tax deduction on dvc loan?

[dcibrando]

Question:
Do you get the annual tax deduction for interest on just purchasing from Disney or can you do this on resales through other sites?

Also... what is the approx. tax deduction (basically annual tax deduction & payment back each year) on say a $15,000 DVC purchase?

 

[CarolA]

I temporarily financed my first purchase via the TSS finance company. IMHO it is not tax deductible. The loan has to be secured by a real estate interest for interest to be deducted. The loan papers I had were clearly a personal loan NOT secured by a real estate interest. (which is probably why the rates are so high) Disney's loan is secured by the timeshare.

(However, always remember... tax advice on the DIS is worth what you pay for it. Do you want to tell the IRS Auditor "The DIS told me it was deductible?")

 

[Maistre Gracey]

I still have some financed through Disney, and my accountant deducts it since it's secured by a mortgage.
The property taxes are also deductible according to my accountant.

MG

 

[Caskbill]

IF you itemize your taxes, then:

1. The property taxes are deductible.

2. The interest paid might* be deductible but only if it is secured by the property itself. When financing through Disney, the loan is secured by the property.

The amount of interest you'd pay on that loan would depend on the interest rate you get and the length of the loan. The interest on $15,000 at 10.75% for 10 years would be approximately $1,560 for the 1st 12 months. that's approximately $130/month in interest and about $75/month toward principal.

You can experiment yourself at this site: http://ray.met.fsu.edu/~bret/amortize.html

*There is a limit on how many properties you can own which have mortgages and which you can deduct interest payments. At one time it was 3 but you'd need to verify that. Properties that use to qualify would be a home mortgage, home equity, 2nd mortgage, other real estate such as a summer home, lot, etc., or even an RV or boat (if it has full cooking, sleeping, bath accommodations).

As always, a disclaimer: The above is my recollection and may not be current IRS regulations.

 

[MarieA]

We purchased our DVC with a home equity loan so our interest is tax deductible.

 

[crisi]

There are some other gotchas - I think you can only deduct the mortgage interest on a first and second home - the third one you can't deduct (but I'm not going to look it up right now - consult a real tax advisor not someone on the DIS), also, deductions phase out at a certain AGI.

I belong to another board and I will paraphase an attorney who posts there (and Carol's advice):

"This is not tax advice, do not take tax advice (legal advice or medical advice) from someone over the internet. For all you know I could be a monkey taking a break from flinging poo to type."