Buying DVC for my son and wife

[Autobotcop]

The question I have is ,,
I want to buy 400 points for my son and his wife.. basically I pay and there name go on the contract..lol,,( I will pay in full no financing)
Will this be considered a gift in the eyes of the IRS?
Thank in Advance

 

[RoseGold]

This is a question for your tax professional about your overall situation. It's not like the IRS has a special timeshare exception for gifts.

There are other ways to title DVC, like to trusts or to LLCs. People do it all the time as part of their estate plans.

 

[peabody58]

I'm not a tax expert (but I did stay at a DVC villa recently), but I think you can count it as an early inheritance transfer, which should be tax free unless its more than $5 million (i.e., buying RIV). Keep good records in case the IRS challenges you.

 

[pianomanzano]

The question I have is ,,
I want to buy 400 points for my son and his wife.. basically I pay and there name go on the contract..lol,,( I will pay in full no financing)
Will this be considered a gift in the eyes of the IRS?
Thank in Advance

Can you adopt me please? But in all seriousness, best to ask the professionals on this one. One possible suggestion would be to buy it under your name and add them to title or add them as associate members?

 

[Sandisw]

The question I have is ,,
I want to buy 400 points for my son and his wife.. basically I pay and there name go on the contract..lol,,( I will pay in full no financing)
Will this be considered a gift in the eyes of the IRS?
Thank in Advance

It may or may not be, but you can just buy it for them with your name on it as a joint owner with right of surviorship. Then it automatically goes to them down the road. Or, after a few years, just do a gratituous transfer to take your name off of it?

 

[FinallyFL]

Effective Jan 1, 2022 the gift tax exclusion will be $16000 per person. So you can gift $32000 to your son and daughter without reporting anything to the IRS. Or if you are married, you and your spouse can each gift your son and daughter $16000 each for a total of $64000. I am adding my daughters to my DVC contracts and I intend to declare this as a gift on form 709. I am not a tax expert.

 

[CarolMN]

It may or may not be, but you can just buy it for them with your name on it as a joint owner with right of surviorship. Then it automatically goes to them down the road. Or, after a few years, just do a gratituous transfer to take your name off of it?

That's a way to make the gift, but it doesn't exempt the giver from the gift tax law.

Better to use the exclusion as described by @FinallyFL above

 

[KAT4DISNEY]

Effective Jan 1, 2022 the gift tax exclusion will be $16000 per person. So you can gift $32000 to your son and daughter without reporting anything to the IRS. Or if you are married, you and your spouse can each gift your son and daughter $16000 each for a total of $64000. I am adding my daughters to my DVC contracts and I intend to declare this as a gift on form 709. I am not a tax expert.

Also can do it in increments over 2-3 years to get to 400 points and not exceed the annual exemption.

 

[Great3]

It may or may not be, but you can just buy it for them with your name on it as a joint owner with right of surviorship. Then it automatically goes to them down the road. Or, after a few years, just do a gratituous transfer to take your name off of it?

This!!! This is he easiest way, title with Joint Tenants with Rights of Survivorship, and you just don't use the account, let them handle everything. Of course that means they and you need to sign everything, but it's a one time process to buy, and one time process if decide to sell.

Great3

 

[Autobotcop]

Thank you all for your help!

 

[sndral]

The question I have is ,,
I want to buy 400 points for my son and his wife.. basically I pay and there name go on the contract..lol,,( I will pay in full no financing)
Will this be considered a gift in the eyes of the IRS?
Thank in Advance

I’ve been researching the ‘gift tax’ issue and as far as I can tell all you’ll need to do is file form 709 if you exceed the annual $16,000 (or $16,000 for your son + $16,000 for his wife) and even then it only counts against your lifetime 12.6 million - 2022 numbers https://www.nerdwallet.com/article/taxes/gift-tax-rate and does not appear to be taxable income to your son/his spouse. But I’m no tax expert.

 

[brazzledazzler]

I think it might be wiser to gift them the money (per IRS restrictions) for them to buy it. My parents did this for us when we bought our home (which is also a real estate interest.)

 

[bumbershoot]

and does not appear to be taxable income to your son/his spouse.

Gifts are not taxable to the recipient in almost every circumstance.

And as your link shows, even givers rarely find themselves in the position of paying gift tax. That is the clearest explanation of the gift tax I have ever seen; thank you for sharing it. (I've received several gifts from a sibling and have tried to figure out how it affects them and that makes it the clearest I've seen)

 

[Travel60]

I’ve been researching the ‘gift tax’ issue and as far as I can tell all you’ll need to do is file form 709 if you exceed the annual $16,000 (or $16,000 for your son + $16,000 for his wife) and even then it only counts against your lifetime 12.6 million - 2022 numbers https://www.nerdwallet.com/article/taxes/gift-tax-rate and does not appear to be taxable income to your son/his spouse. But I’m no tax expert.

If you are married, you can double these amounts....you give $16 to each and wife gives $16 to each. $64,000 total.

 

[RichVIII]

One, you are incredibly generous. So kudos to you. Two, I would break the 400 up into smaller contracts so they can be sold or split up easier down the road should they need to. You would be gifting more long term value. Are you okay, in the unlikely event they spilt she owning half versus you controlling the interest? Third, I would consider (not knowing your or theirs financial situation) a smaller gift of points and some sort on investment to cover the long-term dues. The up front is just part of the financial picture and 400 points is easily 3k a year in dues. Again, don’t know the situation but wanted to offer some other ideas. You have a lucky son!!