Need to pay taxes on your referrals to DVC

[Ed T]

I had three referrals to DVC in 2001 and today received a Misc Income 1099 form for the Disney Dollars they gave me for the referral rewards.
While it is nice that Disney asks you to share in the magic they don't openly tell you that you will be taxed on these rewards. Has anyone else received their Misc 1099's. Do you still get a tax form if you take the referral towards your dues instead of getting Disney dollars?

Ed

 

[Regina]

Are you kidding me???

And what exactly are you supposed to pay the tax portion with, pressed pennies??

Some things are beyond comprehension.

 

[SINK]

Well, in order for DVD to deduct the "referral expense" paid, they would need to issue a 1099 MISC (it's the rule from IRS and not DVD). Please write to your congressmen to change the tax rules.

 

[Regina]

I understand that it must be a legality, but I never saw where you declare Mickey Money on a tax form.

 

[PamOKW]

Hadn't thought about it but it makes sense that you would be required to include it income. When a bank gives you a set of glasses for opening a checking account they usually also issue a tax form for the value of the glasses. Nothing is "tax free".

 

[buckylarue]

Guess I should feel lucky that our Attorney Generals in Minnesota have seen fit to protect us from this bother by not letting us get any referral rewards, huh?

 

[SINK]

Bucky: Unless the "bonus" is taxed at 100% or above, its always nice to get extra income if you did not have to work on it.

Regina: The mickey mouse income goes on line 21 of your 2001 form 1040. Or for those who treat DVC as investments, please add it to your Schedule E. However, for those who split their "referral bonus", they could deduct the amount paid to the referralee (provided they furnish them a 1099 Misc) , then I would just add the deduction right on line 21 as a negative amount (do not reduce the amount reported on the 1099 issued by DVD, or you will get an adjustment notice from IRS).

Example: DVD provided $200 in referral bonus to you, and you split it with the person that became a DVC member half/half. What you should do on your 2001 tax return is to report the entire $200 on line 21 as mickey mouse referral income, and report <$100> on line 21 as contra mickey mouse referral income "kick-back" to the purchaser.

 

[Terry S]

Regina.... I just can't stop laughing about the pressed penny comment. Thanks for the laugh!

 

[ripleysmom]

Actually I thought that it did not need to be reported if it was under $600.

 

[SINK]

$600 rule is correct, but there are various exceptions to the rule and I'm no 1099 specialist. The best answer to any tax questions is "It depends".

 

[dwg]

The $600 rule applies to rents or services paid in the course of a trade or business. The rule only applies to whether or not the 1099 is required to be issued. It does not exempt the income from being reported on your tax return.

In any case, I do not believe that the $600 rule regarding issuing the 1099 form applies to award payments which is what this would be.

 

[HarrietSLP]

Originally posted by Terry S
Regina.... I just can't stop laughing about the pressed penny comment. Thanks for the laugh!

DITTO! My dd wanted to know what I was laughing about at the computer. Thanks for the chuckle

HARRIET
DVC Member '96 Vero & OKW
Next trip: DVC 10th Anniversary Cruise 4/7-4/11
Grand Floridian 4/11

 

[eva]

We've made a number of referrals, but never received over $600 in a year. DVC has never sent us a 1099. Now we didn't make any this past year. Maybe this is something new they are doing. I always thought of the Disney Dollars as a gift. And I thought you only had to claim gifts over a certain amount.

 

[Towncrier]

Ed - If you want to send me the referral money, I'd be more than happy to pay taxes on it.

Slightly off-topic, but I am expecting a similar piece of paper from Disney due to my 5 trips to the hot seat at the WWTBAM attraction in 2001. The shirts/pins/hats/lanyards all have a cash value, and I am certain that I have exceeded the IRS allowance for gifts of this nature. I suppose that I could always argue that there were certain expenses involved in getting into the parks.

BTW - We don't have the referral problem here in Ohio. DVC can't give us anything but a pat on the back and a hearty "thank you" whenever we refer new members. And so far the IRS hasn't figured out a way to tax that.

 

[CarolMN]

There's a thread over on RADP that is complaining about the taxes owed on a WWTBAM 32,000 win. Now I will not feel so bad if I don't get into the hotseat on my next trip. Disney T-shirts, pins and caps are great, but I don't want to pay taxes on the MSRP. According to the poster, the value of his 32,000 win was $960! OUCH! is all I can say.

Here's a link to the thread for those of you who want to read it:

http://groups.google.com/groups?hl=...ey.parks&start=25&group=rec.arts.disney.parks

 

[SINK]

You can always "write-down" the MSRP price tag on your return, just as long as you have reasonable basis for doing so. For instance, if you found that the T-shirt was actually being sold at a discount (or with your AP/DC discount) you can write-down the price. Again, the caution here is report the entire amount shown on the 1099 and go ahead and add another line item and input the negative (subtraction from other taxable income) amount on the other income line. If you just reported the net amount, the IRS will send a correction notice and bill you for the excluded amount (computer generated). The IRS computer system automatically compares the W-2 and 1099's, and will generate an adjustment to tax if the amount you have reported is different from their file.

 

[disneyberry]

[size=+0]I know this is a really old thread from 3 years ago. But I thought I would bump this up to ask if anyone has had recent experience with having to report your DVC referral bonuses on tax returns?

We had one family buy DVC in 2004, and we got the $200 referral bonus, but we applied that towards our 2005 Dues (it showed up on our Dues Statements in Jan).

Since I'm still trying to finish up our tax return, this was on my mind. So any related info anyone can share would be helpful! I just wasn't sure if this was the case anymore, and if it's still true, I have no idea whether I'm supposed to report our bonus in the 2004 Tax Year or 2005 Tax Year. [/size]

 

[Coach Rick]

Well at least you got yours. I sent my voucher in over a month ago, and have seen nothing. Having just returned I could have used it while I was there.

 

[CarolMN]

Guess I should feel lucky that our Attorney Generals in Minnesota have seen fit to protect us from this bother by not letting us get any referral rewards, huh?

Well they don't protect us from being taxed on Mickey prizes!

I got a 1099 when I won at an intermediate level prize on Millionaire. Had to pay taxes on the shirt, hat and pins. Boy was I surprised at how much they said they cost. As excited as I was to win (still wish it was the top prize, though, LOL), I probably would have refused the items had I known how much they'd end up costing me (in extra taxes). I'm not much of a pin person, the shirt was too big (took the smallest they had) and DhHwon't wear either the shirt or the hat. I don't wear baseball caps myself.

Anyway, that sounds like a whine - it really wasn't meant to be one. I did know at the time I was going to have to pay taxes on the prizes. In fact, now that I think about it, they might have given me the 1099 with the stuff!

Best wishes -

 

[LAWalz23]

How long does it take to get the voucher, referred my mom in Jan of this year and they already paid the down payment? How long after sending in the voucher do you get the Mickey money?