Rental Income from DVC pts

[gryfoxmama]

When you receive money from renting out your DVC points - does it get claimed as income on your tax return? How do other members handle this.

 

[OKW Lover]

Disclaimer: You should consult your tax professional on all issues.

Layman's advice: Any income in taxable and should be declared on your return. You would also be entitled to claim related expenses, such as member fees. You may also be entitled to claim depreciation on your DVC property.

Oh, and I have no doubt that there are many DVC owners who do rent points but don't report the income.

 

[gryfoxmama]

thanks for your fast reply!!
Trying to decide whether it is worth buying more points and than possible needing to rent out some unused points.
I know commercial renting out of pts is prohibited. If I buy more points and than every couple years rent them and use cash for cruise....is there a cut off point where Disney says "not allowed"?

 

[Msmithmd]

Some have posted that DVC has sent warning cease and desist letters to members who have made over twenty rental reservations in a single year on their accounts. For most of us mere mortal members with less than a couple thousand points, it won't come into play.

That said, DVC is a poor investment. Buy only what you need, and invest your money elsewhere for better return and lower risk. One of the big risks is DVC stopping members' ability to make rental reservations altogether. Not saying that they will: simply that they could.

 

[DVC Doctor]

This issues pops up all the time and there and many different opinions out there

I simply say buy as many points as you plan to use and rent out any extra points or bank until next year. You can always rent points from another member if you are short one year. Sure some can make good money on rentals but can be a hassle and you may prefer to keep any investments in a traditional investment account.

 

[gryfoxmama]

Not intending to make money- would just like to break even Hate the thought of any extra points going unused. Just trying to think this all through.
I wish I could afford a couple thousand points!!!!

 

[Dean]

When you receive money from renting out your DVC points - does it get claimed as income on your tax return? How do other members handle this.

Regular income for the profit which is the rental price minus fees, advertising and any other direct expenses such as escrow holding. As noted, not worth it from an investment standpoint but it's nice to have the option if needed. As a rule, most people can stretch a points contract fairly far. You probably need to get past a yearly 20% deficit to really need to add on. There are MANY ways to supplement points such as taking advantage of Disney specials like free dining, transferring in an occasional group of points or renting distressed points for others. However, it is a good way to get an additional contract and have more options with the points you own.

 

[drusba]

thanks for your fast reply!!
Trying to decide whether it is worth buying more points and than possible needing to rent out some unused points.
I know commercial renting out of pts is prohibited. If I buy more points and than every couple years rent them and use cash for cruise....is there a cut off point where Disney says "not allowed"?

What you describe would not be an issue. Go here for the current quideline, a 20 reservation rule, that DVD applies to determine if you are violating the commercial activity rule:http://dvcnews.com/index.php?option=com_content&view=article&id=302