DVC sale and income tax question

[Laura24]

We recently sold one of our DVC contracts. How should we be handling the sale of the contract for our tax purposes when we get them done? Is there a form I need that hasn't already been sent in by TSS? Do you account for the costs in dues over the years when filing? Obviously our purchase price was greater than the sell price, just haven't had any experience in this process. I want to be prepared when we do file. Really appreciate any advice.

 

[drusba]

This goes into the category of capital gain or loss. There are federal tax forms for that (I think it is Schedule D and form 8949). If you sold it for less than you paid for it, you likely have a loss (not deductible) and not a capital gain and will not owe any taxes but you need to do the proper calculations. Documents needed to calculate will include your sale and closing documents for the current sale, and the same for the original purchase. What you paid in dues over the years has no impact on whether you have a gain or loss.

 

[johde]

I am not a tax accountant so don't consider this as being direct tax advice. Selling DVC would be handled the same as selling your home. Since you have a capital loss, you don't need to do anything with the dues you paid. If you had a gain, depending on how much you want to push the rules, you could claim that a portion of your dues were "improvements" that should be added to your cost basis but the numbers would be difficult to figure out.

http://www.redweek.com/resources/articles/tax-aspects-selling-timeshare explains things fairly well.

 

[Laura24]

The capital gains and loss makes complete sense. Greatly appreciate the information.

 

[Scotch]

I thought you only report on taxes if you had a gain on sale of a timeshare. If a loss, no report at all.

 

[johde]

What I saw recommended reporting the loss on your taxes if you got a 1099-S. That way the IRS has something on your tax return to match with the paperwork they received from the sale. It's probably not completely necessary but may avoid problems later.

 

[twoj]

I am not sure you need to report it, we don't technically own if it reverts back to disney, right? All of the contracts have an expiration date.

 

[Brian Noble]

Here is another solid article on taxes and timesharing.

http://www.tug2.net/timeshare_advice/TUG_Taxes_and_Timeshares.html

 

[hollypoast]

It would be great to hear from someone who went through the process… sold and then completed taxes to learn from their experience.

 

[E2ME2]

Here is another solid article on taxes and timesharing.

http://www.tug2.net/timeshare_advice/TUG_Taxes_and_Timeshares.html

Brian -
I pulled this thread out of the "way back" machine to ask you this:
(If I read all the articles correctly) - If I sell my DVC for the exact price that I paid for it, is that considered a "wash" from a capital gains perspective ?
Would I simply report the income at X$ from the 1099-S, and then offset that same amount of X$ somewhere else as an expense ?
How & Where do I report the expenses ???
(My first-time selling)

 

[davidhr]

Brian -
I pulled this thread out of the "way back" machine to ask you this:
(If I read all the articles correctly) - If I sell my DVC for the exact price that I paid for it, is that considered a "wash" from a capital gains perspective ?
Would I simply report the income at X$ from the 1099-S, and then offset that same amount of X$ somewhere else as an expense ?
How & Where do I report the expenses ???
(My first-time selling)

Not a tax expert, but sold last year. It’s reported on schedule D. Just added a line with the description and the sale amount. Then put the same amount as cost (to not report a loss) as I didn’t have gains from the sale.

 

[drusba]

Brian -
I pulled this thread out of the "way back" machine to ask you this:
(If I read all the articles correctly) - If I sell my DVC for the exact price that I paid for it, is that considered a "wash" from a capital gains perspective ?
Would I simply report the income at X$ from the 1099-S, and then offset that same amount of X$ somewhere else as an expense ?
How & Where do I report the expenses ???
(My first-time selling)

Selling for same price for which you purchased it would mean there is no capital gain. You do need to report the 1099-S form. Mentioned above is a belief you need not report anything if you have no gain for a sale. If you get a 1099-S you should report it because the government has that form and if you do not account for it in your tax return, it is likely to come after you later. Since the 1099-S form simply shows you received the amount of the sale and mentions nothing about your original purchase price, the forms you use to attach to your tax return to show your sale and no gain are Schedule D to which you attach form 8949.

 

[E2ME2]

Selling for same price for which you purchased it would mean there is no capital gain. You do need to report the 1099-S form. Mentioned above is a belief you need not report anything if you have no gain for a sale. If you get a 1099-S you should report it because the government has that form and if you do not account for it in your tax return, it is likely to come after you later. Since the 1099-S form simply shows you received the amount of the sale and mentions nothing about your original purchase price, the forms you use to attach to your tax return to show your sale and no gain are Schedule D to which you attach form 8949.

Awesome Sauce -
Thank you so much!

 

[E2ME2]

Not a tax expert, but sold last year. It’s reported on schedule D. Just added a line with the description and the sale amount. Then put the same amount as cost (to not report a loss) as I didn’t have gains from the sale.

THANKS!

 

[gharter]

Not a tax expert, but sold last year. It’s reported on schedule D. Just added a line with the description and the sale amount. Then put the same amount as cost (to not report a loss) as I didn’t have gains from the sale.

That's how our accountant handled it when we sold a contract. It went on Schedule D as a capital gain or loss.