Seidel of RIA. The result: if audited, the "Extreme" families could be hit with huge tax bills. The IRS, ABC and the show's producers and accountant declined to comment.For Woslum, the problems go beyond taxes. He describes leaky bathrooms and cracked stucco. One of the snazziest additions--a carwash shower--has never worked; he claims producers used air compressors to make it appear functional for the show. Rivals aren't surprised. "You can't do a quality job in one week," says Norm Abram of "This Old House," which spends up to 12 months on projects. He worries that the "Extreme" winners are really "victims of the program." As for the taxes, if the Woslums are audited they may sue the producers. Sounds like the makings of a great reality show--for Court TV."The recently aired house in CT was a beautiful house, but in a really bad neighborhood. Although their mortgage was paid off in the deal, I would think even the adjustment to dealing with the utilities would be a major shock. There was an article about a year ago regarding the "Dream House" HGTV gave away (in VA I think). The win was forced to sell when the first tax bill arrived.Jason
http://www.realitytvworld.com/news/abc-extreme-makeover-home-edition-exploits-dubious-means-dodge-taxes-2552.php
The bit about income taxes has come up before. It was in the local papers after a project her.
I don't remember the details, but I believe that they treat it asrental of the property for the purpose of making entertainment. And then they leave the improvements.
So the amount of "income" is limited to the minor rental amount.
However, it has never been tested and many don't think that it will pass muster.
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
It will certainly be interesting to see how these all play out taxwise. It's definately a stretch to beleive the IRS will go along with the use of the rental/leaseholder improvement loophole that the show uses to get around the situation.
I'm guessing the IRS doesn't want to go there right now. Would make a big black eye for them, and no one other than the families (who are fairly well vetted) are profiting from the tax arrangement itself (though of course the show's producers profit from their "labors" in making the TV show).
If your view never changes you're following the wrong leader
that;s possible, although I'm not sure the black eye would fall on the IRS or the show producers who led people to beleive they were in the clear.
The IRS would be viewed as the Grinch. (Not that they aren't usually, but this would raise a real ruckus.)
If your view never changes you're following the wrong leader
Maybe, maybe not. I don't have any love for the IRS but I wouldn't have any problem with them going after taxes in these situations.
I think the whole thing is ridiculous and over the top and in the end will hurt the families involved even if no immediate tax consequences occur. Of course the producers are long gone by then.
i'm curious if they could avoid taxes by pulling up and paying the people a 1.00 for there house. build a 500,000. house on it, do the show.then turn around and sell it to the people for a 100.00. show takes a write off against profits ,homeowner just bought himself a house.waits 2 years and can sell it for 500k tax free homeowner sale. sounds good to me,come vist me in fed. cell #999.just ask bubba for directions larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
That is kind of like what they are doing.
We just did a EHMO home nearby. Our boy is into the show. We went down for a couple of days.
IMO:
could have supported a few families in modest homes for the same experience. Instead of a 5k SF home how about 4 at 1500 SF? Course that would not be good TV. And that is what it's all about.
Our boy wanted to see the turnover day. So we go down. Spend most of the day there. After about 6 hours they move in the moving vans. Big excitement. Hullabaloo. But no Ty. Turns out he was in Idaho.
The show makes a big deal about neighbors building a home for the family. Only thing the neighbors did was run for water and help at check in. The trades built the damn house. Give credit to the trades. The trades and the builder donated all kinds of labor and building supplies.
On the show, lots of face time for the producers and Ty. Not so much for the people that actually built the house. How about a few of the problems that were overcome to build the house in 4 days? Like the concrete plant breakdown in the middle of the foundation pour?
I'm not a fan of the show.
I agree with you that more could be better served by building a few practical homes rather than one over the top house. It seems the publicity and success of the show detracts from its ability to help more than one family. I know for the project here initially all the benefactor wanted was the indoor riding arena (so the therapeutic riding could be done in bad weather) with some kind of apartment.
I suspect the TV producers aren't the only ones at fault - I think that is also the fault of the builders who want to showcase their "product". I don't know for sure how much of the house plan is dictated by the show and how much the builders do themselves. I suspect the builders seize the opportunity for a showcase house on national TV. Can't say that I blame them either since they are donating a pile of money, time and talent. I have been involved in Christmas in April projects for 15 years where at least a dozen county families each year were helped on a smaller scale. My hope is that the publicity this created will spill over into the efforts to get donations and raise volunteers next spring. I never had the folks at our local kitchen cabinet supplier fully donate supplies or fight to make a delivery to our project as it happened for the EMHO project. Maybe next year will be different if I change my name to Ty.