Boy, this can get complicated......

[Sharper]

Let's say you own a home and purchase a DVC point package (no other home or vacation home) The property tax on both is deductible under normal circumstances. What if you buy a second package? Can you add the two (or more) interests in the timeshare and claim the property tax paid on multiple packages? On one hand, it would seem okay (it shouldn't matter if you bought three 100 point packages or one package of 300) but it seems to get a little sticky. Anyone have any input on how the IRS generally views property tax deductions on multiple DVC packages?

 

[drusba]

According to my tax accountant, multiple contracts at DVC are all deductible for property tax. Don't ask me why.

 

[Caskbill]

The way I've always understood the IRS rules was that property taxes are all deductible, no matter how many properties you have.

However, loan interest paid is only deductible on your primary residence and ONE other residence, whether that residence be a time share, a cabin in the woods, an RV, or a self contained boat. (I.E. any property that has sleeping, cooking and bathroom facilities).

However one way around that is simply to pay for the other properties using a home equity loan on your primary residence.

Anyway, this is my understanding. I'm not a professional accountant so you should definitely verify this if you have any questions.

 

[Shontell_Crawford]

I'm no accountant either, but I would think you should be able to deduct the entire portion of taxes since it comes from one billing "entity".
However, I could see where the IRS might argue an OKW and HH tax prep being under the same umbrella.

Interesting question. I need to add some OKW points to my HH and try it.

Let us know if you hear from a professional.

Kind regards,
Shontell

 

[EROS]

Property taxes on MULTIPLE properties are ALWAYS deductible under IRS rules. If you owned 3 homes, 2 summer cottages,and 3 timeshares, you could deduct the taxes on ALL. Of course, if any of the properties provide RENTAL income, then the tax is deducted on your Rental schedule, not Schedule A.

 

[DVCDAVE]

EROS is 100% correct. I would also like to add a few thoughts. First keep in mind that if you do an 'add on' through Disney, they do NOT issue another contract number, they add to your exisiting contract. If you purcase at another property, they keep the same contract, and add a suffix. ( ie contract number xxxx xxxxx.001, & contract number xxxx xxxx.0002, etc.)

Now with that in mind, if you have a loan through Disney and assuming you itemize on your 1040, no other second home, Disney sends you 1 form 1098 for all your mortgage interest. That being said, all DVC interest, reardless of the number of 'add ons' are deductable. Providing all your mortages added together do not exceed $1,000,000.

Doing several resale purcahses, or mixing both a resale and a direct purcahse, may complicate things for the interest expense deduction, as differant lenders would be report seperately on different contract numbers. Leaving the IRS to believe there is more than one vacation home.

Of course as EROS said, property taxes are always deductable.

 

[Sharper]

Please let me make sure that I understand this correctly by giving a scenerio. If you buy 200 points through resale -- say OKW with June use year, then buy 200 through Disney, for BCV with August use year -- then the end-of-year statement from Disney would reflect all interest paid (to Disney, of course, not any other sort of financing via home equity loan, etc.) AND would simply have a total of property taxes paid (or due) for both packages? That makes it much easier and is more logical, so I hope that is the case!

 

[CarolMN]

Originally posted by Sharper
Please let me make sure that I understand this correctly by giving a scenerio. If you buy 200 points through resale -- say OKW with June use year, then buy 200 through Disney, for BCV with August use year -- then the end-of-year statement from Disney would reflect all interest paid (to Disney, of course, not any other sort of financing via home equity loan, etc.) AND would simply have a total of property taxes paid (or due) for both packages? That makes it much easier and is more logical, so I hope that is the case!

Property taxes are included (and paid) as part of your annual dues. The only place I remember seeing property taxes listed is on that statement. (But my DH does our taxes, so I could be totally off base, LOL) We only own at one DVC resort, but don't you get separate "dues breakdown" statements for each resort?

Anyway, I think the best advice you have gotten so far is to check with your own tax preparer/accountant. You could also call your guide and ask him if you can talk to someone in Member Accounting. They should be able to tell you what tax forms/info DVC provides at tax time. For some reason, I don't think this Forum carries much weight with the IRS!

 

[RobDoc]

If you buy 200 points through resale -- say OKW with June use year, then buy 200 through Disney, for BCV with August use year -- then the end-of-year statement from Disney would reflect all interest paid (to Disney, of course, not any other sort of financing via home equity loan, etc.) AND would simply have a total of property taxes paid (or due) for both packages?

If you buy a resale contract, Disney will NOT be involved in the financing and thus, will NOT provide any interest information on the resale. In order for the interest on a resale to be deductible, it will have to be secured by a mortgage on the property itself (or by a home equity loan, as already mentioned).

Property tax information is available, but will NOT be broken down in a simple statement at year's end. Each DVC resort will have a different "per point" property tax amount. You will need that figure and then multiply it by the number of points you own and add the totals together for the resorts you own. DVC will not provide the breakdown for each member.