Kathi Nakao was retired with her husband when she won her “Dream Home” property in 2004. It should’ve been the beginning of the picture-perfect final chapters in their lives, a time when they could enjoy the lavish furnishings and amenities of the home while exploring new destinations. When it comes to retirement plans, winning HGTV’s “Dream Home” giveaway was her chance to live out her days in a fantasy.
Sadly for Nakao, she didn’t get those years of happily ever after. Instead, she found herself in significant debt over the property despite almost 30 years working in accounting for the California government. While you win the place without cost, the U.S. levies hefty taxes on gifts. And the 3,500 square foot home’s value was worth a second house in taxes. “Ordinary people cannot keep a home like that,” Nakao said (via The Washington Post).
At least Nakao and her husband got the most out of the property while they had it, taking extended vacations before they sold it. The couple reported owing $400,000 to the IRS and decided to sell before going further into debt. Fortunately, the house sold quickly, and they could pay off the IRS before getting hit with any repercussions.