VGC Dues/"reserves" for 2011-2013

[AlpacaLips]

I'm hoping someone will be nice enough to look at their old Grand Californian statements or annual reports to tell me the percentage of Grand Californian dues in 2011, 2012, and 2013 that were applied toward reserves. (I sold a contract last year for a profit, and my understanding is that the "reserves" portion of dues are tax-deductible.) Unforutnately, I don't have documents for these years, and while Disney can provide them, they have not responded in a timely manner and I'm working under a deadline.

To clarify, I'm not looking for the total dues percentage (which are easy to find online); I'm looking specifically for the "reserves" line item for those years. This can be found both on individual annual statements, and in the general annual report for Disney's Grand Californian that DVC sends out to members each year.

If you can help me out with this, I'd really appreciate it.

 

[Genie+]

This might point you in the right direction

https://dvcnews.com/dvc-program-menu/financial/full-resort-budgets/2139-2012-resort-budgets

https://dvcnews.com/dvc-program-menu/financial/full-resort-budgets

 

[AlpacaLips]

Thanks! This is close to what I need, but not quite.

By comparing the "budget" capital reserve numbers with those that I have data for (years other than 2011-2013), it appears that the line items reported are not always the same as the amounts actually charged to members in their dues. I suspect that the budgets are prospective--what is expected to be charged to members--and they are subject to adjustment before the annual assessments go out.

So if anyone has the data from their Grand Californian annual statements or reports for 2011-2013, I'd sure appreciate it.

 

[tjkraz]

Thanks! This is close to what I need, but not quite.

By comparing the "budget" capital reserve numbers with those that I have data for (years other than 2011-2013), it appears that the line items reported are not always the same as the amounts actually charged to members in their dues. I suspect that the budgets are prospective--what is expected to be charged to members--and they are subject to adjustment before the annual assessments go out.

Only ad valorem taxes are adjusted after the fact. Operating costs and capital reserves are billed to owners at the precise amounts set in the proposed budgets mailed each November.

 

[AlpacaLips]

Only ad valorem taxes are adjusted after the fact. Operating costs and capital reserves are billed to owners at the precise amounts set in the proposed budgets mailed each November.

Then the numbers on these websites must be in error, because for the years that I have my statements, they don't match.

 

[AstroBlasters]

Why would reserves be tax deductible? That doesn’t make a lot of sense to me.

 

[VGCgroupie]

Why would reserves be tax deductible? That doesn’t make a lot of sense to me.

Was interesting news to me. Following along.

 

[VGCgroupie]

OP you should edit your title to say VGC instead of DGC so owners know you are talking about The Grand it may get more eyes on your post.

 

[AstroBlasters]

Was interesting news to me. Following along.

Reserves is just normal upkeep and maintenance, which would generally not be considered tax deductible.

 

[Genie+]

I remember reading a tax article that mentioned something like this… maybe on TUG?

Ahh it was Redweek
https://www.redweek.com/resources/articles/tax-aspects-selling-timeshare

 

[Brian Noble]

Why would reserves be tax deductible?

I think capital reserves contribute to the cost basis when it comes time to sell. Sort of like if you renovate your kitchen, and later sell your home, the renovation costs count towards the cost basis.

And that's consistent with that redweek article, which looks like it was just cribbed from TUG's DaveM:
https://tug2.net/timeshare_advice/income_taxes_and_timeshares_from_an_accountant.html

 

[AlpacaLips]

Why would reserves be tax deductible? That doesn’t make a lot of sense to me.

It's no less sensible than the tax rule that says you have to pay taxes when you sell your contract for a profit, but you don't get to write off a loss if you lose money. There's nothing about the tax code that makes sense.

 

[AlpacaLips]

I think capital reserves contribute to the cost basis when it comes time to sell. Sort of like if you renovate your kitchen, and later sell your home, the renovation costs count towards the cost basis.

And that's consistent with that redweek article, which looks like it was just cribbed from TUG's DaveM:

Bingo.

 

[AlpacaLips]

Reserves is just normal upkeep and maintenance, which would generally not be considered tax deductible.

False. On the annual statement, the assessment we pay for maintenance is a separate line item.

 

[AstroBlasters]

It's no less sensible than the tax rule that says you have to pay taxes when you sell your contract for a profit, but you don't get to write off a loss if you lose money. There's nothing about the tax code that makes sense.

If you sell your home, you have to pay tax on the gain (less an exclusion) and you can add capital improvements to the basis (put in a yard, built a 2nd story, solar panels, etc.) but you can not deduct maintenance (replacing roof, replacing water heater, new flooring, new appliances, paint, etc.).

That’s why I don’t understand why people think you can do it for a timeshare…

 

[AstroBlasters]

False. On the annual statement, the assessment we pay for maintenance is a separate line item.

But isn’t capital reserves just for future maintenance?

 

[AlpacaLips]

But isn’t capital reserves just for future maintenance?

I don't pretend to understand it. I'm just acting on what I've read. I've been paying taxes for 40 years and I learned a long time ago that when it doesn't make sense, I don't even blink. Making sense isn't even part of the discussion for the lawmakers and the IRS.

 

[AstroBlasters]

I don't pretend to understand it. I'm just acting on what I've read. I've been paying taxes for 40 years and I learned a long time ago that when it doesn't make sense, I don't even blink. Making sense isn't even part of the discussion for the lawmakers and the IRS.

I understand. But I have had training in personal taxes and estate taxes as part of my job and one of the takeaways from a particular class was “the IRS doesn’t like to pay for people’s vacations” and they proceeded to show us many ways that people try to use “aggressive accounting” to deduct travel expenses or vacation property and then showed cases in tax court where that didn’t work out for people when they get hit with back taxes and penalties.

I also know there are a lot of exclusions and private letter rulings in ambiguous areas and so never assume that I know the answer.

 

[AlpacaLips]

I understand. But I have had training in personal taxes and estate taxes as part of my job and one of the takeaways from a particular class was “the IRS doesn’t like to pay for people’s vacations” and they proceeded to show us many ways that people try to use “aggressive accounting” to deduct travel expenses or vacation property and then showed cases in tax court where that didn’t work out for people when they get hit with back taxes and penalties.

I also know there are a lot of exclusions and private letter rulings in ambiguous areas and so never assume that I know the answer.

Noted, and that makes sense to me. Bottom line is that since I'm at a point in my life where my time is worth more than my money, this is ultimately going to get handed over to a tax professional for the chips to fall where they may.

(Unless it turns out to be impossible to gather the data I need, in which case I'll probalby just forget about it. This is maybe a $200 question at the end of the day so I'm not going to get too worked up about it either way.)

 

[Brian Noble]

you can not deduct maintenance (replacing roof, replacing water heater, new flooring, new appliances, paint, etc.).

Some of these do appear to increase the cost basis.

https://www.irs.gov/pub/irs-pdf/p523.pdf