Renting out DVC points.

[Nagle]

We are considering renting out some or all of our DVC points this year and next. Looking for some info and feedback about using the rental companies that deal specifically with Disney properties.

By renting out our points, does that mean we have to file any taxes in the USA?
How easy is it to deal with the various companies?
Is David’s a clear favourite?
Any info greatly appreciated.

Nagle

 

[eticketplease]

We are considering renting out some or all of our DVC points this year and next. Looking for some info and feedback about using the rental companies that deal specifically with Disney properties.

By renting out our points, does that mean we have to file any taxes in the USA?
How easy is it to deal with the various companies?
Is David’s a clear favourite?
Any info greatly appreciated.

Nagle

First, I want to start off by saying I’m not a Canadian so I don’t know all of your rules.

US residents have to file taxes because it is considered income for us. I don’t think you would have to file anything for US since this would not be US income but Canadian income since that is where you reside.

I have used David’s before and they did not send us US tax documents but perhaps they will send Canadian ones. We had to manually track the income to report for our taxes.

I will say the David’s process was extremely easy and it also paid more for us than the DVC rental store did. That could certainly change from time to time but if I was in the situation where I needed to rent points out again I would most likely return to David’s.

 

[kittyab]

We used Dave's. Very easy.

 

[Fellowship9798]

Another nice feature of David's for the group on this board is that the company is located in Canada in Ontario..

 

[lanejudy]

I don’t think you would have to file anything for US since this would not be US income but Canadian income since that is where you reside.

If the property is within the US, the rental income is US-sourced income and taxable in the US.

 

[bcwife76]

We have used Davids rentals a few times to rent our points, they are super easy to work with and extremely helpful if you run into issues. They pay you via PayPal in US $'s but no, we have never claimed it on our CDN income tax

 

[eticketplease]

If the property is within the US, the rental income is US-sourced income and taxable in the US.

Good to know although I'm not sure how the IRS would track down someone that doesn't have a SSN and David's themselves are a Canadian company and don't provide a 1099 for US taxes.

I know if someone international was selling their contract they would have to get a FIRPTA form filled out but that is for selling the contract not renting.

 

[lanejudy]

Good to know although I'm not sure how the IRS would track down someone that doesn't have a SSN and David's themselves are a Canadian company and don't provide a 1099 for US taxes.

I know if someone international was selling their contract they would have to get a FIRPTA form filled out but that is for selling the contract not renting.

I was simply correcting you that the rental income is definitely considered US income regardless of where the renter lives -- because you had stated it wouldn't be US income if the renter resides in Canada. (And for the record the reverse is true as well -- if a US resident owns property in Canada and rents it out they owe Canadian income tax.)

Not receiving (or not being issued) a 1099 does not make something non-taxable in the US. As a PP stated, it's on the individual to keep track.

As for whether or not the IRS might track down someone who doesn't report is a decision the individual must make. That decision should be based on accurate information and not based on inaccurate assumptions of the tax laws.

 

[eticketplease]

I was simply correcting you that the rental income is definitely considered US income regardless of where the renter lives -- because you had stated it wouldn't be US income if the renter resides in Canada. (And for the record the reverse is true as well -- if a US resident owns property in Canada and rents it out they owe Canadian income tax.)

I stated previously that I wasn't sure of all of the rules so thank you for clarifying this.

Not receiving (or not being issued) a 1099 does not make something non-taxable in the US. As a PP stated, it's on the individual to keep track.

Not sure where you are seeing this unless you are referencing my post?

I have used David’s before and they did not send us US tax documents but perhaps they will send Canadian ones. We had to manually track the income to report for our taxes.

As for whether or not the IRS might track down someone who doesn't report is a decision the individual must make. That decision should be based on accurate information and not based on inaccurate assumptions of the tax laws.

Agreed but I still don't think the IRS is going after an international owner who rents out a few points every so often but yes the OP should follow the tax laws of both countries in this case.

 

[mort1331]

As a Canadian who has rented excess points for some time.. I started with Daves , but now I just use these boards. I am able to work directly with the renters, and receive more per point then what Daves offers owners.
For taxes, its up to you how you want to handle that. Check with your accountant. In Canada we can not right off interest or anything related to timeshare.