Sold DVC and have tax question...

[Rellim]

We sold our DVC points recently (used the Timeshare Store and it was great) and we received a 1099-s form for our records and for tax prep, but I have a question to anyone who has gone through this. The 1099 form shows our GROSS proceeds as $11700, but we still owed on the loan and didn't actually get that much back. How does this effect our taxes for the coming year?

Thanks!

 

[Terry S]

I am not a tax account but when I sold my DVC the number they looked at was the difference between your purchase price and your sold price. It has nothing to do with what you owed. If you made a profit from your original purchase price that is what needs to be reported.

 

[jlewisinsyr]

I am not a tax account but when I sold my DVC the number they looked at was the difference between your purchase price and your sold price. It has nothing to do with what you owed. If you made a profit from your original purchase price that is what needs to be reported.

Correct statement. Taxes look at gain, so sale price minus original purchase price, if the number is positive, then you have gain, if not then no issue.

 

[JimC]

Consider it a sale of real property, just like your home. The adjusted sales price less adjusted purchase price will either be a gain (taxable) or loss (no benefit for tax purposes). The adjustments above are closing costs and commissions paid, if any to buy or sell. You should list it either way because the IRS computer system will be looking for match it to the 1099 issued.

 

[DisneyWalker44]

You should list it either way because the IRS computer system will be looking for match it to the 1099 issued.

Let me emphasize this! I got audited a few years ago in a similar situation. I had a transaction with a loss, so I didn't bother to figure out how to report it. But because a 1099 had been issued with the sale price, the IRS flagged that as unreported income. Bad.

For the record - my IRS agent was incredibly nice and helpful, not anything like you picture an audit to be like. Still, you don't want to go through it! Report both the income and the loss.

 

[jjk1107]

I have a question I am hoping someone might the answer for. If we sell the points and we get a gain because of the price we sell at versus the price we paid, do we get to account for the fact that we paid annual dues and interest on the amounts?? I guess the interest is a no because we got to deduct for that on the taxes, but the dues, we only got to deduct for the property tax portion of it.

Thanks in advance.

 

[jlewisinsyr]

I have a question I am hoping someone might the answer for. If we sell the points and we get a gain because of the price we sell at versus the price we paid, do we get to account for the fact that we paid annual dues and interest on the amounts?? I guess the interest is a no because we got to deduct for that on the taxes, but the dues, we only got to deduct for the property tax portion of it.

Thanks in advance.

Expenditures that are related to your personal use of a timeshare (even if you don't use it) are not not deductible, with the exception of property taxes and cannot be included in your cost of the timeshare for calculating gain or loss on sale.

 

[CarolMN]

I have a question I am hoping someone might the answer for. If we sell the points and we get a gain because of the price we sell at versus the price we paid, do we get to account for the fact that we paid annual dues and interest on the amounts?? I guess the interest is a no because we got to deduct for that on the taxes, but the dues, we only got to deduct for the property tax portion of it.

Thanks in advance.

The dues cover things like insurance, water, electricity, housekeeping, etc.

If you sold your home, you wouldn't be able to subtract interest on a mortgage or items like those listed above to figure your gain or loss, either.

FWIW, we hope you consult a bona fide tax adviser. The IRS won't care one bit what some anonymous posters on the internet told you, LOL.

 

[DisneyWalker44]

Theoritically, a small portion of the dues goes for capital improvements, which you could - again theoritically - deduct.

In practice, the hassle of getting the necessary information, checking with a qualified advisor as to what is allowed, and then defending your actions if challenged is probaby way more trouble than any small tax savings.

 

[CarolA]

FWIW, we hope you consult a bona fide tax adviser. The IRS won't care one bit what some anonymous posters on the internet told you, LOL.

AMEN!

I always wonder what the IRS agent is going to think when the defense is "but the DIS told me"

 

[crisi]

AMEN!

I always wonder what the IRS agent is going to think when the defense is "but the DIS told me"

Fortunately, most of us posting tax advice post it very conservatively - you won't get in any trouble claiming all the gain. And most post it with the whole "consult your tax adviser" advice. However, human nature being what it is, I'm sure that some posters see 64 posts saying "don't write it off - or at least talk to a tax pro before you do" and one person saying "sure" and listen to the sure.

 

[dzney2001]

I'm in the process of selling one of my contracts because of an agreement I had with my HB in order to purchase blt.
Does the sale work like a house?
As long as you purchase your profit is adjusted.
I bought before I sold, does that make a difference?

 

[DisneyWalker44]

Does the sale work like a house?
As long as you purchase your profit is adjusted.

It doesn't matter if you buy another timeshare or not - you will probably owe tax if you sell for more than you paid.

Note that they changed the tax laws several years ago, and it no longer matters when you sell your house if you buy another home or not.

 

[CarolA]

I'm in the process of selling one of my contracts because of an agreement I had with my HB in order to purchase blt.
Does the sale work like a house?
As long as you purchase your profit is adjusted.
I bought before I sold, does that make a difference?

No, I don't think it works like a house. I am pretty sure you only get that exemption on the profit from the sale of your primary residence. So in this case if you made a profit you will owe taxes on the profit.