tax return question did not receive 1098...on resale

[minnieluvzmickey]

I bought a resale several years ago through the Timeshare Store and financed through Benchmark bank. I have always received an interest form every year and counted the interest off on my taxes. Benchmark bank was dissolved (I think) and the loans are now owned by MB Financial.....last year I got an interest statement in the mail from MB Financial. This year I did not get one and I called to enquire about why...they stated that they needed to check and call me back.

Today I got a call back and they left a message saying that they weren't sending out interest statements for these loans any more because they are unsecured and not reported to the IRS. When I bought the resale I was told by the timeshare store that this was like a mortgage and that the interest is tax deductible.

Has anyone else had this happen?

 

[disneydenisel]

Well, in lieu of any official paperwork, you probably have a record of what you paid each month for 2010, and also you must have it documented what the interest was per month. So you can calculate the interest yourself for your taxes if nothing is forthcoming from them. Just itemize that and put the name of the company next to it on your Schedule A.

If you are missing paperwork, then you must have the original loan docs that stated the amortization schedule. That should also outline the monthly interest for the life of the loan. If that is not around, then you can use a simple online calculator for mortgage loans and figure out the exact amortization schedule yourself. There are many online calculators, just do a search for mortgage calculator.

Good luck. You should be able to do this on your own without the official 1098, provided you have the canceled checks or records to back up your interest claim.

 

[chalee94]

Well, in lieu of any official paperwork, you probably have a record of what you paid each month for 2010, and also you must have it documented what the interest was per month. So you can calculate the interest yourself for your taxes if nothing is forthcoming from them. Just itemize that and put the name of the company next to it on your Schedule A.

Good luck. You should be able to do this on your own without the official 1098, provided you have the canceled checks or records to back up your interest claim.

except that personal, unsecured interest - like that on a credit card - is not legally deductible.

probably better to check with a tax specialist than rely on advice from the interweb...

 

[ldo]

I thought DVC interest was deductible only when it was financed thru DVC b/c they kept their loans. I am pretty sure that no other TS purchase loans at other resorts are tax deductible b/c they do not keep the loans. It think there used to be some posts about this, if you do a search.

 

[chalee94]

I thought DVC interest was deductible only when it was financed thru DVC b/c they kept their loans. I am pretty sure that no other TS purchase loans at other resorts are tax deductible b/c they do not keep the loans. It think there used to be some posts about this, if you do a search.

nope - DVC has historically NOT kept their loans. they may have continued to handle the payments and such, but they sold the actual loans (sorta - i think they had the right to replace any sold loans that had to be foreclosed).

the loan has to be secured by real estate (a 1st or 2nd home, i believe) - and if the poster is deducting the interest while the bank is telling the IRS that the interest is nondeductible...then problems might come up...

http://www.irs.gov/publications/p936/ar02.html

 

[disneydenisel]

except that personal, unsecured interest - like that on a credit card - is not legally deductible.

probably better to check with a tax specialist than rely on advice from the interweb...

Well, I thought that the OP had been deducting the interest all along as a real estate/mortgage loan. If that is NOT the case, then none of the interest can be deducted.

When I bought the resale I was told by the timeshare store that this was like a mortgage and that the interest is tax deductible.

I guess you really need to go back to your original loan papers, then. If you were told it was "like a mortgage," then verify this.

I am definitely NOT a tax specialist, but my sister is a CPA, which doesn't qualify me at all, but it helps sometimes when I have tax questions of my own .

 

[AlwaysEeyore]

I bought a resale several years ago through the Timeshare Store and financed through Benchmark bank. I have always received an interest form every year and counted the interest off on my taxes. Benchmark bank was dissolved (I think) and the loans are now owned by MB Financial.....last year I got an interest statement in the mail from MB Financial. This year I did not get one and I called to enquire about why...they stated that they needed to check and call me back.

Today I got a call back and they left a message saying that they weren't sending out interest statements for these loans any more because they are unsecured and not reported to the IRS. When I bought the resale I was told by the timeshare store that this was like a mortgage and that the interest is tax deductible.

Has anyone else had this happen?

Yes I had the same problem but last year I still got a tax form from Benchmark not MB. I was going to call MB today but since you tried that already I won't bother. I'll let my tax guy deal with it, I have my form from last year he can go off of if he needs to.
THANKS!!!

 

[chalee94]

Well, I thought that the OP had been deducting the interest all along as a real estate/mortgage loan.

if the loan terms are the same, the OP needs to straighten out MB so that they are reporting the same info to the IRS.

but if MB is showing that the loan is not secured by the real estate, then deductibility is going to be a problem as that is what the IRS will consider definitive.

 

[jlewisinsyr]

If the originating loan company secured it, but the new one is not, it is possible the tax qualifications changed.

 

[Anthony1971]

You should go back and check your original paperworks and make sure your Timeshare is listed as collateral for this loan as you may have been falsely taking a deduction all along.
From what I understand the only company that does use DVC as collateral is direct from DVC all others are in the end a credit card loan. In the old days DVC was the same as well.... I do not know exactly when DVC offered the loans but I am fairly certain it was in the 2000's somewhere.
On a side note if the IRS questions your deduction you need to prove it is backed by your DVC so get the original paperwork out and find out the truth. Your accountant will not sort it out he/she will do what you tell them to do or tell them it is it is your responsability to find out what this loan is for. In the end it is not worth the few dollars you will save in a tax refund compared to the penalities you will incur if the IRS decides to investigate this.
Please do not think an accountant will verify if you can take this deduction or not he/she only knows you are telling him this loan is for.......bring him the original loan documnets if you have any questions or want him to verify the deduction.

 

[Tramp&TheLady]

Similar but unrelated question... Will mb financial tell you what you owe on the loan if you call them?