Raffle off your house? - Posted by CedricR.


#1

Posted by Dave T on November 10, 2008 at 14:49:45:

Probably be taxed as a dealer disposition – ordinary income tax plus self employment income taxes


#2

Raffle off your house? - Posted by CedricR.

Posted by CedricR. on November 10, 2008 at 07:36:43:

Anybody else see the news where a couple couldn’t sell their house after 18 months of trying? They then raffled it off using 2500 $100.00 tickets. Grossed 250k on the sale; no idea of the appraised value. I didn’t catch the location but it was a 4 br unit.

How would the tax situation shake out on this type of sale?
Would a title company hold the cash until the sale was finalized?

It sure sounds like an interesting marketing idea.

CedricR.


#3

Re: Raffle off your house? - Posted by David Barnett

Posted by David Barnett on November 12, 2008 at 16:45:09:

Here’s one going on right now in Edmonton.
They’re doing it as a contest, probably to avoid problems with running an illegal loto.

http://www.the11dollarhouse.com


#4

Re: Raffle off your house? - Posted by michaela-CA

Posted by michaela-CA on November 10, 2008 at 17:55:54:

I looked into that a few years ago and I may remember this incorrectly, but I seem to recall the ‘raffle’ having to be a competition and not a straight sale of raffle tickets.

Several years ago there was a bed-and-breakfast that did it and people had to pay $ 100 to enter a contest and the contest was about writing a letter ‘why you would want to own a B & B’. And the present owners would judge it and the winner would win the B & B.

Michaela


#5

Re: Raffle off your house? - Posted by brandoncbsre

Posted by brandoncbsre on November 10, 2008 at 16:23:05:

There was a couple that tried this a few years ago for a golf course. If I recall correctly it was a thousand bucks a ticket and then you had to attempt a golf shot and the contestant closest to the pin won the course.

Bottom line…they didnt sell enough tickets and the course was sold through bankruptcy I believe.


#6

Probably Not A Good Idea… - Posted by Bank Negotiator

Posted by Bank Negotiator on November 10, 2008 at 14:39:50:

This raffle is being held here in Michigan. I saw it on the news yesterday and nearly came out of my skin I thought it was such a good idea.

Some quick research on google on “raffle my house” turns up that this might not be a good idea.

Raffles come under gambling laws and the only way to do it without getting in trouble is to set up through a Non-Profit. The entire thing has to be handled by an attorney and looks expensive/complicated/unlikely to succeed.

It looks like the kind of thing that you might do once and never want to do again…if you didn’t go to jail and all that.


#7

Re: Raffle off your house? - Posted by Dave T

Posted by Dave T on November 10, 2008 at 13:22:04:

If this was a primary residence, and the owners satisfy the 2 year ownership and occupancy rules, then the sale is tax free to the homeowners.


#8

Re: Raffle off your house? - Posted by Ken

Posted by Ken on November 10, 2008 at 12:28:59:

It is on AOL they have not done the raffle yet they will do it when they sell 2500 tickets.AOL gave a web site of rafflejoeshouse.com


#9

Re: Raffle off your house? - Posted by River City

Posted by River City on November 10, 2008 at 11:05:25:

Try this website:

http://www.foxcarolina.com/money/17943237/detail.html


#10

I’d be interested in whether they had a mtg - Posted by Rich-CA

Posted by Rich-CA on November 10, 2008 at 09:49:45:

and if any of the raffle proceeds were used to pay off the loan.


#11

Re: Raffle off your house? - Posted by CedricR.

Posted by CedricR. on November 10, 2008 at 14:33:13:

Well then, if you built a NEW house and raffeled it off without living in it… that would be taxed as regular income?
CedricR.