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snopes
Return! Return! Return!


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Comment: This comment was posted on a forum board that I subscribe to. It
is a support forum for Jessica Lynch.

"Thought everyone would be interested to know that the Piestewa's went
into a local Sear's store trying to return all the appliances they
received for cash. Also, they are trying to sell the furniture they
received as gifts.This is all confirmed through the local television
station reporter who is working on the story."
The person who wrote this is referring to the articles of furniture that
were given to the Piestewa family from the ABC program, Extreme Makeover,
Home Edition, which aired on ABC TV on 22 May 05. The home is in Flagstaff
Arizona.
If this story is false, I'd like to post a correction.

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John Stephens
The Red and the Green Stamps


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What I'm hearing is that the IRS is demanding that the Piestewa family pay income tax on all the gifts they've recieved, including the house that was built for them. They're selling off appliances and such for cash to pay the Feds. I'll see if I can come up with some hard info.

Update: I called the local newspaper, and spoke to one of the reporters, who "declined to comment". SOMETHING'S going on...

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Soccer
I Saw Three Shipments


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I can find nothing except for stories on Piestewa's death and on the makeover their house received.
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DesertRat
It Came Upon a Midnight Clearance


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At the end of the day, who NFBSKing cares? What, is there a rivalry now between "Lynch supporters" and "Lori supporters"? That is the most immature and idiotic thing I've heard all week...

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High on the wind, the Highland drums begin to roll, and something from the past just comes and stares into my soul... --Mark Knopfler

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chillas
Coventry Mall Carol


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quote:
Originally posted by DesertRat:
At the end of the day, who NFBSKing cares? What, is there a rivalry now between "Lynch supporters" and "Lori supporters"? That is the most immature and idiotic thing I've heard all week...

Who NFBSKing cares? Well, if the IRS is demanding their cut on gifts given to a family that was financially burdened, then I for one NFBSKing care.

--------------------
Come on, come on - spin a little tighter
Come on, come on - and the world's a little brighter


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noreen
We Three Blings


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quote:
Originally posted by chillas:
quote:
Originally posted by DesertRat:
At the end of the day, who NFBSKing cares? What, is there a rivalry now between "Lynch supporters" and "Lori supporters"? That is the most immature and idiotic thing I've heard all week...

Who NFBSKing cares? Well, if the IRS is demanding their cut on gifts given to a family that was financially burdened, then I for one NFBSKing care.
Recipients don't pay gift taxes.

--------------------
"No matter what kind of a twisted sexual mutant you happen to be, you've got millions of pals out there. Type in 'Find people that have sex with goats that are on fire' and the computer will say, 'Specify type of goat.'"

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Nobody Important
Jingle Bell Hock


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quote:
Originally posted by noreen:
Recipients don't pay gift taxes. [/QB]

Right - but I guess the IRS is treating it as "income"... just like if you win cash on Jeopardy! or a new car on Wheel of Fortune - you pay income tax on that.
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Four Kitties
Layaway in a Manger


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quote:
Originally posted by noreen:
Recipients don't pay gift taxes.

They do if the gift is valued at $11000 or above, which the house undoubtedly was. In addition, they now have property taxes to pay.

Four Kitties

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If swimming is so good for your figure, how do you explain whales?

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Methuselah
Happy Holly Days


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quote:
Originally posted by Four Kitties:
quote:
Originally posted by noreen:
Recipients don't pay gift taxes.

They do if the gift is valued at $11000 or above, which the house undoubtedly was. In addition, they now have property taxes to pay.

Four Kitties

Actually, ABC and Extreme Makeover: Home Edition go to great lengths to work with the families after the home is rebuilt to insure that they do not face severe financial hardship after the show.

As I understand the setup, ABC and EM:HE actually lease the house from the family for the week of reconstruction for an amount of $50,000 (actually, they lease for a period of ten days, as they do spend time before construction surveying the property, and doing some cleanup after). The producers then pay the lease bill in hard goods instead of cash (50 grand worth of TVs, washers, stove, etc). Because of a tax code that allows tax-free home rentals for a period of under 15 days, no federal tax is owed on the merchandise (Code section 280A(g)).

As far as the value of the house, the producers use a tax "loophole" known as the leaseholder improvement clause, which allows a leasee to improve a dwelling as one would improve their own home. Therefore, it's not a gift to the family, but a leaseholder improvement.

Now, this all relates to Federal tax codes. There are, of course, varying state tax implications, and increased property taxes (as the value of the home is clearly higher after the renovation). Producers of the show do insist that they work with families to lessen any additional financial burdens, which I have little reason to doubt.

As a final note, if it came out that the IRS was cracking down on the recipients of these home makeovers, I feel certain that there would be a loud cry across the country for immediate change of tax codes. An act so visibly heartless would leave the government looking like the Ceaucescu's.

-milhouse
Edited to clarify the tax code

--------------------
"The true soldier fights not because he hates what is in front of him, but because he loves what is behind him." - G.K. Chesterton

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damsa
The Red and the Green Stamps


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Why do these people deserve free houses anyways. They got something of value they should pay taxes on it. Just because you get cancer or something then somehow you stop paying taxes. I know I sound heartless. But people out there are dying because they can't get decent healthcare and I am worried because a family can't afford their new plasma screen TV. Ridiculous. They should've declined when ABC asked them to do it.
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I saw Mommy kismet Santa Claus
Happy Xmas (Warranty Is Over)


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quote:
Originally posted by damsa:
Why do these people deserve free houses anyways. They got something of value they should pay taxes on it. Just because you get cancer or something then somehow you stop paying taxes. I know I sound heartless. But people out there are dying because they can't get decent healthcare and I am worried because a family can't afford their new plasma screen TV. Ridiculous. They should've declined when ABC asked them to do it.

??????
That's cold, and it doesn't make any sense.

There's a guy here at work who had one of the ABC Extreme Makeover Homes done for him and his family. These people have all gone through terrible crap in their lives, and are living in unsafe accomodations-that's why ABC picks them. They say yes because they want a decent home for their kids, they are often unaware of the tax implications because they've never made enough to owe taxes before. That doesn't make them greedy or bad people.

ABC might want to think about doing some financial instruction as a pre-requisite to get the house. Habitat for Humanity does that, to keep people from ending up in trouble similar to the OP. It's very decent of the station to try to minimize the taxes to the family, but education is also very important.

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Mama Duck
It Came Upon a Midnight Clearance


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quote:
Originally posted by damsa:
But people out there are dying because they can't get decent healthcare and I am worried because a family can't afford their new plasma screen TV. Ridiculous. They should've declined when ABC asked them to do it.

Then don't act like they're being ungrateful when they have to sell the plasma TV for cash to pay the taxes.

--------------------
There is no interpersonal problem so big that it can't be solved with a suitably large amount of high explosives. ~ Bufungla

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Rhiandmoi
Ding Dong! Merrily on High Definition TV


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They might also be selling the stuff for cash because they don't like it or just want money. It might have nothing to do with taxes.

--------------------
I think that hyperbole is the single greatest factor contributing to the decline of society. - My friend Pat.

What is .02 worth?

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noreen
We Three Blings


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quote:
Originally posted by Four Kitties:
quote:
Originally posted by noreen:
Recipients don't pay gift taxes.

They do if the gift is valued at $11000 or above, which the house undoubtedly was. In addition, they now have property taxes to pay.

Four Kitties

Recipients don't pay gift taxes.
=============================
(There is no Federal Inheritance Tax.

Reaching a higher tax bracket only affects the amount above the bracket line.

Senators pay Social Security.

The 16th Amendment wa passed.)

--------------------
"No matter what kind of a twisted sexual mutant you happen to be, you've got millions of pals out there. Type in 'Find people that have sex with goats that are on fire' and the computer will say, 'Specify type of goat.'"

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Oualawouzou
Angels Wii Have Heard on High


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Waddyaknow. I always wondered how families who struggled to make it to the end of the month managed to pay all the bills that were sure to pour in after their house's make-over. That's good info, Milhouse, thanks.

--------------------
Le champignon arrive.

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Tootsie Plunkette
Buy a Torch, Jeanette, Isabella


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According to this follow-up to a local makeover:

quote:
Though Centex Homes burned the mortgage, property taxes now add up to what that mortgage cost. Utilities cost more.

And after the builder's coverage plan runs out, there's more for home insurance and upkeep.



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--Tootsie

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AnglsWeHvHrdOnHiRdr
Happy Xmas (Warranty Is Over)


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quote:
Originally posted by noreen:
quote:
Originally posted by Four Kitties:
quote:
Originally posted by noreen:
Recipients don't pay gift taxes.

They do if the gift is valued at $11000 or above, which the house undoubtedly was. In addition, they now have property taxes to pay.

Four Kitties

Recipients don't pay gift taxes.

noreen is correct: gift taxes are paid by the giver. From the IRS:
quote:
If you give someone money or property during your life, you may be subject to federal gift tax.


--------------------
"When a stupid man is doing something he is ashamed of, he always declares that it is his duty."--George Bernard Shaw

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DesertRat
It Came Upon a Midnight Clearance


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Sorry for re-joining this discussion so very very late...

My point was not to belittle in any way the Piestewa family or their situation; rather, it was intended to fiercely belittle the "Lori Groupies" and "Jessica Groupies" who seem to delight in turning these very human stories of tragedy into some sort of teen-girl fan club. Why the hell would people on a Jessica Lynch support forum need to badmouth Lori? Is it a case of "my female soldier icon is better than yours?"

How immature and juvenile.

--------------------
High on the wind, the Highland drums begin to roll, and something from the past just comes and stares into my soul... --Mark Knopfler

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First of Two
The Bills of St. Mary's


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quote:
Originally posted by damsa:
Why do these people deserve free houses anyways. They got something of value they should pay taxes on it. Just because you get cancer or something then somehow you stop paying taxes. I know I sound heartless. But people out there are dying because they can't get decent healthcare and I am worried because a family can't afford their new plasma screen TV. Ridiculous. They should've declined when ABC asked them to do it.

Thank you for making me look good.

--------------------
"Liberalism is a philosophy of consolation for western civilization as it commits suicide." - Jerry Pournelle

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Sara at home
Ding Dong! Merrily on High Definition TV


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quote:
Originally posted by damsa:
Why do these people deserve free houses anyways. They got something of value they should pay taxes on it. Just because you get cancer or something then somehow you stop paying taxes. I know I sound heartless. But people out there are dying because they can't get decent healthcare and I am worried because a family can't afford their new plasma screen TV. Ridiculous. They should've declined when ABC asked them to do it.

Yeah, it sounds heartless. But don't feel bad because it is all about business.

The problem is that you somehow think the people are getting things because they "deserve" it. Not true. They are getting it because there is a TV show which is trying to get ratings which generate income for the network. Does anyone who gets income or benefits for appearing on a TV show "deserve" it? Or are they just lucky?

I found Milhouse's post interesting and hope he is correct, that the network does it's best to not leave the families with tax problems.

But if there were cash flow problems and the family continues to have cash flow problems after the makeover is complete, there is no reason for them not to sell off luxury items. Just as the network made a business decision to run this show, the families are entitled to make business decision on what to do with the gifts. Selling a plasma TV could get them enough cash to buy a regular TV and buy groceries for ...........how long???? Or pay off some old bills.

--------------------
Assume that all my posts will be edited at least once. Dyslexic -- can't spell, can't type, can't proofread.

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John Stephens
The Red and the Green Stamps


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My contacts in the American Legion have reported back. The Piestewa family is in no financial difficulty over the various donations, as the Hopi Nation is taking care of the matter. They did sell off a few of the items they were given to settle some of Lori's outstanding debts (she was a single mother of two, remember).

Other than that, they're doing as well as can be expected.

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