Sold 3 contracts in 2020, explain it to Tax Accountant

[Tigger2ntinkerbell]

Hi, Last time we sold another contract in 2019 my tax accountant only put in the amount of the sale , but not the amount that the Broker charged us or Disney's fee.
How do I explain the to my accountant in every simple terms.
We sold 3 contract owning, but still received some money back even after paying the Broker their fees and then Disney's fee).
We might have to do long form this year. My accountant thinks timeshare are not "Real" Real state Property, how do I explain that it is.

 

[BillPA]

Get a real accountant, or do it your self.

 

[KAT4DISNEY]

That should be no different than selling anything else taxable. You pay on the gain from when you purchased and that also means deducting expenses. If your accountant doesn't know that well, um....I'd be looking for a different one.

 

[we"reofftoneverland]

You shouldn’t end up paying taxes on it if you deduct expenses

 

[cvjw]

You shouldn’t end up paying taxes on it if you deduct expenses

If you sold it for a lot more than you bought it for, taxes need to be paid.

OP, we use turbo tax and have sold multiple contracts. We have the turbo tax for investments, because we have to report loads of dividends and capital gains. We list the sale proceeds with the other investments. It has a place to insert the sale price and a place to deduct the commission and other fees.

Yes, our dvc contracts have impacted our taxes paid.

 

[Tigger2ntinkerbell]

If you sold it for a lot more than you bought it for, taxes need to be paid.

OP, we use turbo tax and have sold multiple contracts. We have the turbo tax for investments, because we have to report loads of dividends and capital gains. We list the sale proceeds with the other investments. It has a place to insert the sale price and a place to deduct the commission and other fees.

Yes, our dvc contracts have impacted our taxes paid.

No we didn't get what we paid for each contract.
Will look at turbo tax, thanks.

 

[KAT4DISNEY]

My accountant thinks timeshare are not "Real" Real state Property, how do I explain that it is.

For that - show them a copy of your deeds.

 

[supersnoop]

Don't get too mad at the accountant yet. She may have done it correctly.

You list the total sales price, but then adjust the basis for the contract; the original sales price plus capital investment from maintenance fees, plus brokerage fees from the sale. It should all have been in there somewhere. If you sold for less than you paid, it she may have ignored some of that. I'm not sure if you can deduct a loss on a timeshare.

 

[cvjw]

Don't get too mad at the accountant yet. She may have done it correctly.

You list the total sales price, but then adjust the basis for the contract; the original sales price plus capital investment from maintenance fees, plus brokerage fees from the sale. It should all have been in there somewhere. If you sold for less than you paid, it she may have ignored some of that. I'm not sure if you can deduct a loss on a timeshare.

We lost money on a couple of sales years ago. Turbo tax did not take the loss.

 

[LAX]

We lost money on a couple of sales years ago. Turbo tax did not take the loss.

That's interesting. It's deeded real estate. If one has to pay taxes when it's sold at a profit, why can't one take a deduction if it's sold at a loss?

LAX

 

[Katiebird]

That's interesting. It's deeded real estate. If one has to pay taxes when it's sold at a profit, why can't one take a deduction if it's sold at a loss?

LAX

It's personal property, so a loss is not deductible, same as if you sold a car at a loss.

 

[drusba]

The DVC timeshare is real estate. If you sell real estate that you owned for renting or investment, the loss from a sale can be deductible as part of of your overall capital losses to offset capital gains from investments. A loss from the sale of your home or vacation property, however, is, like the loss from the sale of personal property, not deductible for tax purposes (as to why, the answer is the same as all other tax rules: it is what the federal tax code provides).

If you actually make a profit from the sale of the timeshare, it will be income to you for tax purposes but as a capital gain which is taxed differently from regular income if the property has been owned for more than a year. In determining whether you have a gain from the sale of the DVC timeshare, you can deduct from your sales price the following (and all of these require documentary evidence to be able to prove them): (a) your original purchase price; (b) certain allowed closing-related costs you may have paid when you purchased, (c) certain allowed costs from your sale such as the brokers fee and some of the closing costs; (c) the capital reserves for capital improvements paid over the years as annual dues.

 

[dvc lover 1970]

No we didn't get what we paid for each contract.
Will look at turbo tax, thanks.

If you sold it for less than you paid or if you broke even after deducting broker fees and any fees as part of the sale then you should not owe anything. If you made a profit on the sale after broker fees and fees associated with the sale then that is taxable.

 

[Disneypapa]

Thanks for all the input and explanations. Good to know as I am likely to be selling my DVC in the near future.