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Reality TV winners get tax reality check
Having a contractor create your dream home for a television show is great. Then the tax bill comes.
April 19, 2005: 2:19 PM EDT

NEW YORK (CNN/Money) - Some reality television winners apparently got a brutal reality check this tax season.

Daily Variety reported Friday that families featured on the Fox show "Renovate My Family" not only are getting their dream homes, but also nightmare tax bills.

One Illinois husband and wife, according to the entertainment industry publication, discovered it owes taxes on $529,000 after Fox-hired contractors tore down their old house and built a new one with special accommodations for their paralyzed son (See correction). The renovation aired on Fox this past summer.

Unexpected tax bills aren't new for reality TV show contestants who receive cash, merchandise or services. "Survivor" winner Richard Hatch, for instance, is being prosecuted for failing to pay taxes on his $1 million in winnings.

And in another highly-publicized case, Oprah Winfrey took heat when she gave away free Pontiac G6 cars to 276 members of her daily show audience but didn't cover their tax bills.

The report in Daily Variety, however, said the belated tax bills are becoming serious problems for winners of home renovation and other wish-fulfillment shows now in vogue.

"You can ruin someone's life by giving them everything they want," one Hollywood producer told the trade paper. "If you take a log cabin and replace it with a mansion, there are tax consequences to that."

The tax pain isn't limited to the initial renovation costs. Property taxes, insurance rates and utility bills all could rise too.

The producers of "Extreme Makeover" try to lower contestants' tax bills by leasing their property during the two-week renovation and filming. Those renovations are then usually tax-exempt.

Meanwhile, the producers of "Renovate My Family" told Daily Variety that they cover the tax bill for families on their show. They recently offered the Illinois family $215,000 to cover their tax liabilities.

The family turned them down and now want the Fox show producers to buy the house, the report said.

Late on your taxes? You're not alone. Click here.

Think politicians have wacky ideas on tax reform, try the average citizen. Click here.

Correction: An earlier version incorrectly included "Extreme Makeover" among the shows where the winners are getting nightmare tax bills. Producers of the program say they have not received complaints regarding taxes. The story also incorrectly reported that an Illinois couple featured on a Fox home makeover show owed $529,000 in taxes. They owed taxes on $529,000. CNN/Money regrets the errors.  Top of page


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