How do people “afford” the Extreme Makeover Home Edition?
Swinging the utility bills is probably the easiest for those folks to deal with. A 1,200 sq ft home with little or no insulation costs a lot more to heat and cool than a 4,000 sq ft modern state-of-the-art home. My boss recently built a 4,500 sq ft home and his utility bills are about 1/4 of what mine are on a 2,900 sq ft home built 27 years ago. Income and property taxes are what kills those folks. The homes are NOT a gift under our tax laws but are considered ordinary income. A gift would not be taxed; the DONOR pays the taxes on gifts. However to be a gift the donor must get nothing in return and the producers get PLENTY in return for giving away the homes — the publicity for the show and the advertising revenue that it attracts. To help defray the taxes involved the show does give them enough cash to cover the income taxes and the property taxes for the first couple of years. Even so, that money is taxable as well which further increases the tax bill. If the folks are really lucky
