DO you fantasize about winning your dream home or hitting the jackpot on a TV game show? Well, you better read the fine print first – because winning could cost you big bucks!
On ABC’s “Shark Tank,” for example, wannabe entrepreneurs pitch their ideas to Dallas Mavericks owner Mark Cuban and other business experts.
BUT if you’re chosen to swim with the sharks, the show’s production company typically demands either a 2 percent royalty on your profits or a 5 percent equity stake in your company!
Most entrepreneurs would be better off considering other options, such as borrowing, before signing a deal that’s likely to last forever, said one expert.
And if you snag the “HGTV Dream Home,” you may not be able to afford living in it!
Don Cruz wanted to keep the Dream Home in Tyler, Texas, that he won in 2005, but paying the upkeep proved too much.
The 6,000-square-foot home cost him about $2,900 a month to maintain, plus $32,000 a year in property taxes and insurance. He sold the house in 2008.
SPINNING The “Wheel of Fortune” is no guarantee of living on Easy Street either – because whether you win cash or prizes, you’re on the hook for taxes.
A “Price is Right” contestant who won a new truck, washer and dryer, Apple computer, poker table and trip to Washington, D.C., fielded questions from people wanting to know if there was any downside to winning.
There sure was!
“I won $57,000 worth of items,” he said, “and had to pay about $20,000 in taxes.”