Sold 1 of our contracts, do we get any tax forms?

[ToodlesRN]

We sold one of our contracts last year and ready to file our taxes and just remembered about the sale. Do we get any tax forms about the sale in the mail? I tried to call the timeshare store but already closed. Thanks!!!

 

[pixie921]

We received a statement for our taxes at the time our sale closed. Then today, we also received an interest statement from DVC for 2009 dues we'd paid on that contract prior to selling.

 

[RobDoc]

Check your closing documents - they usually send the 1099 in that packet.

 

[ToodlesRN]

Just a quick update... no tax forms were in my closing documents, but yesterday I received a 1099-s form from DVC.

 

[BigTigger]

Just for some background, most real estate closings provide a HUD statement as a substitute for the 1099S as Doc notes above. Form 1099S is used to report gross proceeds from the sale or exchange of real estate and certain royalty payments. A 1099S form must be provided to the recipient and a copy mailed or e-filed to the IRS.

On your 2009 Federal tax return refer to the following from IRS Publication 523 as the 1099S was for a timeshare or vacation home: "The property would be considered a personal capital asset to you and the sale would be reportable on Federal Schedule D. A gain on this sale is reportable income. If you incurred a loss on the sale you are not allowed to deduct this loss since it is personal use property. For inherited property the asset would be considered investment property and the capital gain or loss would be reported on Schedule D".

Your basis for the DVC unit sold should be very close to the sale price per the 1099S adjusted for commissions and other closing costs paid. You can also make adjustments to the basis for dues paid on banked points not used before sale as a further cost adjustment in reporting the sale on your taxes. So for example, you paid (original basis) $8,000 for a 100 point BWV interest. You sold it for $82 a point or $8,200 gross proceeds per the 1099S. Your commission paid on the sale was $820 and you paid $70 in ROFR and estoppel fees. You have net proceeds that were less than your basis so you have no tax impact for schedule D (you can't deduct the loss where it's personal property).

I hope this helps explain how to handle this on your taxes!!

 

[Mamiamjo]

Just for some background, most real estate closings provide a HUD statement as a substitute for the 1099S as Doc notes above. Form 1099S is used to report gross proceeds from the sale or exchange of real estate and certain royalty payments. A 1099S form must be provided to the recipient and a copy mailed or e-filed to the IRS.

On your 2009 Federal tax return refer to the following from IRS Publication 523 as the 1099S was for a timeshare or vacation home: "The property would be considered a personal capital asset to you and the sale would be reportable on Federal Schedule D. A gain on this sale is reportable income. If you incurred a loss on the sale you are not allowed to deduct this loss since it is personal use property. For inherited property the asset would be considered investment property and the capital gain or loss would be reported on Schedule D".

Your basis for the DVC unit sold should be very close to the sale price per the 1099S adjusted for commissions and other closing costs paid. You can also make adjustments to the basis for dues paid on banked points not used before sale as a further cost adjustment in reporting the sale on your taxes. So for example, you paid (original basis) $8,000 for a 100 point BWV interest. You sold it for $82 a point or $8,200 gross proceeds per the 1099S. Your commission paid on the sale was $820 and you paid $70 in ROFR and estoppel fees. You have net proceeds that were less than your basis so you have no tax impact for schedule D (you can't deduct the loss where it's personal property).

I hope this helps explain how to handle this on your taxes!!

Thanks for your post as it answered a question that I have regarding taxes on sold DVC contract, but I do have another question.
When stating your original basis cost, is there anything that you need to submit saying that that's what you paid?
Is anything else included in the basis cost besides actual $ per point (like closing costs, taxes etc)?

Thanks,

 

[BigTigger]

If you buy from Disney, your original basis is most likely the net cost per point times the number of points you bought. So if your BWV purchase was $83 a point with a $3 a point incentive for a new cost per point of $80, you'd multiply that by the points bought (say 100 in this example) to establish an opening basis of $8000 ($80 x 100 pts.). Disney pays all closing costs, so you don't get that adjustment.

If you buy through a reseller and paid the same $80 a point for 100 points, but also paid $600 in closing costs (title cost, filing fees, tax stamps, etc.), your basis would be $8600 ($80 x 100=$8000 + $600 closing costs). Any dues adjustment would not be easy to support as deductible if you received points for the year dues was paid for.

Hope this example helps!!