Tax implications of DVC

[bavaria]

I did a search, and found one very small thread on this.

I will be filing a US tax return for the first time for the 2005 tax year. I will also be filing a Canadian return. (At least I don't need to file a German one this year!)

My question is: do any DVC owners (Canadian or US) wish to comment on tax implications for

- Maintenance fees
- income from rental
- ??? anything I may be missing

I did see on another thread that Canadians cannot claim maintenance fees, which leads me to believe that Americans can claim.

Any information or advice would be appreciated - I am starting a little early in anticipation of a rather complex tax season...

 

[pumpkinboy]

The tax difference for DVC maintenence fees between the US and Canadian regimes is that in the US, you can deduct the portion of the maintenence fees that represents local property taxes from your federal return. I do not believe you can deduct US municipal taxes paid from your Canadian return (nor Mortgage interest for that matter).

The nice thing is that, if you have a US address, DVC will mail you a nice little form that breaks out the local property taxes for you so you know how much to deduct on your US Federal return.

Planning for your first US tax return now is a good idea. So is getting a good accountant who can help with both your US and Canadian tax returns. Good Luck!

 

[bavaria]

Thanks for the info - I assume that my piddly little contract won't amount to much, but every penny helps.

 

[Laurajean1014]

Every penny does count. Take advantage of every tax credit you can. I believe you can also deduct a portion of the maintenance portion of the dues in US. So, it is taxes and a portion of repair/maintenace.

 

[bavaria]

Thanks for clarifying. I'm used to being taxed to death before receiving my net pay, and am not used to receiving a significantly larger paycheque. It makes me nervous for tax time! (as we discovered on the Budget Board, Germany and Canada take a much larger chunk out of paycheques to support the social services structure)

Can anyone comment on the tax implications for a member renting out points ie the $$ 'earned' from the transaction?

 

[dianeschlicht]

Can anyone comment on the tax implications for a member renting out points ie the $$ 'earned' from the transaction?

The income on that is taxable in the US, but I do believe you are able to deduct a portion of the fees on it. Not sure about that, since we have never rented out, but the income from it WOULD definitely be taxable.

 

[CarolMN]

Every penny does count. Take advantage of every tax credit you can. I believe you can also deduct a portion of the maintenance portion of the dues in US. So, it is taxes and a portion of repair/maintenace.

AFAIK, the only thing you can deduct from US taxes is the portion of annual dues attributed to local property taxes. I've never heard that it is OK to deduct a portion of the "repair/maintenance".

If you have financed your purchase, you may be able to deduct the interest charges - that depends on what kind of loan you have.

I am not an accountant or tax specialist, but I do know it is often wise to consult one for your particualr circumstances (unless you don't mind going to IRS audits alone, LOL).

Best wishes -

 

[bavaria]

I am not an accountant or tax specialist, but I do know it is often wise to consult one for your particualr circumstances (unless you don't mind going to IRS audits alone, LOL).

Best wishes -

Oh, Carol - you just gave me a bad flashback to my fight with Revenue Canada when I moved from Germany!

Thanks everyone for the advice, and I will be consulting accountants on both sides of the border this year!

 

[mowog]

We have 170 points at BCV and for 2004 the property tax portion of the annual fee according to my statement was $147.29. This will kind of give you an idea of what kind of deduction you may be able to take (consult your tax advisor blah blah blah etc etc). If you itemize deductions instead of using the standard deduction it's not a great amount, but every penny helps!

Jean and Bob