Is taxable? Transferring points

[DianaMB333]

Hi.. I understand that renting out points imply taxable income...
how about the transfer amongst DVC members?
Or even between same DVC owner?
Thanks

 

[VWLforever]

If you transfer points for free, not a taxable event. If money changes hands, yes taxable. But of course taxability requires honesty, you'd have to report the income for the government to know that it occurred. Not like DVC or a transfer board where a listing was posted but not directly involved in the transfer is going to know or report that money changed hands.

 

[rcs]

Unless the no cost transfer is between spouses, there is a potential gift tax liability if the value of the points transferred exceeds the $14000 exemption amount. As the previous poster mentioned, to get caught, the government would need to know about it.

 

[drusba]

The federal tax laws consider your transfer to another of anything of value that you own for which you receive payment in return to be income for which taxes may be owed. Thus, transferring your points for dollars would be a taxable income event. If you just give points to others, it is not taxable as income. Any such gift of annual points is highly unlikely to result in any annual gift tax exemption to be exceeded. The annual gift tax emption is now $15,000 per person and you count each person in the transfer as a total exemption, e.g., give to a husband and wife and the total exemption is $30,000. Also there will be no gift tax liability even if you exceed that. There would be just a deduction from your life time exemption, currently $11.58 million, by the amount in excess of the annual exemption. The real problem with ever exceeding that $15,000 exemption per person is that you would have to file a gift tax return for the year even though you pay no tax, and the last thing on earth you ever want to do is sit down and try to prepare the federal gift tax return, an almost incomprehensible 4-page form that comes with 20 pages of incomprehensible, single space instructions.

Transferring points between your own accounts, from one use year to another, is neither a taxable income event nor something covered by the gift tax laws because you are simply transferring to yourself something you already have, i.e., it is just like transferring money from your bank savings account to your bank checking account..