Depreciation Expense question ...

[gonegolfin]

Does anyone know where I can find depreciation expense figures (since 1999) for the Boardwalk Villas and Hilton Head Island DVC resorts? I need these figures to calculate capital gain/loss.

Thanks,
Brian

 

[Dean]

I wouldn't and I'm having trouble thinking why one would need them. The only way you could depreciate it that I can think of would be if you owned solely as a rental property. DVC has actually appreciated over time though that's on paper unless you sell.

 

[gonegolfin]

I wouldn't and I'm having trouble thinking why one would need them. The only way you could depreciate it that I can think of would be if you owned solely as a rental property. DVC has actually appreciated over time though that's on paper unless you sell.

Yes, thanks.

I originally thought that I had to subtract depreciation expense (taken on the property by Disney) from my cost basis. But the tax law refers to depreciation expense I took personally (which is none since this was for personal use and I did not rent it out). Thus, I can ignore this element of the calculation. I just need to collect the info on maintenance fees allocated to capital reserves, which I can obtain from my yearly DVC statements.

Even though DVC has appreciated in nominal dollars since I bought in '99 (sold all but one small contract in '06), I will still have a reasonably sized capital loss due to sales closing costs and maintenance fees allocated to capital reserves over the years. Of course, you cannot declare capital losses for dispositions of personal timeshares.

 

[ChesapeakeTechie]

Yes, thanks.

Even though DVC has appreciated in nominal dollars since I bought in '99 (sold all but one small contract in '06), I will still have a reasonably sized capital loss due to sales closing costs and maintenance fees allocated to capital reserves over the years. Of course, you cannot declare capital losses for dispositions of personal timeshares.

Is this for a personal tax return? I was under the impression that timeshares could not be treated as 'real property'? If it isn't being treated as a rental property where do the capital reserves come into play?

Thanks!

 

[CarolA]

Before you go down this road, contact your tax professional. (As a general rule when selling your home you cannot adjust the gain/loss for "maintenance" for example) You can only adjust for those items actually SPENT to improve your home. So if I set up a reserve to plan for my future A/C unit and don't buy one before I sell I don't get to adjust for the reserve. If I had done a capital improvement (New A/C) I might be able to adjust my basis. (It gets kind of complicated and don't quote me, I am NOT a tax professional. I paid someone to do my taxes last year because they were SO complicated! LOL!)

 

[gonegolfin]

Before you go down this road, contact your tax professional. (As a general rule when selling your home you cannot adjust the gain/loss for "maintenance" for example) You can only adjust for those items actually SPENT to improve your home. So if I set up a reserve to plan for my future A/C unit and don't buy one before I sell I don't get to adjust for the reserve. If I had done a capital improvement (New A/C) I might be able to adjust my basis. (It gets kind of complicated and don't quote me, I am NOT a tax professional. I paid someone to do my taxes last year because they were SO complicated! LOL!)

Thanks, but we are going to have to disagree. I believe in researching the tax law and doing it myself, rather than fund an industry that has exploded to ridiculous proportions. I am in the process of doing that now. It is not complicated if you take the time to do the research and read carefully. Besides, I have seen "tax professionals" really screw up personal tax returns.

 

[CarolA]

Thanks, but we are going to have to disagree. I believe in researching the tax law and doing it myself, rather than fund an industry that has exploded to ridiculous proportions. I am in the process of doing that now. It is not complicated if you take the time to do the research and read carefully. Besides, I have seen "tax professionals" really screw up personal tax returns.

Um.. I am worried you are "screwing Up your personal return" I just don't think you can adjust the basis for the capital reserve. However, I will leave you to the IRS.

 

[gonegolfin]

Is this for a personal tax return? I was under the impression that timeshares could not be treated as 'real property'? If it isn't being treated as a rental property where do the capital reserves come into play?

Thanks!

I have found a couple of papers that refer to the cost basis for personal-use timeshares as including any assessments or fees for capital improvements paid during ownership (not capital reserves as I originally alluded to). Of course, these items cannot be deducted, but thus far it looks like they can be used in the calculation of cost basis. I am still working on this.

Personal-use timeshare disposition losses cannot be deducted. As such, the resolution of the above is really immaterial as I will have a loss that cannot be deducted in either case. I just want to figure out the tax law myself.

 

[gonegolfin]

Um.. I am worried you are "screwing Up your personal return" I just don't think you can adjust the basis for the capital reserve. However, I will leave you to the IRS.

I am not screwing up my personal return. I have a capital loss that cannot be deducted however you slice it. As I said, I am still working on this and April is a long time away. I feel that people should take the time to solve things themselves rather than always punt to a professional. As a related example, I think that if people really took the time to understand how the monetary system works in this country, they would be appalled and change would be demanded. But people are extremely ignorant to this and this is why our monetary (as well as tax) systems are screwed up beyond repair.

 

[TheRustyScupper]

1) I will try to smuggle a file into a cake when you go to jail for tax fraud.
2) You are trying to take a deduction which is not allowed.

NOTE: I guess people have no problem trying to cheat on their taxes or even their golf score.

 

[gonegolfin]

1) I will try to smuggle a file into a cake when you go to jail for tax fraud.
2) You are trying to take a deduction which is not allowed.

NOTE: I guess people have no problem trying to cheat on their taxes or even their golf score.

Before you issue mindless accusations, maybe you need to reread what I stated. I am not taking any deductions. The only deduction I take with respect to DVC are property taxes (yearly).

This thread concerns the computation of adjusted cost basis for a disposition. I have already stated that whether capital improvements are included in that cost basis or not, I will still have a capital loss which cannot be deducted. In other words, this will have absolutely no impact on my taxes whatsoever. Do you comprehend? Now you tell me where the cheat is ...

 

[Doctor P]

Before you issue mindless accusations, maybe you need to reread what I stated. I am not taking any deductions. The only deduction I take with respect to DVC are property taxes (yearly).

This thread concerns the computation of adjusted cost basis for a disposition. I have already stated that whether capital improvements are included in that cost basis or not, I will still have a capital loss which cannot be deducted. In other words, this will have absolutely no impact on my taxes whatsoever. Do you comprehend? Now you tell me where the cheat is ...

Yes, but it seems like you might or might not know how to calculate capital improvements--documenting the portion that goes for capital improvements is not as easy as it may seem at first. You are on the right track, but an experienced tax professional is still your best bet (not just one out of the Yellow Pages, though, one that understands and has experience with timeshares).

 

[gonegolfin]

Yes, but it seems like you might or might not know how to calculate capital improvements--documenting the portion that goes for capital improvements is not as easy as it may seem at first. You are on the right track, but an experienced tax professional is still your best bet (not just one out of the Yellow Pages, though, one that understands and has experience with timeshares).

But I am willing to verify how it is done myself. Besides, even if I was not willing to do this myself, it makes no sense to pay a tax advisor when I can leave the capital improvements out of the cost basis and it will make no impact whatsoever on my tax return (I will still have a capital loss that I cannot deduct). Which I will do if need be.

 

[ChesapeakeTechie]

If anyone cares I can ask my tax advisor, she's a CPA, and she's mentioned the property tax deduction but said she would have to look at it since the property is out of state...
Thoughts on this matter?

 

[Doctor P]

But I am willing to verify how it is done myself. Besides, even if I was not willing to do this myself, it makes no sense to pay a tax advisor when I can leave the capital improvements out of the cost basis and it will make no impact whatsoever on my tax return (I will still have a capital loss that I cannot deduct). Which I will do if need be.

You will have a capital loss after only subtracting the closing costs from BWV and HH bought in 1999????? I'm amazed since the sales prices of BWV have been at least $20 above the 1999 direct purchase price and those for HH have been running roughly $8-10 above the direct purchase price. I'm not challenging you. I'm just amazed at a capital loss under those conditions.