Q: I know this question has come up before, but since everyone’s situation is different, I thought I’d better ask again.

I recently entered a contest where the prize is a choice between a townhome worth about $440,000 or $400,000 in cash. This is in Irvine, CA.

I am a single school teacher, with a gross income of about $49,000 per year before taxes. I don’t have a lot of credit card debt and I’m currently renting. But I would love to own my own home.

If I were lucky enough to win the contest, should I take the house (I only have $1,000 in savings) or the cash? If I opt for the cash, I’d like to pay off a $50,000 student loan and invest the rest. About how much of the $400,000 would I get, or where can I figure this out?

As I’m sure you know, housing in Southern California is extremely high and the market is volatile, so I’m not sure if I opted to keep the house how in the world would I pay taxes, and maintenance costs. Thanks!

A: House or cash. What a great dilemma to have.

If I won the contest, I’d take the cash in a flash. Here’s why: If you take the house, you’ll probably owe taxes in excess of $150,000.

Winning the house is like having a phenomenal year in business where your income would exceed $400,000, plus what you earn in your day job. Whether you take the house or the cash, you’ll pay income tax at the highest level, plus the California state tax.

With what’s left, you can pay off any credit card debt and school debt you have, replenish your savings, and with the rest either invest it or buy a smaller, less expensive house near where you work.

If you take the house, rather than the cash, you’d still owe the taxes (think of all those poor game show contestants who owed taxes on their winnings), but would have a lot of stress thinking about how you’re going to sell the house in time to pay the taxes that are owed or have to obtain a mortgage on the home to pay the taxes.

While it seems like a little stress would be worth the effort for the extra $40,000 (the house is worth $440,000 over the $400,000 in cash), it probably isn’t because after you’re done paying the commission (6 percent, or $26,400), the transfer taxes and other expenses of selling, you’ll use up most of that bonus.

Still, it’s a great problem to have. I sure hope you win. Good luck.

April 1, 2005.