Interest tax deductible?

[christianweecare]

My DH & I are just beginning to investigate the pros and cons of DVC ownership. Your expert help will be appreciated! One question is this: If you finance your purchase, is the interest tax deductible, such as financing any other real estate? Thank you in advance for your response!

 

[Richyams]

Obviously, everyone's tax situation is different. You need to contact your preparer.

But...

In general, the interest is decuctable. A good way to finance is with a second mortgage on your home. The interest rate will be lower and it is obviously deductable. A loan from Disney is also going to be a real estate mortgage loan and will also be deductable. The portion of your dues that goes for the real estate taxes is also deductable. You get a statement telling you how much property tax you have paid with your dues.

Again, their are all kinds of restrictions, income limitations, number of homes you own, all these variables need to be addressed by your tax professional.

 

[eva]

Rich is right. You should make sure before taking the deduction. But if you take a loan through DVC in most cases the interest is tax deductible. If you take a loan other than through DVC or borrowing against a mortage then it probably is not. Personal loans are not deductible. Also, you may only claim a deduction on two properties. So if you only owe on a home and DVC it should be deductible. Remember the land taxes that are included in the maintance fee are usually deductible too.

 

[Richyams]

"Two Properties" is not entirely true. I own some rental properties, house, DVC. The "two property" thing means two personal homes. Even then, there is some leeway, for a while I owned two personal homes, DVC and rental property, staying completely within the bounds of the law, there are ways around the two property rule.

 

[ripleysmom]

As long as the loan is classified as a mortgage or a home equity loan, the interest should be tax deductible.

 

[christianweecare]

Thank you very much for your replies!