accounting question-need an expert who knows investments

[msdis]

When you sell stocks you can offset losses with gains. When you sell DVC can you do the same? Not in the sense of a write down but more in the sense of an offset. We have 2 different resorts that I think we are going to sell and given the price paid I'm sure we are going to lose on one and modestly gain on the other. I know with real estate you cannot take a loss and off set income or other investments like stock when it comes to real estate unless an investment, which DVC would not fall under. I wondered if you could group the points together like various blocks of stock and use the dates and prices as "various" like you would stocks and off set them that way. Or if because they are different resorts you would have to keep them separate. Again, I know DVC is not an investment but for accounting purposes you do need to file with the IRS when you sell and I am looking for offset info not gain/loss. I hate to let uncle Sam charge me on one while I take a loss on the other. TIA!

 

[rayelias]

I'm no expert, but *if* DVC is considered, by the IRS, as real proprety, then I think you have a couple options. One of which would be a 1031 LIKE-kind exchange. However, *if* this is applicable, you need to do certain things BEFORE entering into your first agreement. I believe, once you actually enter into the agreement, it may be too late. Please let me repeat - I'M NO EXPERT - so please no flames.

Or, I believe you can offset any "capital loss" income against any "capital gains". I don't know if you can offset against any other type of income (earned, passive, etc.)

Hopefully someone with some knowledge will reply. This is a very interesting question.

 

[msdis]

Thanks rayelias for your reply. Since this would be a "sale" I don't think a like kind exchange would work since the "exchange" would be cash only not another "like kind" property. The net will result in an unreportable loss since this is "personal" property but a gain gets reported as income. Nice how it only favors the IRS. But I just wonder if I need to treat them as 2 separate properties of if I can call them X# DVC points with a net $ loss or if I need to call them X# BWV and X# VWL and report them separately, rather than group them which will "wash" the points that will hold a gain. Again, thanks for your help.

 

[Doctor P]

I would find the circumstances in which you could group the sales to be very rare. You, I would assume, have a different basis in the points, and perhaps have a different sales price on the points. This further suggests the need to treat them as separate transactions. There might be circumstances in which this will not be true, but, as I said, they would be rare in my opinion.

 

[msdis]

Thanks Doc, I'm half being lazy and we are in the middle of moving so I know not where anything is. Probably the form is such that you can report multiple transactions and the end result will all work out anyways. My other plan is to just sell the contracts that I paid more for and won't have to worry about any gains.