Is renting out points worth it on your taxes?

Since I last posted I contacted the DVC Rental Store to get more info and a quote for a cruise swap. I got cruise prices directly from the RCI site first and I expected the DVCRS to qive me a quote based on those prices. However when I received the quote it was based on a much, much HIGHER amount for the cruise. I then emailed back to the "Swap Contact" person to question the pricing and what it's based on but got crickets in return. This was a big disappointment. I no longer trust the DVC Rental Store with my points. Ignoring me put a bad taste in my mouth and I feel they were trying to make more than just a few bucks off my points.

I have since started gathering prices for the cruise from other online cruise travel sites which all beat the DVCRS prices by a couple thousand dollars and also beat booking with RCI by a good chunk of change. I think if we move forward with booking this trip we will book with one of the online cruise broker sites and I will contact the former Disboard sponsor rental site to see if we can rent thru them instead and just accept there will be a 1099 to deal with the following year. The swap idea was very intriguing but not if it means they're jacking up the price significantly which would in turn require more of our points.

I appreciate everyone's input to my initial post. Looks like performing due diligence before doing anything is the key to finding the best deal.
I am a first time cruiser and they were the same price for the Disney cruise, I wasnt aware prices could be different. I only checked with Disney themselves.

They have one person for swaps and she took off a lot of time around christmas and the new year. So yeah their communication could be be better.

If the cruise is more money with them then you wouldnt save anything by not getting 1099'ed anyway.
 
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These companies are small enough that I suspect they simply don't care. If they get caught and actually punished it will be minor and they change the rules or it will be major where they go under but they made plenty of money over the years.
I was also talking about Interval International, RCI, and DVC themselves as well, who are not as small of companies but do not create taxable swaps with their systems either as far as I am aware.

So there seems to be something about these timeshare swaps that are not treated like a normal barter, rather than every single one of the smaller and larger companies committing and encouraging their members to commit tax evasion
One of the rental companies (wont name as dont remember for sure) wanted to the ability to rent a confirmed reservation for whatever they wanted but only gave you a fixed rate on the points. So you get the $19/point or whatever it was but they might sell it for $30/point instead.

If they want the ability to mark it up whatever then buy the inventory and hold it yourself. Only ever had to do that once because things change about a month out so just posted here and Facebook.
I'm confused as to what else you would have been expecting? This is how every DVC rental/swap company works, even DVC themselves. Do you think that they are only renting them out for enough for your payout or swap? Of course not, companies do not work for free. They will rent out the reservation/points for as much as they can get.

As for the rental companies buying points, holding reservations themselves, then renting them out, that would fall under commercial use which is against the rules in the DVC contracts themselves. So that is why they have to have members use their points instead and then rent out those reservations. It is a bit of a loophole.

(Note: there are some companies that allegedly still do buy points themselves and then rent them out, and if they are then they could be stopped at any moment as that is not allowed)
 
I am a first time cruiser and they were the same price for the Disney cruise, I wasnt aware prices could be different. I only checked with Disney themselves.

They have one person for swaps and she took off a lot of time around christmas and the new year. So yeah their communication could be be better.

If the cruise is more money with them then you wouldnt save anything by not getting 1099'ed anyway.
DCL may be more of an anomaly with prices but with RCI I have found prices all over the place. I have literally checked 6 different online sites. Some room categories match almost exactly with RCI and some cabins ranged from $6,693 to $7,381 for the same room. And refund policies vary from place to place if you cancel. Several have non-refundable deposits. I will only book a refundable room.

Comparing apples to apples booking a GTY cabin ranged from $5,903 to $6,622. The biggest discrepancy tho that made my mouth drop open I found with the DVC Rental Store. RCI's price on this one room was $7,681 and it was the same on Cruisesonly.com but the price from DVCRS was $10,966!!! A full $3,285 more. Was it a mis-quote? Who knows because she blew me off when I questioned it. But you definitely have to compare place to place.
 
I am a first time cruiser and they were the same price for the Disney cruise, I wasnt aware prices could be different. I only checked with Disney themselves.

They have one person for swaps and she took off a lot of time around christmas and the new year. So yeah their communication could be be better.

If the cruise is more money with them then you wouldnt save anything by not getting 1099'ed anyway.
Disney Cruise line is the anomaly in the cruise industry. The price for the DCL cruise will be the same no matter where you go, no one is allowed to discount the cruise fare. Unlike every other line where some travel agents will eat into their commissions to lower your cost because they do such high volumes, plus they can get special incentives and group rates from the cruiseline based on how much business they do. Now some TAs will provide you with OBC for DCL, or some other kinds of perks, but they cannot touch the cruise fare.
 

Disney Cruise line is the anomaly in the cruise industry. The price for the DCL cruise will be the same no matter where you go, no one is allowed to discount the cruise fare. Unlike every other line where some travel agents will eat into their commissions to lower your cost because they do such high volumes, plus they can get special incentives and group rates from the cruiseline based on how much business they do. Now some TAs will provide you with OBC for DCL, or some other kinds of perks, but they cannot touch the cruise fare.
Thanks! Glad I didn’t leave a bunch of money on the table!
 
None of us love paying taxes, especially when you feel the money is not managed to your liking, but how you feel about it doesn’t change the law.
I love paying taxes!
They pay for roads, schools, police, army, public transportation, the public health system and welfare. And more!
I think I get a good bargain, even if I don't agree how all of that is spent.
 
When you mention RCI are you meaning Resorts Condominiums International exchange company or are you meaning Royal Caribbean International?
I am talking about Royal Caribbean as I was looking into doing a "cruise swap" with the DVC Rental Store as they advertise no 1099's to go this route. Then I discovered through pricing the cruise at different sites that the Rental Store was apparently marking the price up before telling me how many points I'd need to rent out to cover it.
 
I love paying taxes!
They pay for roads, schools, police, army, public transportation, the public health system and welfare. And more!
I think I get a good bargain, even if I don't agree how all of that is spent.
Noted. I can’t discuss this more than saying there are sometimes very legitimate reasons someone may oppose how their taxes are being used, and I have some very legitimate concerns at the moment about how my tax dollars are being used contrary to my state’s interests that I cannot share without getting a warning or a ban. So this is the end of my conversation on the topic.
 
Ah! I thought you meant the timehsare exchange. Mea culpa, and thanks to @juliebee for asking!
Sorry. I may messed up on my abbreviations. I thought it was clear in my original post that I was looking to do a "cruise swap" with our points for a RC cruise.
 
No, you did not. it's just that two different things have the same abbreviation. RCI in my universe is "Resort Condominiums International" not "Royal Carribbean International." The confusion is that "my RCI" also sells cruises, but usually at an inflated price.
 
No that was the only things everything else I really was happy. I have never used a TA so Im not 100% on how it works but I know they are considered a full service TA but they just weren't helpful when it came to my booking and questions. But flip side if you really are more of a DIY trip planner anyway then no big deal.
This is good to know, it is one of my frustrations with dvcrs as a renter too. It takes a long time for them to get back to you at times, sometimes even days and theyre not very good at answering their phone either. I dont see why cruise swap would be any different and you just verified that suspicion!
 
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Since I last posted I contacted the DVC Rental Store to get more info and a quote for a cruise swap. I got cruise prices directly from the RCI site first and I expected the DVCRS to qive me a quote based on those prices. However when I received the quote it was based on a much, much HIGHER amount for the cruise. I then emailed back to the "Swap Contact" person to question the pricing and what it's based on but got crickets in return. This was a big disappointment. I no longer trust the DVC Rental Store with my points. Ignoring me put a bad taste in my mouth and I feel they were trying to make more than just a few bucks off my points.

I have since started gathering prices for the cruise from other online cruise travel sites which all beat the DVCRS prices by a couple thousand dollars and also beat booking with RCI by a good chunk of change. I think if we move forward with booking this trip we will book with one of the online cruise broker sites and I will contact the former Disboard sponsor rental site to see if we can rent thru them instead and just accept there will be a 1099 to deal with the following year. The swap idea was very intriguing but not if it means they're jacking up the price significantly which would in turn require more of our points.

I appreciate everyone's input to my initial post. Looks like performing due diligence before doing anything is the key to finding the best deal.
Did you question them on the higher amount? They might not be ignoring you, they take days to answer sometimes. As far as I know there is only one lady that answers the cruise swap emails and sets that up. I could only imagine how frustrating it would be to have them as my cruise TA. With dcl you have to call for a lot of things or at least I do. To add on celebrations, dining rotation requests, etc things come up. Sometimes Disney will talk to u on the phone, but most of the time they'll say your TA has to call. Very annoying to wait days for a simple request. On my most recent rental stay with them, my best friend was listed as the lead guest and not me when I was supposed to be. I called and emailed them and I got no answer until days after the trip.

It turned out not to be an issue except for the inconvenience of not being able to go directly to our room. My wife was also pissed our name wasnt on the TV but I told her thats not such a big deal but to her it was 🤣🤣

I will say that when I was interested in a universal studios hotel swap it was the exact price as the hotel website, but I thought it was false adversting in the sense that the amount of points they advertise what it could be is much lower than the actual price. We went in the low low season and the points were much higher than what they were advertising. I guess their strategy is to get someone interested and then they'll possibly book, but that backfired for me, I was really turned off by a much higher point swap than I expected based on what they said it could be.

I called them out on this and that was the end of that swap lol.
 
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The only thing I'm getting out of this is I'm going to be using the few excess points I do have to buy passes for my family instead of renting for cash to avoid Uncle Sam and also DVCRS is involved in tax fraud 😂
 
Did you question them on the higher amount? They might not be ignoring you, they take days to answer sometimes. As far as I know there is only one lady that answers the cruise swap emails and sets that up. I could only imagine how frustrating it would be to have them as my cruise TA. With dcl you have to call for a lot of things or at least I do. To add on celebrations, dining rotation requests, etc things come up. Sometimes Disney will talk to u on the phone, but most of the time they'll say your TA has to call. Very annoying to wait days for a simple request. On my most recent rental stay with them, my best friend was listed as the lead guest and not me when I was supposed to be. I called and emailed them and I got no answer until days after the trip.

It turned out not to be an issue except for the inconvenience of not being able to go directly to our room. My wife was also pissed our name wasnt on the TV but I told her thats not such a big deal but to her it was 🤣🤣

I will say that when I was interested in a universal studios hotel swap it was the exact price as the hotel website, but I thought it was false adversting in the sense that the amount of points they advertise what it could be is much lower than the actual price. We went in the low low season and the points were much higher than what they were advertising. I guess their strategy is to get someone interested and then they'll possibly book, but that backfired for me, I was really turned off by a much higher point swap than I expected based on what they said it could be.

I called them out on this and that was the end of that swap lol.

Universal Stufios uses dynamic pricing and it can change daily.

I wouldn’t assume that they purposely advertised a lower rate…these things can change quickly.

The cruise line pricing is the same…it can be a different price every day!
 
Back to the question around taxes on a barter transaction, if we skip to the bottom line: Only the profit from a barter transaction is taxable, right? So what is the profit from a vacation trade? I would think it is zero - you are trading points that are worth x for a vacation that is worth the same, no profit, no tax due for the end users. Any difference in value would stay with DVCRS, as their fee/profit for coordinating the barter. And they would pay any taxes due on that part of it so uncle Sam still gets theirs. (this was one of those middle of the night revaluations so maybe I am way off. lol)
 
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I'm pretty sure you can't use "current value" as the costs to deduct against revenue if you were to rent them---you'd have to use your actual costs. I am not sure why that would be different if it were barter instead of cash.

IANA(T)L.
 
Back to the question around taxes on a barter transaction, if we skip to the bottom line: Only the profit from a barter transaction is taxable, right? So what is the profit from a vacation trade? I would think it is zero - you are trading points that are worth x for a vacation that is worth the same, no profit, no tax due for the end users. Any difference in value would stay with DVCRS, as their fee/profit for coordinating the barter. And they would pay any taxes due on that part of it so uncle Sam still gets theirs. (this was one of those middle of the night revaluations so may I am way off. lol)
Unfortunately, no … the IRS is clear, you have to declare the full value of what you receive. Then you can go ahead and off set it with any allowed expenses. They don’t allow you to “do the math” and report the difference. If you use a broker/barter network then it’s a 1099-B [the B is for Barter] and both parties report the transaction as income, then individually (obviously) each party uses their allowable expenses to reduce the tax liability. If you treat the transaction as a “sale-purchase” then it’s a 1099-MISC for rental income. Two different forms, ultimately same objective.
 
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I'm pretty sure you can't use "current value" as the costs to deduct against revenue if you were to rent them---you'd have to use your actual costs. I am not sure why that would be different if it were barter instead of cash.

IANA(T)L.
Makes sense, the tax man looking to get a piece of the gains between cost basis and current value.

Unfortunately, no … the IRS is clear, you have to declare the full value of what you receive. Then you can go ahead and off set it with any allowed expenses. They don’t allow you to “do the math” and report the difference. If you use a broker/barter network then it’s a 1099-B [the B is for Barter] and both parties report the transaction as income, then individually (obviously) each party uses their allowable expenses to reduce the tax liability. If you treat the transaction as a “sale-purchase” then it’s a 1099-MISC for rental income. Two different forms, ultimately same objective.
Thanks, never had to think about the details of barter transactions, its complicated...of course.
 











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