ROFR Thread April to June 2024 *PLEASE SEE FIRST POST FOR INSTRUCTIONS & FORMATTING TOOL*

[jolynne28]

I’m sad that I wasted 10 minutes of my vacay listening to people bicker about point banking. I kept thinking I’d read the last of it, but nope it goes on for two pages! Can we move on and agree to disagree?
Fun trip note and more abbreviations: we decided to hit HS today around 11 based on nothing but wait times, find out park is closing at 5:30 for special event. We kicked that park’s butt: rode RoR and MMRR twice, TSM 3 times, and SR and ASW once, and did the Frozen Singalong. We are checked in at Poly, headed for a DW, then plan to hit MK for EEH.
Also, BPK is officially dead to me, we got stuck on the end by the stairs, sounded like drummers walking outside while we were trying to get to sleep. If we ever want to try VGF again we’ll stick with the OG villas.

 

[DonMacGregor]

DonMacGregor---$105-$9587-75-AUL-Dec-0/22, 0/23, 75/24, 75/25- passed 6/5

Finally.

Now I just need some helpful tips on banking my points...

 

[CastAStone]

DonMacGregor---$105-$9587-75-AUL-Dec-0/22, 0/23, 75/24, 75/25- passed 6/5

Finally.

Now I just need some helpful tips on banking my points...

I would bank the 2024 ones and borrow the 2025 ones, makes things far more exciting.

 

[DonMacGregor]

I would bank the 2024 ones and borrow the 2025 ones, makes things far more exciting.

Oooooooooooo

 

[Jimmy Geppetto]

I think that it could skew people’s perceptions when you post numbers that assume rented points without state or federal tax as part of the purchase price…..

It also means that you can’t use the points during those years….. which is the main reason people buy these contracts.

Oh yeah! That totally changes the math.

Canadians also have to factor the FIRPTA costs into their equation.

 

[FrancisK7]

Oh yeah! That totally changes the math.

Canadians also have to factor the FIRPTA costs into their equation.

Unless Im wrong I believe this only applies when selling a contract and it’s only withheld, then released, not a tax.

 

[I Run Long]

Unless Im wrong I believe this only applies when selling a contract and it’s only withheld, then released, not a tax.

That is correct if you are selling you need a FIRPTA. If you rent your points any income derived from the rental is taxable according to the CRA.

 

[FrancisK7]

Yes renting is definitely a taxable event in Canada. If renting through a US company like DVC Rental Store you also need an ITIN. You can bypass the ITIN requirement by renting through a swap program.

 

[Jimmy Geppetto]

Unless Im wrong I believe this only applies when selling a contract and it’s only withheld, then released, not a tax.

Correct. But filing comes with a cost (FIRPTA AGENT) and IRS is taking 12-15 months to process withholding certs. I assign a cost to that plus the lost interest while the IRS processes my cert.

As another poster said there is also tax filing fees for the income.

 

[Massachusetts]

Well, I'll give you a real life example for one of the contracts I bought. It's an AKV contract with 110 points. It has a june use year. I closed on it in February 2024. When I received the contract there were 110 banked points in the 2023 use year, 220 (110 banked) points in the 2024 use year, and 110 points in the 2025 use year, and 110 points in the 2026 use year. Now, those 110 points were expiring fast in 3 months, but I was able to get all of them rented out. So when I got it, it was triple loaded, there were 330 points I was immediately able to rent out before I take my first trip in 2025 with those points.

I got really deep into the boards today. Read a post saying it is in the DVC contract you cannot rent banked or borrowed points. It doesn't appear disney is enforcing this rule. I can't find on the post my phone. I believe it was it was a moderator. It made me pause. Especially after having read that local occupancy tax is the responsibility of the seller. Again no idea how well enforced. I was going to place at least 1 offer today and I decided against until I do further research.

 

[Sandisw]

Same. I've been wondering what in the world BPK is for days... finally decided to search around and figure it out. It's Big Pine Key... still slightly confused... I think it's part of VGF.

Yes, it is. BPK is the building that was added with the resort studios so we got to calling it that over VGF2…so people had an idea we were talking about the new sales that happened as DVD only sold deeds to that when it went back on sale!!

 

[Jimmy Geppetto]

I got really deep into the boards today. Read a post saying it is in the DVC contract you cannot rent banked or borrowed points. It doesn't appear disney is enforcing this rule. I can't find on the post my phone. I believe it was it was a moderator. It made me pause. Especially after having read that local occupancy tax is the responsibility of the seller. Again no idea how well enforced. I was going to place at least 1 offer today and I decided against until I do further research.

First I’ve heard of this but would be interesting if true. IMO they’d be better served if they started enforcing pool
Hopping and those who persistently check-out late.

 

[CastAStone]

I got really deep into the boards today. Read a post saying it is in the DVC contract you cannot rent banked or borrowed points. It doesn't appear disney is enforcing this rule. I can't find on the post my phone. I believe it was it was a moderator. It made me pause. Especially after having read that local occupancy tax is the responsibility of the seller. Again no idea how well enforced. I was going to place at least 1 offer today and I decided against until I do further research.

I just reread the POS . You can rent banked and borrowed points. You can’t, however, transfer them to another member for them to make themselves a reservation with.

 

[TheDailyMoo]

@DonMacGregor @FrancisK7 @aammtt20 @JackosinDIS
That was a spirited conversation and the only thing I could think the whole time was this scene from Clue:

and also this:

 

[Catou]

Correct. But filing comes with a cost (FIRPTA AGENT) and IRS is taking 12-15 months to process withholding certs. I assign a cost to that plus the lost interest while the IRS processes my cert.

As another poster said there is also tax filing fees for the income.

So selling your contracts is complicated, long and costly if you live in Canada?

 

[Jimmy Geppetto]

So selling your contracts is complicated, long and costly if you live in Canada?

No I wouldn’t say that. It’s still fairly simple just with added costs.

 

[FrancisK7]

So selling your contracts is complicated, long and costly if you live in Canada?

A 15% tax will be withheld for 12-15 months after the sale, and it costs I assume a few hundred bucks to file.

The upside is DVD doesn’t usually ROFR international contracts which is an added incentive for buyers who want a better chance of not getting taken.

So the major pro balances out the con I’d say.

 

[Jimmy Geppetto]

A 15% tax will be withheld for 12-15 months after the sale, and it costs I assume a few hundred bucks to file.

The upside is DVD doesn’t usually ROFR international contracts which is an added incentive for buyers who want a better chance of not getting taken.

So the major pro balances out the con I’d say.

Sorry but I disagree. When it comes to sell you will learn the following:

1. To your point, they want international seller to avoid ROFR… on a very low price per point.

2. Some US buyers are not comfortable buying from international sellers as the IRS places the tax owing requirement on the buyer not the seller.

3. Many brokers will advise international buyers not to buy from an international seller as the buyer will require an ITIN and they require a FIRPTA agent to buy.

There is certainly no advantage whatsoever.

I applaud your nice run up on buying points at some great deals but you may want to do some research on your exit strategy if you ever plan to sell.

 

[Mexacajun]

I think that it could skew people’s perceptions when you post numbers that assume rented points without state or federal tax as part of the purchase price…..

It also means that you can’t use the points during those years….. which is the main reason people buy these contracts.

What about taxes on magical beginnings?

 

[FrancisK7]

Man! My RIV contract is from an international seller and the broker said nothing about the ITIN or FIRTPA requirements. I cannot believe they earn 9% commission. Good thing I already requested my ITIN weeks ago for something else.

I did plan to exit on some contracts but not before 8 years at minimum so I didn't really make a lot of research about what selling entailed. I just knew about the 15% withholding tax because so many French Canadians are Florida snowbirds and I know many who have owned/sold condos.

Now that my acquisition dopamine rush has subsided I can start researching the far away end game.