Cruise Swap via 3rd party brokers

[Brian Noble]

"They are never reported on a 1099 and no one claims them as income" is not the same as "By law, they are barter exchanges that are not taxable."

As always, I am neither a tax lawyer, nor did I stay at a Holiday Inn last night. And I'm not seriously suggesting that they are. But, I can see an argument for how they might be.

Of course, in the specific case of Interval cruise exchanges, you are giving up much more than you are getting, so even if you filed, you would not have a liability.

 

[VGCgroupie]

"They are never reported on a 1099 and no one claims them as income" is not the same as "By law, they are barter exchanges that are not taxable."

As always, I am neither a tax lawyer, nor did I stay at a Holiday Inn last night. And I'm not seriously suggesting that they are. But, I can see an argument for how they might be.

Of course, in the specific case of Interval cruise exchanges, you are giving up much more than you are getting, so even if you filed, you would not have a liability.

Maybe thats why they charge so many points. I kid.

 

[Sandisw]

"They are never reported on a 1099 and no one claims them as income" is not the same as "By law, they are barter exchanges that are not taxable."

As always, I am neither a tax lawyer, nor did I stay at a Holiday Inn last night. And I'm not seriously suggesting that they are. But, I can see an argument for how they might be.

Of course, in the specific case of Interval cruise exchanges, you are giving up much more than you are getting, so even if you filed, you would not have a liability.

I also wonder if it is because the exchange via Disney and Interval are part of the actual timeshare program.

Using a broker is not…they are simply a travel agent booking the cruise.

So, that could be why it theoretically is different for tax purposes.

 

[Anthony1971]

I also wonder if it is because the exchange via Disney and Interval are part of the actual timeshare program.

Using a broker is not…they are simply a travel agent booking the cruise.

So, that could be why it theoretically is different for tax purposes.

While being an accountant now different title this is viewed as a sale and purchase, Just like selling something on Ebay then buying something with the money you receive - except you will pay sales tax as well on the item you buy from Ebay so a worse deal. When one uses a program you are not selling your points you are exchanging them within the program itself. In other words the points you own can be used for X so exchange is the confusing word as are you are in fact not exchanging you have the right to ..... with your purchased points. Not in a condescending way it is logic some can answer this with no math formula, some with a math formula but do not understand , some after thinking about it for 20 minutes with or without the formula and some weeks or years or never.

Accounting and tax code is a literal rule and one must not only meet the rule they must meet every aspect of the rule written in the sentence. After there may also be AND meet 3 (or all) of the following. If you do not meet ANY one part you do not qualify. ANYTHING outside or any interpretation is a grey area and you may be sent a tax bill and you will need to prove.... easy 25 MPH sign in a school zone still applies when school is not open. Your gonna get a ticket you are free to argue with the judge and pay at the door. In this case a sale is sale YOU simply chose to use the funds to purchase something else.

 

[Tatebeck]

While being an accountant now different title this is viewed as a sale and purchase, Just like selling something on Ebay then buying something with the money you receive - except you will pay sales tax as well on the item you buy from Ebay so a worse deal. When one uses a program you are not selling your points you are exchanging them within the program itself. In other words the points you own can be used for X so exchange is the confusing word as are you are in fact not exchanging you have the right to ..... with your purchased points. Not in a condescending way it is logic some can answer this with no math formula, some with a math formula but do not understand , some after thinking about it for 20 minutes with or without the formula and some weeks or years or never.

Accounting and tax code is a literal rule and one must not only meet the rule they must meet every aspect of the rule written in the sentence. After there may also be AND meet 3 (or all) of the following. If you do not meet ANY one part you do not qualify. ANYTHING outside or any interpretation is a grey area and you may be sent a tax bill and you will need to prove.... easy 25 MPH sign in a school zone still applies when school is not open. Your gonna get a ticket you are free to argue with the judge and pay at the door. In this case a sale is sale YOU simply chose to use the funds to purchase something else.

Maybe it's just me but a lot of this wording seems confusing. I am not 100% sure if you are trying to explain why you think the Disney program is exempt but others may not be, but that's what I think you are trying to say. I personally think (and DVC swap programs also seem to think) that both are exempt.

Also you may need to use a different example, because in actuality, school zone speed limits generally DO NOT apply when the school is closed... so you could pretty easily get out of that ticket if it was outside of posted school/speed limit zone hours

 

[Moonspinner]

Cruise swaps with Interval dont get taxed as a barter so that is where the debate comes in. Why is one taxable and not the other.

Dvc is a point system. When you use your points with dvc for dcl that is how the program is supposed to work. You don’t get taxed everytime you use your points to stay at bay lake tower or SSR. Dcl is part of the time share point option. We use our points on dcl all the time and the IRS can KMA.

 

[VGCgroupie]

Dvc is a point system. When you use your points with dvc for dcl that is how the program is supposed to work. You don’t get taxed everytime you use your points to stay at bay lake tower or SSR. Dcl is part of the time share point option. We use our points on dcl all the time and the IRS can KMA.

As far as I know you also don’t get a 1099 when swapping into RCI for other hotel properties either.

 

[VGCgroupie]

Maybe it's just me but a lot of this wording seems confusing. I am not 100% sure if you are trying to explain why you think the Disney program is exempt but others may not be, but that's what I think you are trying to say. I personally think (and DVC swap programs also seem to think) that both are exempt.

Also you may need to use a different example, because in actuality, school zone speed limits generally DO NOT apply when the school is closed... so you could pretty easily get out of that ticket if it was outside of posted school/speed limit zone hours

I thought I was just tired and busy (I’m at the parks) and that’s why I wasn’t quite grasping what was being said.

 

[Moonspinner]

As far as I know you also don’t get a 1099 when swapping into RCI for other hotel properties either.

Exactly. Dvc is a flexible timeshare where the points can be redeemed in a variety of ways.

 

[Sandisw]

As far as I know you also don’t get a 1099 when swapping into RCI for other hotel properties either.

Correct. But if you are using your points outside of the exchange system that is part of the program, is it the same thing for tax purposes?

Obviously DVC Rental Store believes that owners who rent and then use funds for a cruise through them eliminates the 1099.

However, I doubt it’s been put to the test because reporting rental income is on the owner since you don’t issue yourself a 1099 when you do it privately.

 

[Tatebeck]

Correct. But if you are using your points outside of the exchange system that is part of the program, is it the same thing for tax purposes?

Obviously DVC Rental Store believes that owners who rent and then use funds for a cruise through them eliminates the 1099.

However, I doubt it’s been put to the test because reporting rental income is on the owner since you don’t issue yourself a 1099 when you do it privately.

Unless there is a specific law or tax code (and I don't think that there is) that says swaps like these can only be done by the original developer of the timeshare or are only tax exempt if done by the original developer, then I believe any business should be able to do it.

Just like you get the same tax benefit whether you trade in your car for $10,000 to the original dealer/manufacturer for an upgrade vs doing it via a third party dealer.

If the third party swaps would be taxable or have a 1099 required, then Disney's own probably would have to be as well, unless specifically exempted.

 

[Moonspinner]

Unless there is a specific law or tax code (and I don't think that there is) that says swaps like these can only be done by the original developer of the timeshare or are only tax exempt if done by the original developer, then I believe any business should be able to do it.

Just like you get the same tax benefit whether you trade in your car for $10,000 to the original dealer/manufacturer for an upgrade vs doing it via a third party dealer.

If the third party swaps would be taxable or have a 1099 required, then Disney's own probably would have to be as well, unless specifically exempted.

Agree that you cannot apply a tax to point usage with a third party and not apply it to any similar point usage. By this logic, if i own SSR and book BRV, i should be taxed. And, as @VGCgroupie pointed out, owners are already using points with a third party when they use interval. In that case points are moved out into a different system like it is with dvc rental store and others. Whether or not Disney promotes the third party is irrelevant for tax purposes.

There are a lot of people on here who seem to want to pay extra taxes!

 

[Moonspinner]

It seem by this logic, every time I use dvc points I am “bartering.” If I buy cheap SSR points and use them at VGF where the home points are more expensive to purchase, I am “making money” on the deal. If I buy Poly tower points where the points are quite expensive and then stay at Vero, where the points cost next to nothing, I am losing on the deal. Do I get taxed on my VGF stay and get to depreciate my Vero stay?

I wouldn't say its debatable at all as it would be a barter and something that is taxable.

https://www.irs.gov/taxtopics/tc420


Additionally found this that seems to help explain it further as I would understand it:
https://pmanagementgroup.com/complete-guide-on-timeshare-tax-deductions-2/



The deduction if it applies likely is a good portion of your value and the income would be fairly minor likely for most people trading in 100-150 points for $10 of net proceeds each point.

Not an expert though at all.

 

[supercarrie]

Alternative is people can rent their points out here or elsewhere like Facebook where you don't give away a bunch to a 3rd party.

When you rent out your own points you are pretty well protected since you can get money months prior to the actual rental. Essentially making it so they couldn't try to challenge it at that point on things like Paypal.

This also means you have more control on your cruise and can even go outside of DCL if you want since their pricing has went up so much in recent years.

The www.dvcrentalstore.com swap program has more options than DCL, to be clear. Universal vacations, Royal Caribbean cruises, Sandals/Beaches resorts, even Adventure by Disney. Lots of options. Their example Royal Caribbean cruise swaps make you realize just how valuable our DVC points are (and how competitive Royal Caribbean pricing is relative to DCL).

I haven't done it yet but am strongly considering it for 2026.

 

[VGCgroupie]

The www.dvcrentalstore.com swap program has more options than DCL, to be clear. Universal vacations, Royal Caribbean cruises, Sandals/Beaches resorts, even Adventure by Disney. Lots of options. Their example Royal Caribbean cruise swaps make you realize just how valuable our DVC points are (and how competitive Royal Caribbean pricing is relative to DCL).

I haven't done it yet but am strongly considering it for 2026.

So far I am very happy with the service. I did be sure to follow up and make sure my funds were not sent to me since @HyperspaceMountainPilot had an issue with them accidentally issuing a check for the rental.

 

[Sandisw]

The www.dvcrentalstore.com swap program has more options than DCL, to be clear. Universal vacations, Royal Caribbean cruises, Sandals/Beaches resorts, even Adventure by Disney. Lots of options. Their example Royal Caribbean cruise swaps make you realize just how valuable our DVC points are (and how competitive Royal Caribbean pricing is relative to DCL).

I haven't done it yet but am strongly considering it for 2026.

One thing that Royal does more than DCL is sales. They have them all the time and as long as you are before PIF date, you can get the better deal!

But, I agree that having points one can rent to cover the cost of a different trip is really beneficial and not necessarily something other timeshares can offer!

 

[AstroBlasters]

The arguments above remind me of when I had a friend argue that he could deduct his suits as a business expense…. and I explained that the tax code does not allow that because they are not necessary and exclusive to his job (like a uniform).

I had also just covered this point in a tax course I was taking at the time and knew he was wrong…. but he didn’t want to be wrong and so he came up with any argument he could to convince himself that he was right because he wanted a tax deduction.

That was almost 20 years ago and we laugh about it now because he makes a lot of money and hired a CPA who told him there is no way he can deduct his custom suits as a tax write off…

 

[sethschroeder]

It seem by this logic, every time I use dvc points I am “bartering.” If I buy cheap SSR points and use them at VGF where the home points are more expensive to purchase, I am “making money” on the deal. If I buy Poly tower points where the points are quite expensive and then stay at Vero, where the points cost next to nothing, I am losing on the deal. Do I get taxed on my VGF stay and get to depreciate my Vero stay?

When you use SSR points at VGF you are simply redeeming your points with the larger DVC program and has fixed redemption costs. You are not selling your points to DVC who then gives you are room as payment.

Meanwhile saying "I would like a cruise" (making a purchase) and saying "here is your payment" (DVC Points) is different.

One of these actions happen within the deeded real estate interest rules. The other is a stand alone transaction.

Individuals wanting to report everything correctly should talk to an expert and outline the process correctly. Those who want to ignore this can do as they wish.

 

[sethschroeder]

The www.dvcrentalstore.com swap program has more options than DCL, to be clear. Universal vacations, Royal Caribbean cruises, Sandals/Beaches resorts, even Adventure by Disney. Lots of options. Their example Royal Caribbean cruise swaps make you realize just how valuable our DVC points are (and how competitive Royal Caribbean pricing is relative to DCL).

I haven't done it yet but am strongly considering it for 2026.

Got it they always seem to talk about DCL only whenever I see it.

Regarding the value of your DVC points take a look at the rental sub here, rental groups on Facebook, the cruises you are looking at, then decide on if its worth it or not.

The rental store is great for a more hands off process and slightly easier process than renting the points yourself. My biggest concern if I was going to go this route was how good they are about controlling your cruise booking. There are cruises that get changed and cancelled and I either want direct control or want someone I know who is super responsive.

 

[Sandisw]

Got it they always seem to talk about DCL only whenever I see it.

Regarding the value of your DVC points take a look at the rental sub here, rental groups on Facebook, the cruises you are looking at, then decide on if its worth it or not.

The rental store is great for a more hands off process and slightly easier process than renting the points yourself. My biggest concern if I was going to go this route was how good they are about controlling your cruise booking. There are cruises that get changed and cancelled and I either want direct control or want someone I know who is super responsive.

To add, the cruise lines adjust their pricing all the time. While it may be minimal for DCL, the other ones do.

I know several who have gotten great savings when sales come out…just recently, price went down almost $400 a cabin with a flash sale.

But, ease can be a good thing which is why I am using points for my AP and not renting even though id need to rent fewer points than trade!