If you win the house that is 750000 value and you pay the 25% gambling tax on it, then sell the house for less than 750000 do you have to pay taxes on the sale?

[Anonymous]

no your basis becomes $750,000.   was the house used for anything before sale - rental, personal residence? 

[Hal_Al]

No. Your cost basis is $750,000, because you paid income tax* on that amount.  If you sell for less, you will have a capital loss not a taxable gain.  Depending on how you used the property, you may even have a deductible loss**.

* I assume by "gambling tax", you  paid 25% federal income tax , through withholding or some other way.  You report the $750,000 prize as income on your tax return and then claim the 25% withholding as a credit.

**If you used the  property for personal use (home or 2nd home, including letting friends or relative live there), you may not deduct the loss.  If it was treated as investment property (no personal use), you may deduct the loss.

[pk]

@besatt01  agreeing with @Hal_Al  as to the tax treatment of the sale of a gambling win and disposition thereof, pending I would like to make a few small points -- (a) these are two separate transactions --- for the investment cost of the lottery ticket(s) you gained an asset with an FMV ( not value as declared in the promotional  literature ) of $XXXX --- thus you pay taxes on this income; (b) when you dispose of the asset to a non-relative  ( i.e. an arms length transaction, assumed to be at FMV ) for $YYYY, your  cost basis  for purposes of gain/loss  computation is $XXXX plus  cost of any improvements LESS any allowable depreciation.;  (c) you are taxed on any gain at your marginal rate or capital gains rate while losses are generally not recognized unless the asset was used for income generation.  This is substantially  the same as @Hal_Al  reply except I am drawing attention  to  FMV at acquisition ( not advertised "value)  and  FMV at disposition.