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View Full Version : Donating DVC pts. for charity?


SevenSeasLagoon5
03-11-2010, 09:10 AM
We would like to donate some pts. for our school fundraiser.
Has anyone done this?
Would I call DVC and make the reservation for the "winner"?
Can we write the donation off on our taxes? If so, how do you determine the value?
Thanks for any help you can offer!!

chalee94
03-11-2010, 09:25 AM
We would like to donate some pts. for our school fundraiser.
Has anyone done this? Would I call DVC and make the reservation for the "winner"?

yes, you just make the reservation as you would a rental.

Can we write the donation off on our taxes? If so, how do you determine the value?

no. you cannot deduct that sort of donation.

you could donate your whole contract and deduct that (but it's complicated).

you could rent a reservation for $xx per pt and donate the cash and deduct that.

edited to add a link for more information. (http://www.tug2.net/advice/TUG_Taxes_and_Timeshares.htm)

SevenSeasLagoon5
03-11-2010, 10:14 AM
We would like to donate some pts. for our school fundraiser.
Has anyone done this? Would I call DVC and make the reservation for the "winner"?

yes, you just make the reservation as you would a rental.

Can we write the donation off on our taxes? If so, how do you determine the value?

no. you cannot deduct that sort of donation.

you could donate your whole contract and deduct that (but it's complicated).

you could rent a reservation for $xx per pt and donate the cash and deduct that.

edited to add a link for more information. (http://www.tug2.net/advice/TUG_Taxes_and_Timeshares.htm)

WOW! That info. is really, really helpful. Thanks so much!

BigTigger
03-12-2010, 12:38 AM
Tax advice is only as good as the IRS's rulings on what is allowed and what isn't.

I'm a CPA and as per the link, I do know most of the byzantine and conflicting tax laws to reference when looking at donations, dealing with rental property, etc.

Based on that background, I disagree with the advice on whether you can deduct a donated to charity week. The IRS regulations on establishing the value of goods donated are quite complex, but are well defined. Private letter rulings and tax court cases have allowed deductions for deeded real estate interests (and your DVC is a deeded real estate interest) to be donated for charity use. In the case of DVC, it should stand up as a deduction as you can find out Disney's cash rate for a comparable unit and use it as the basis for the deduction. As long as the deduction is for an arms length transaction and can be valued, it should be allowable. The charity must be a registered charity under section 501(c)3 or similar. They should give you a letter or receipt for the value of the deduction.

NewDCLGuy
03-12-2010, 08:14 PM
I disagree with the advice on whether you can deduct a donated to charity week. The IRS regulations on establishing the value of goods donated are quite complex, but are well defined. Private letter rulings and tax court cases have allowed deductions for deeded real estate interests (and your DVC is a deeded real estate interest) to be donated for charity use. In the case of DVC, it should stand up as a deduction as you can find out Disney's cash rate for a comparable unit and use it as the basis for the deduction. As long as the deduction is for an arms length transaction and can be valued, it should be allowable. Interesting, as everything I've ever read reaches the opposite conclusion*. Would you be willing to share some more detail on this?

* For example, IRS publication 526 http://www.irs.gov/publications/p526/ar02.html#en_US_publink1000229702 says:


Right to use property. A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible.

<snip>

Example 2.

Mandy White owns a vacation home at the beach that she sometimes rents to others. For a fund-raising auction at her church, she donated the right to use the vacation home for 1 week. At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. Mandy cannot claim a deduction because of the partial interest rule. Lauren cannot claim a deduction either, because she received a benefit equal to the amount of her payment.

jlewisinsyr
03-12-2010, 09:27 PM
Tax advice is only as good as the IRS's rulings on what is allowed and what isn't.

I'm a CPA and as per the link, I do know most of the byzantine and conflicting tax laws to reference when looking at donations, dealing with rental property, etc.

Based on that background, I disagree with the advice on whether you can deduct a donated to charity week. The IRS regulations on establishing the value of goods donated are quite complex, but are well defined. Private letter rulings and tax court cases have allowed deductions for deeded real estate interests (and your DVC is a deeded real estate interest) to be donated for charity use. In the case of DVC, it should stand up as a deduction as you can find out Disney's cash rate for a comparable unit and use it as the basis for the deduction. As long as the deduction is for an arms length transaction and can be valued, it should be allowable. The charity must be a registered charity under section 501(c)3 or similar. They should give you a letter or receipt for the value of the deduction.

Very interesting, I've never heard anyone state it would be an allowable deduction.

Tink6666
03-12-2010, 10:12 PM
Also a CPA and no deduction for donation of a timeshare use. Have researched this for other clients in the past 23 years...

Dean
03-13-2010, 06:10 AM
Tax advice is only as good as the IRS's rulings on what is allowed and what isn't.

I'm a CPA and as per the link, I do know most of the byzantine and conflicting tax laws to reference when looking at donations, dealing with rental property, etc.

Based on that background, I disagree with the advice on whether you can deduct a donated to charity week. The IRS regulations on establishing the value of goods donated are quite complex, but are well defined. Private letter rulings and tax court cases have allowed deductions for deeded real estate interests (and your DVC is a deeded real estate interest) to be donated for charity use. In the case of DVC, it should stand up as a deduction as you can find out Disney's cash rate for a comparable unit and use it as the basis for the deduction. As long as the deduction is for an arms length transaction and can be valued, it should be allowable. The charity must be a registered charity under section 501(c)3 or similar. They should give you a letter or receipt for the value of the deduction.Not to pile on but I am also confident that such an item is not deductible. There was a FAQ on the IRS site a few years ago specifically on this subject with a negative conclusion, they later substituted the vacation home FAQ. Dave McClintock is a retired CPA and Timeshare expert, you can find his advice on this subject Here (http://www.tug2.net/advice/TUG_Taxes_and_Timeshares.htm). Many have done so and not been audited but it is an invitation to an audit IMO as well as an automatic exclusion on that audit. However, you can rent the week out, donate the proceeds and take a deduction on that amount if you want.

CarolAnnC
03-13-2010, 11:35 AM
Not to pile on but I am also confident that such an item is not deductible. There was a FAQ on the IRS site a few years ago specifically on this subject with a negative conclusion, they later substituted the vacation home FAQ. Dave McClintock is a retired CPA and Timeshare expert, you can find his advice on this subject Here (http://www.tug2.net/advice/TUG_Taxes_and_Timeshares.htm). Many have done so and not been audited but it is an invitation to an audit IMO as well as an automatic exclusion on that audit. However, you can rent the week out, donate the proceeds and take a deduction on that amount if you want.

Dean, I am not so knowledgeable on the topic, but if you rent a week out with the intent of taking a deduction on the proceeds, wouldn't you have to pay taxes on the rental income first?

Just wondering..

jlewisinsyr
03-13-2010, 12:03 PM
Dean, I am not so knowledgeable on the topic, but if you rent a week out with the intent of taking a deduction on the proceeds, wouldn't you have to pay taxes on the rental income first?

Just wondering..

Even if you rent without the intent to donate, you should be paying taxes on the proceeds from the rental, it's income, but most do not.

Dean
03-13-2010, 03:09 PM
Dean, I am not so knowledgeable on the topic, but if you rent a week out with the intent of taking a deduction on the proceeds, wouldn't you have to pay taxes on the rental income first?

Just wondering..I think this is a far more complicated issue than above. As a rule one should count the rental as income minus maint fees and the few other associated expenses. So it really depends on how much you got in rental above the associated deductions. While I think it's possible, I feel it's very unlikely for most to meet the requirements of a free rental up to 15 days as you could in a vacation home. The reality is that anyone who rents a single reservation every few years probably don't have to worry about it.