Tax Ramifications For Selling Dvc

[Doctor P]

I still haven't seen any research that supports the statement that "the application is ...in practice quite different". I would be interested to read that "other" research you found - that is, assuming you'd believe my simple mind might be able to comprehend the information.



And from which perspective are you reading this - as a tax professional or a lay person? I am sure you are much more experienced and informed than the rest of us, myself included. We are just in the process of closing, so I have no official documents to which I may refer, but I am curious - are you saying DVC is a ground lease timeshare?

DVC is absolutely a ground lease timeshare which makes it different for some purposes than a traditional timeshare.

With respect to other questions you asked, timeshares are treated differently with respect to rules as to what the criteria are for rental property (as outlined in the link you cited). Furthermore, another difference is that in general you can't take a tax deduction for donating the use of your timeshare for a charity auction, which is different than the rules for a traditional vacation home. Another complication is the notion of payments for capital improvements. These can be difficult, if not impossible, to tease out in a timeshare situation even if they are a legitimate addition to one's basis. They are much less difficult to identify and defend with a traditional vacation home.

Again, this is not tax advice. That needs to come from your own tax advisor.

 

[kdzgon]

Time to unsubscribe - it's the easiest way to help me keep my mouth shut I know this - if I were selling my DVC, I sure wouldn't want to be relying on some of the info here.

 

[CarolA]

Folks, as an Accountant I have one piece of advice.

Tax advice on the DIS is worth EXACTLY what you paid for it.... NOTHING!

Think about it, do you REALLY want to sit in the IRS Auditor's office and say, "But the DIS board told me I could do this" LOL!

 

[Plutofan]

Folks, as an Accountant I have one piece of advice.

Tax advice on the DIS is worth EXACTLY what you paid for it.... NOTHING!

Think about it, do you REALLY want to sit in the IRS Auditor's office and say, "But the DIS board told me I could do this" LOL!

Any professional should really think twice before putting any tax advise in writting due to IRS circular 230. I would consider any of the advise on these boards as not coming from a professional unless that person specifically states that they are a professional and if that is the case they need to be concerned about circular 230. All of my posts relate to that Disney timesahre is structured different than most timeshares so you should consider consulting a tax professional and explain how DVC works in detail before you take a position on your tax return.

 

[miamimama]

Any professional should really think twice before putting any tax advise in writting due to IRS circular 230. I would consider any of the advise on these boards as not coming from a professional unless that person specifically states that they are a professional and if that is the case they need to be concerned about circular 230. All of my posts relate to that Disney timesahre is structured different than most timeshares so you should consider consulting a tax professional and explain how DVC works in detail before you take a position on your tax return.

My question is - why doesn't Disney put out a straightforward statement regarding the tax treatment of DVC each year, based on current IRS regs - or would that open them up to lawsuits?

 

[Plutofan]

Disney is not in the business of providing tax advise especially since they do not know how you used your DVC (personal, rental etc). You should always seek a tax professional when inquiring about the tax implications of a transaction. I have seen way to many times when someone gets advise from a friend just to find out down the road that the advise was not correct.

 

[FrigulettoEA]

A timeshare, deeded or right to use, is a capital asset. It is subject to cg tax if sold at a profit. As a basis you would use your original investment and add the portion of your annual dues that pertain to capital improvements. Sometimes when an investment is sold you will receive a 1099 which is also sent to the IRS. In this case it would be a 1099-S. As for how much of a cg tax you will pay depends on how long you have owned the timeshare, and if you have any capital losses to write off against the gain...ie loss on stock sales. If you receive a 1099 then the IRS will know that you sold it. Audits are a hit or miss. Sometimes IRS will audit targeted specific line items. I hope this helps.

 

[Plutofan]

A timeshare, deeded or right to use, is a capital asset. It is subject to cg tax if sold at a profit. As a basis you would use your original investment and add the portion of your annual dues that pertain to capital improvements. Sometimes when an investment is sold you will receive a 1099 which is also sent to the IRS. In this case it would be a 1099-S. As for how much of a cg tax you will pay depends on how long you have owned the timeshare, and if you have any capital losses to write off against the gain...ie loss on stock sales. If you receive a 1099 then the IRS will know that you sold it. Audits are a hit or miss. Sometimes IRS will audit targeted specific line items. I hope this helps.

Those may be the general rules but I would strongly suggest that you talk to a tax professional before assuming anything especially since no professional would provide tax advise in a written format after implementation of IRS circular 230. So the bottom line is if you want to know how to properly report any transaction relating to DVC, which has many different aspects to it than a normal timeshare, then you should invest some time talking to tax professional who understands DVC.

 

[chainkid]

Thank You all for your advice. I always consult a tax professional as my returns are always very complicated. I was looking for a general rule of thumb as I will probably have t explain it to my accountant since its not exactly a standard timeshare and I have made a profit on its sale. After commisions paid it will be small probably $350. So I doubt the IRS will do an audit for this but I will still file it so as not to raise any red flags. I've been thru an audit once with my business and believe me you will do anything to avoid it. Even when they find you clean they try and find something to justify the time spent. Its a nightmare. Again thanks for all the advice. my head is spinningLOL

 

[manning]

This thread is making it a good argument for a flat tax code!!!!!!

 

[ducklite]

In OUR case, we had to pay capital gains on the net profit we made when we sold our BCV points. We had a CPA handle our return. YMMV.

Anne