? about tax write off

[disney1193]

Does anyone know if you can somehow write off your dvc purchase if you own a business or are self employed. I called my accountant but they are out until next week & thought I'd see if anyone on the boards knew the answer. You all are always so helpful.

 

[BigTigger]

I'll give you some free advice, but please only use it for info - verify it with your tax advisor for your situation.

1) if the business (a "C" corp, LLC, or "S" corp) owns the timeshare, it can deduct certain costs. My guess is that you own DVC personally, so the business wouldn't have much basis to support the costs as a deduction for federal and state purposes. If your small business is shown on schedule C to your federal 1040 return, then you'd also have a hard time justifying the deductions.

2) Assuming the business owns the DVC interest, you could deduct the maintenance and taxes (and interest if financed, but I doubt Disney would finance for a corporation and a bank wouldn't finance with DVC as collateral only). You can already deduct the taxes on your personal 1040 return, so I'm not sure you gain much. The business would have to show the business use of the property. By law, if you use it personally, it would have to be added to your compensation.

3) Assuming you get by #1 and #2, you have other issues with the business expenses as the IRS code limits the deductibility of entertainment expenses.

4) As far as writing off the property, the tax code sets the life and method. Where this is a real property, the life would be the lesser of 40 years or the useful life of the property (in DVC's case, that would be until 2042 or 38 years). Furnishings are not owned by you, so you aren't subject to the life limits there or need to worry about them.

 

[Dean]

I agree. A business may be able to write it off if used for the benefit of the business such as trips for customers, possibly even employees as long as those employess aren't involved in the ownership. Talk to your tax person.

 

[disney1193]

thanks so much for the great advice, i really appreciate it.