Any tax implications for renting points?

[bpmorley]

Remember, that if that membership is owned by a corporation...or if the reservation is rented by a corporation...there is a chance a 1099 will be issued. Audits aren't my idea of fun.

I own my contracts and have no intention of renting to a corporation. That's a whole gray area thats best to avoid

 

[Anthony1971]

I would only rent to a friend I would rather give the points away to family if need be....
The problme belcomes an issue for the Occasional renter if you are reported or you are moving large enough sums of money for the irs to see.... In general form what I understand the IRS is not going to audit you unless it makes them money. In other words if you rented 25 points for 10 each and do not report 250.00 chances are they will never know unless it is reported by somone... To add to this everything you sell on Ebay is income -- If you order something on the internet and do not pay tax you are suppose to claim that on your state... I would not be concerned about renting a few points every 3 or 4 years.. If you rent every year you may have a problem... Should you report it YES but will it slip through the cracks.. Most likely

 

[crisi]

But you could get audited for other reasons and have them decide to go over every deposit made in your checking account. We just had an IRS agent talk to us in a tax course, they are really trying to crack down on this sort of small "slip through the cracks stuff" - sick of losing billions in eBay income. They figure enough audits in this area - even if they don't make money on each audit - will encourage compliance and they'll come out ahead.

They are also actively scanning the internet looking for tax cheats.

 

[WDWorld2003]

I've rented our points out a few times and have always reported the income. My accountant deducts the maintainence fees and we have a net income. I would much rather be safe than sorry as we're one of the middle class bpmorley is talking about

 

[bpmorley]

I would only rent to a friend I would rather give the points away to family if need be....
The problme belcomes an issue for the Occasional renter if you are reported or you are moving large enough sums of money for the irs to see.... In general form what I understand the IRS is not going to audit you unless it makes them money. In other words if you rented 25 points for 10 each and do not report 250.00 chances are they will never know unless it is reported by somone... To add to this everything you sell on Ebay is income -- If you order something on the internet and do not pay tax you are suppose to claim that on your state... I would not be concerned about renting a few points every 3 or 4 years.. If you rent every year you may have a problem... Should you report it YES but will it slip through the cracks.. Most likely

I'm in the same boat, I've never rented and I would only rent to someone I know or just give the points away.
Big question is, What is the definition of large amount of money? It changes, just like the tax codes every year. As recent as 2004, no flags were up for anything less than 10K. The following year they made it 2K. There are ways around moving "large" amounts.

 

[bpmorley]

I've rented our points out a few times and have always reported the income. My accountant deducts the maintainence fees and we have a net income. I would much rather be safe than sorry as we're one of the middle class bpmorley is talking about

Of course your accountant is going to do that. He doesn't want to face the IRS. At that point your dealing with a middle man.

 

[bpmorley]

Let me try to set this straight. I'm not saying that everyone should should completely cheat on their taxes(bit a little fudge maybe). I wasn't talking about the commercial renter, that's a whole other ballgame. But if you make a small sum once in a while, even once a year. Then why bother reporting. If you forget to bank your points and you lose them, you can't get a loss. Now for anyone that has 1000, 2000+ points and rents every single one of them out, then yes you should be reporting.

 

[salmoneous]

I'm not saying that everyone should should completely cheat on their taxes(bit a little fudge maybe).

There's no such thing as "a little fudge". What you are suggesting is tax fraud. Period.

Then why bother reporting.

Because the law requires it, and some of us believe in obeying the law - either because it's the right thing to do, or because we don't want to worry about the consequences, no matter how slight, of getting caught?

Because you sign your name at the bottom of the tax form, pledging that you have completed it honestly? Some of us take our name/word of honor seriously.

 

[bpmorley]

There's no such thing as "a little fudge". What you are suggesting is tax fraud. Period.

Because the law requires it, and some of us believe in obeying the law - either because it's the right thing to do, or because we don't want to worry about the consequences, no matter how slight, of getting caught?

Because you sign your name at the bottom of the tax form, pledging that you have completed it honestly? Some of us take our name/word of honor seriously.

well if that's the case, do you always cross the street at the corner? Do you come to a complete stop at every stop sign? Have you ever had a couple drinks and been behind the wheel? Have you ever gone over 55 on a highway? I think you see where I'm going here.
personally if I ever rented my points I wouldn't report the income. Period.

 

[salmoneous]

I'm a sinner and law breaker just like everyone else on this board. I'm not here to tell people how to run their lives. You asked "why report this income?" I explained why people might.

 

[bpmorley]

I'm a sinner and law breaker just like everyone else on this board. I'm not here to tell people how to run their lives. You asked "why report this income?" I explained why people might.

ok then. I'm not telling people what to do, it's just my suggestion. What they do is totally up to them.

 

[Darkside]

First of all the IRS requires you to claim all income, period. Section 61(Gross Income Defined) of the Federal Taxation Statutes and Regulations. This applies to any one, in any state or country(if you are a US citizen). If you claim income on your DVC and you do this on a regular basis you a running a business, in which case you can deduct your maintenace fees and possibly the cost of the DVC. I use this example: State and municipal bonds are tax free, but still have to be reported on your tax returns. I say this as a small business owner for 17 years and an accountant that you should see a qualified tax professional(a computer or software does not qualify as a tax professional) and guess what? That cost is tax deductable.

 

[Anthony1971]

I'm in the same boat, I've never rented and I would only rent to someone I know or just give the points away.
Big question is, What is the definition of large amount of money? It changes, just like the tax codes every year. As recent as 2004, no flags were up for anything less than 10K. The following year they made it 2K. There are ways around moving "large" amounts.

From what I understand if you do not owe 500 the IRS will in most cases not go after you as they only have a certain amount of resources and this limits the number of people they can audit... Now if you have a running total with in the limitations that also be a factor... Would I suggest to anyone not to report it NO.... But in the same fact those who worry about reporting this should also keep track of E-bay purchases and tax free stuff they but via the internet or even on a cruise... Almost everyone hides something... Those wonderful cash Charitable donatations are no longer unless you get a reciept.. If the IRS saw rentening timeshare as huge loop hole they would do something about it.. But for the one who rents a few points here and there.... and I define a few points here and there as extra points that can no longer be banked after following the same vacation habits for years... But again I would say you should report it if it gives you peace of mind...

 

[bpmorley]

... But again I would say you should report it if it gives you peace of mind...

I guess if you're going to be worried about it then by all means report it. But I would never bother if I wasn't at least getting my annual fees back.

 

[Anthony1971]

But you could get audited for other reasons and have them decide to go over every deposit made in your checking account. We just had an IRS agent talk to us in a tax course, they are really trying to crack down on this sort of small "slip through the cracks stuff" - sick of losing billions in eBay income. They figure enough audits in this area - even if they don't make money on each audit - will encourage compliance and they'll come out ahead.

They are also actively scanning the internet looking for tax cheats.

wow you would really need to piss someone off for them to go through every transaction and require proof.. Or that IRS person is just......
I would belive this happening but I doubt to your average Joe that truthfully ONLY hides the rental of 25 points once every three years..
You can avoid this however by taking MO or CASH in which they can trace it back to a person...
As far as I know they are trying to have online paymnet services report to the IRS and I believe they do withing certain limits (higher amounts and # of transactions)
I know if you buy Cigarettes online people are getting bills plus penalties...Especially in NY this is state tax but it goes to show that yes someone is watching.. But this is reported by the seller and sometimes they are forced to......

 

[Anthony1971]

I guess if you're going to be worried about it then by all means report it. But I would never bother if I wasn't at least getting my annual fees back.

I never said I would but I also would never write what I actually do and do not do (do do)

 

[bpmorley]

I never said I would but I also would never write what I actually do and do not do (do do)

I just went back and read my posts. I don't actually say that I do anything. I've never rented so I haven't had the opportunity. I don't intend on renting so the subject may never come up for me. But if I was to rent.....

 

[rinkwide]

This is Mr. Bojangles.

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(First off, Mr. Bojangles would like everyone to know that he is neither a sinner nor a law-breaker.)

'[oi ed;'sd'nda;nf'vb sd 'dlnf va'dlkfn'lakdjnf ;vdk fn'd d'lkfn v'lkd 'ka'fnb'lkn'xn'fn'd'oaeihfvn'ldknm ad d dijfb ; n/nbvf lsb b;ksjibnm c jdf ;djnf ndj';jdlknf ;dlkjnf ;ndnlkdn 'l dn 'lkdsn'fln

(Mr. Bojangles says that while he is not a tax advisor, he did play one in the 1998 Disney movie "The Hairy Accountant" - A little-known straight to video sequel to "The Shaggy D.A.")

' d'fjv;b a' 'aldkfn'lkand 'flkdn'lndhf;bn'nditu['oiebn' d'l d;jh odjn'sdlfh' 'n'ldkn 'df'lnd'lkdohnbbuieb'nf; dd;jnbfdjnf 'do'dlk dd

(Mr. Bojangles says the tax advice you receive on internet message boards is worth exactly what you pay for it.)

;asjudbfrv ;as'nfv iaehrblskn;iejuhrbf oajnd 'lajdsnriubhd;jfn';lkj fojf' lajhfdsvans d/;aksjf ;sjkh adkn ruiad m.n rh ;ksfd /adn ;ak ka dskjbrf/k,mdsn nkj'lkn s'djfhn v;nkjnf 'ldn d;lkjndf 'ljknasdihb;bnd;kjnf woeuih;djkln'asljkdnf 'od 'fjkn'lsdkn' v'sjn 'adln'lsdjknhtub 'djlkndf 'sodn f'lksdn 'sdi' slds djnf'ldskjn 'sdlkn d''

(Mr. Bojangles says that when visiting the Caribbean Beach Resort make sure to order one of their house-special "Banana Cabana" tropical drinks. They are delicious but something in them makes you want to run around the pool without any clothes on - which is fine for Mr. Bojangles but not for most other guests.)

'ajdbf v'aldkfjn ;sdkjfnb s;djlknv 'asjfhb ;dlkjn ';kdsjfn'd ljhsb's'adjbf k'sj jfbhfgbv;kjnf'kjsdnb f;kdjnf ;kdj

(Mr. Bojangles says Disney's Animal Kingdom is a nice place to visit but he doesn't want to live there.)

 

[Anthony1971]

I just went back and read my posts. I don't actually say that I do anything. I've never rented so I haven't had the opportunity. I don't intend on renting so the subject may never come up for me. But if I was to rent.....

Ask yourself if you feel Lucky!

ANYTHING that you recieve as income (other than most gifts) you need to declare.
If you recive a skinny chicken as a Christmas bonus from your employer you need to decalre it via a $ value and pay taxes on it.
One skinny chicken value = 1.99 tax at 40% rate = .796 cents make check payable to the IRS

can this be offset by something see a tax advisor....
Even if you do not end up owing money on something it should still be listed on your tax return.
Interest income under $10.00 -- the bank does not have to send you a 1099int but you should still list this on your return even if it ends up being exempt from tax.
That is the right way
Even if you see a tax advisor they will only know what you tell them and supply documents for... So bring all..
The flip side is and look at it this way if you donated a Skinny chicken you would want to take that as a deduction (make sure to get a reciept) -- if you recive it they want the taxes

 

[crisi]

wow you would really need to piss someone off for them to go through every transaction and require proof.. Or that IRS person is just......
I would belive this happening but I doubt to your average Joe that truthfully ONLY hides the rental of 25 points once every three years..
You can avoid this however by taking MO or CASH in which they can trace it back to a person...
As far as I know they are trying to have online paymnet services report to the IRS and I believe they do withing certain limits (higher amounts and # of transactions)
I know if you buy Cigarettes online people are getting bills plus penalties...Especially in NY this is state tax but it goes to show that yes someone is watching.. But this is reported by the seller and sometimes they are forced to......

Apparently they are doing it, they are trying to make examples of enough eBayers. I doubt they are going to do it for 25 points every three years, but if they think you are hiding income, if you are hiding one thing, you may be hiding more.

BTW, this guy was trying to recruit a bunch of accounting students into working for the IRS - so going through an individuals deposit records one by one was not being told to us to scare us into compliance - he was telling us what the job would be like.