Newsweek: “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.”
via TaxProf Blog.
bettie dearman on October 11th, 2005 at 2:29 pm
i would like to know after the house is re build who pays for the morage.
Dane on October 11th, 2005 at 9:52 pm
I think that most of the time, the show takes care of the mortgage.
Ron Craft on March 19th, 2006 at 8:24 am
The mortgage is not always retired. That does happen occassionally, but is not a feature of the show.
Ron Craft on March 19th, 2006 at 8:30 am
A viable solution would be to sell the house and claim the available capital gains break that applies to the sale of your principle residence. Less than perfect, but it would keep these deserving families from suffering. Isn’t it wonderful that our government is set up in such a way that deserving families are not allowed to get the help they need without suffing this pain. God Bless America.
Donna on March 19th, 2006 at 6:23 pm
I think it is solely a business that is paid for through its TV production and advertises the craftsmanship of the construction crew. The main theme is advertising what they do on national TV in spite of how it looks and not how people will maintain it or what their existence is like thereafter. It is extreme, sometimes too extreme for it would seem the money would go further and help more people if it was not so.