Canadian Question - Claiming Mortgage Interest for DVC Purchase?

[dvcdisney]

A friend of mine had made their first DVC purchase this year. She had mentioned that she received a tax receipt for Mortgage Interest. She had asked me how she could claim that. I had no idea. I have never received this tax receipt from DVC and I didn't know that you can claim the Mortgage Interest that was accumulated from US in a Canadian Income Tax.

I would appreciate any information or suggestions.

 

[CanadianGuy]

In the US you can claim interest paid on your mortgage and certain types of vacation residences as a tax deduction.

There is no such deduction in Canada that I'm aware of. But the DVC will still send you a receipt as a matter of business.

Some Canadians have need to file in both countries for example.

Knox

 

[dvcdisney]

Thank you for the info.

Okay. Now I understand. She could not really explain it to me. I was wondering why I didn't get one. So, if you finance the purchase, the finance interest, in this case, is the Mortgage Interest.

So, would she have to submit a US Income Tax?

 

[CanadianGuy]

No.. You only submit a U.S. tax return if you have U.S. source income.
(for the most part)

As with everything there are exceptions... your tax professional is your best guide on that. Is your friend located in Canada? Has she ever lived in the U.S.?

DVC ownership alone really is not a reason to file a U.S. return.

 

[dvcdisney]

Yes, she lives in Canada. And no, she has not resided in the US.

I had mentioned to her that it was probably something that can only be claimed in the US by a US citizen with income. I thought it would be something that is used to lower the income. So if you don't have income, there is no need for this claim.

However, I will give her your advice to speak to a tax professional. I'm sure that's the best bet. I was just a little confused since we have been DVC members for more than 6 years and have never received it. Now I see that it is only given to those who financed it and, of course has paid them interest. It makes perfect sense.

Thanks. I appreciate your help.

 

[CanadianGuy]

Yes that's correct. This deduction lowers your income and thus your tax liability in the U.S.

No U.S. income = No reason to file.

And yes, if she financed thru Disney and you did not.. that is exactly why you haven't received it and she has! Good catch!

Knox