Ohio Gaming Laws, Give house as gift

[carolinadreamin]

What is the name of your state (only U.S. law)? Ohio We are thinking of holding an application process in which interested parties would pay a fee and submit an application for the purpose of receiving our house for free. Proceeds of the applications will go to pay off our mortgage and give us funds to get another house. We will select an application based on the applicants ability to renovate our home (built in 1862). Once chosen, we will "gift" our house to the applicant. I understand if a fee is paid for the application, it is similar to a raffle. However, if after we select an application, we REFUND the application fee to the applicant and then GIFT our home to that person, so they're not actually "winning" our home (because we refunded the application fee), would that change their tax obligation? And is this scenario legal in Ohio? Thank you.

 

[FlyingRon]

You can't weasel out of the fact you are running an illegal lottery with this subterfuge.

Unless you give EVERYBODY back their money after you select your winner, you still have people putting up something tangible in a probabilistic chance to get something else. In fact, in your case all you are doing is awarding the "HOUSE" plus whatever the entry fee is (so your prize is bigger than just the house itself).

First offense violation of this is a misdemeanor of the first degree (repeat is a felony). You can get six months in jail and/or $1000 fine.

 

[STEPHAN]

You are trying to avoid illegal lottery regulations by getting advice from anonymous people in an internet forum? Really?

 

[tranquility]

Even if the circumvention of lottery laws would fly, you cannot structure things to avoid the tax laws in this manner. If I "gift" you $100 with the understanding you will "gift" me something back, that is a sale. Same here. It is a raffle and the home would be income to the recipient.

 

[carolinadreamin]

Ok. Wow. It was just a question. We are honest people just trying to figure out how to get out from under our house in a depressed market. We would never do anything illegal, hence, the PRELIMINARY question to a very NEW idea in a forum where EVERYONE is asking for legal advice from people on the internet. Didn't realize I'd be insulted and berated. Geez. Thanks for nothing.

 

[carolinadreamin]

Tranquility - thank you for the only courteous response.