DVC use as an employee benefit?

[wishiwasatdiz]

I am interested in purchasing DVC membership, either from Disney or reseller. My question: Can an incorporated business purchase the membership for use as an employee benefit/perk? I own a business with about 10 employees, most, like me, with young children. I can see that this would be a valuable asset/tool for the benefit/enjoyment of my employees. Any problems with that?

 

[Beca]

I've heard of others who recieve DVC visits as a "bonus" from their company. I think DVC does have a provision for "corporate ownership".



Beca

 

[minny1959]

you should try calling them at1-800-******** and talk to them the worst they can say is no or if you bought it yourself you can give your points to let someone use good luck

 

[JimMIA]

I am interested in purchasing DVC membership, either from Disney or reseller. My question: Can an incorporated business purchase the membership for use as an employee benefit/perk? I own a business with about 10 employees, most, like me, with young children. I can see that this would be a valuable asset/tool for the benefit/enjoyment of my employees. Any problems with that?

Yes, corporate ownerships are allowed, and I believe the maximum amount of points is higher for corporations than individual owners. DVC vacations are commonly used as employee perks. Your guide will be able to give you the details.

 

[abner1776]

I can't put my hand on it, but there is a provision in the member documents pertaining to corporate ownership and it is allowed with certain restrictions.

 

[brasey]

Are you hiring? LOL
Thats a nice perk for the employees. And I was happy with a turkey (more like a parakeet) at Thanksgiving. I am holding out this year!!!
For your employees sake good luck in buying in.

 

[bjennings]

Even if allowed, I would not be inclined to bring the DVC into the corporation.
I've thought of this myself and thought that I would rather buy the membership in my name (able to be handed down to my heirs) and rent the points to the corporation, as needed. That way, you control the flow of cash and don't have to worry about personal use issues.

 

[greenban]

I am interested in purchasing DVC membership, either from Disney or reseller. My question: Can an incorporated business purchase the membership for use as an employee benefit/perk? I own a business with about 10 employees, most, like me, with young children. I can see that this would be a valuable asset/tool for the benefit/enjoyment of my employees. Any problems with that?

This is how I purchased my points. I am constrained to the same number of points as other members, but each corporate identity is a seperate 'member' as would I be if I purchased in my name.

There are tremendous tax advantages to this for of ownership.

-Tony

 

[rascalmom]

This is how I purchased my points. I am constrained to the same number of points as other members, but each corporate identity is a seperate 'member' as would I be if I purchased in my name.

There are tremendous tax advantages to this for of ownership.

-Tony

Tony - can you elaborate? (Assuming you are not giving this as advice from a tax professional & that each individual's situation can be different & all that other cya stuff!)

Maybe I need to do some creative thinking here - dh controls a corporation. I am an employee. Don't you think I need a bonus?

 

[DebbieB]

This is how I purchased my points. I am constrained to the same number of points as other members, but each corporate identity is a seperate 'member' as would I be if I purchased in my name.

There are tremendous tax advantages to this for of ownership.

-Tony

Are there any tax implications for the employees who use it?

 

[shantay1008]

My DH was thinking about using DVC as a perk, too. One thing we wondered is how you would handle other expenses, like airfare, tickets, dining, etc.

 

[RobDoc]

Our DVC ownership is personally owned, but I have provided many trips for my staff over the years. Since our ownership is not corporate, there has been no requirement regarding including the perk as compensation for employees - it has always been a gift to the employee. My 13 employees have each had 3 WDW trips (some even got the free park passes too). I also have 3 employees who have worked for me for 30+ years that will be going on a 7 day cruise this fall with their spouses.

If ownership is corporate, where the expenses and purchase cost could be deductible, the vacations may be treated differently for tax purposes, since they may need to be treated as taxable compensation for the employees. It would be best to check with your tax advisor for specifics in those situations.

There are many possibilites for ownership. DVC has no prohibition for corporate ownership and the same point limitations do apply (2000 per resort/5000 total).

Just check with your tax professional before making any purchase decisions regarding corporate ownership.

 

[greenban]

I am not a Tax Professional, nor am I offering tax advice to anyone.

In my case, we had a big family get together in the summer of 2003. I took the DVC tour and decided to purchase for myself. I called on the 4th day and was not given the $79.00 price, so based on lurking on this board, I bid on a resale from TTS on an OKW contract.

I had some communications with my Accountant, regarding rewarding employees with a week at my DVC. After some back and forth discussions with my Accountant, he suggested that I purchase via one of my S corps. We deducted my transport down and back and my 1 day of lodging for the DVC sales visit, as this was my due diligence before purchasing.

I never thought to ask about employee liability for accepting a vacation for longevity. I will (after Tax season).

Many of my DVC costs are fully deductible as expenses to my corps, which since they are S-Corps (pass through) and save me approx 40%.

Hope this helps.

-Tony

 

[sajetto]

I had no idea one could by a corperate ownership interest. Oh BTW are you hiring??? LOL

 

[mikesmom]

DH is a tax professional. I asked him about this today. (Okay, i grilled him on why we didn't do this!). He said trips would have to be taxable to the employee and reported on the W-2. Also said with only 3 employees and 2 of them being us, "ordinary and necessary" would come into question. Who needs an audit, even if you win?

 

[Dean]

I am interested in purchasing DVC membership, either from Disney or reseller. My question: Can an incorporated business purchase the membership for use as an employee benefit/perk? I own a business with about 10 employees, most, like me, with young children. I can see that this would be a valuable asset/tool for the benefit/enjoyment of my employees. Any problems with that?

I'd think it would be no problem to purchase it. However, I think one would have to use it exclusively for the business and not for "personal use" at all to write off any portion of it. Buying for a small home business or anything akin to that to use essentially for family but write it off to the corporation would be illegal as I understand it. One would also have to adhere to the legal standards of the profession, it's be a big problem in the medical field as well as with many lobbyists.

 

[DisFlan]

DH is a tax professional. I asked him about this today. (Okay, i grilled him on why we didn't do this!). He said trips would have to be taxable to the employee and reported on the W-2. Also said with only 3 employees and 2 of them being us, "ordinary and necessary" would come into question. Who needs an audit, even if you win?

Audit is THE main reason why we didn't purchase DVC through my DH's Professional Corp. Our tax guy almost swallowed his pencil when we brought it up. We had the 2 of us and 5 other employees, but if you're not the size of GM or IBM, I guess it really raises the audit odds. (The IRS just LOVES to audit doctors with Professional Corps - any little thing seems to raise a flag. Voice of experience, here.) Plus, our employees flat-out said they liked their cash bonuses just fine.

And we didn't want the problems associated with retirement. If we want to keep enjoying our DVC after retirement, we'd have to get it OUT of the corp - with money. Not on my list of fun things to do.

DisFlan

 

[bjennings]

What happens if the corporation dissolves ? Can you buy your contracts back subject to ROFR ?

I also believe that employees would never be happy with this benefit when they realized they would be fully taxed on it. The employer would probably be stuck doing a "gross up" and the cost simply would not make sense. As previously stated, most employees would prefer the cash.

 

[DisFlan]

What happens if the corporation dissolves ? Can you buy your contracts back subject to ROFR ?

This was one of our concerns. This is what our tax guy/accountant said (our lawyer agreed with him) - "The corp is not YOU. The corp is the same as an individual in its own right. If YOU want the timeshare after the corp dissolves at retirement, it has to be bought by you from the corp at fair value and transferred to you." We didn't know how this would be handled by DVC re ROFR - or the complications and ultimate costs involved. (And who wants to, in effect, pay for the same points TWICE?)

So we didn't do it - we kept it simple and bought with "personal" money.


DisFlan

 

[fishermouse]

Lots of well intentioned advice here, however there are a lot of variables from one corp to another, state tax laws vary etc. Best bet would be to consult your tax advisor as well as your corp. lawyer. If this is considered a bonus, I'm sure it would be, it's taxable to employee. You can make it a bussiness trip have a meeting or two but then who is liable for any accidents during the trip? Things you need to check out.