Tax time is here, how do you declare DVC?

[ScottNBecky]

Anyone have any idea about how DVC factors into taxes? Can you claim any portion of this or not? Thanks in advance!

 

[tor]

i believe the property taxes and any interest on the loan(mortgage) since it is a second home are deductable

 

[lovinthemouse]

we used Turbo Tax premier and there was a question to claim vacation/timeshare homes.

 

[Hef4545]

I would love to try Turbo Tax but I am a little afraid. How difficult is it to use?

 

[tiggercrew]

Turbo Tax is very user friendly...it walks you through everything.

Good Luck.

 

[Doctor P]

The answers to your questions depend on your personal tax circumstances. It is possible that neither the property taxes, nor interest, may be deductible or both may be deductible in your circumstances. Please consult your tax advisor for correct answers that apply to you.

 

[vascubaguy]

In most cases you can deduct the property taxes you pay, which are included in the annual dues.

Also, if you financed your DVC purchase thru Disney, you can usually deduct the interest. I am not a tax professional, by any means, but I believe their are certain restrictions. I think you can only do this for a 1st and 2nd mortgage. So, if you have a primary mortgage, and a home equity loan, AND a DVC purchase, I don't think you can count all 3.

It is always best to consult with a tax advisor (or using one of the tax software programs can usually be a good way to avoid making some mistakes). Depending on your income level, you might be able to use some of the services for free. If you go to irs.gov and then click on the 'file online' link you can get a list of providers where you can file for free. H&R Block and TurboTax are on that list of providers as well as many many others.

 

[lovinthemouse]

I would love to try Turbo Tax but I am a little afraid. How difficult is it to use?

So very simple. Just read the questions and go. It will even give you examples of items. I am self employed and it is the only way to go for me.

 

[MiaSRN62]

I agree.....Turbo Tax is very easy to use. I think I'm going on our 6th straight year of using it to do our taxes. We do the 1040 and itemize deductions. We do claim the interest portion and real estate taxes of our DVC on the form.

 

[pklein09]

The property tax paid and any interest you may have on a qualified loan are deductible if you itemize. You must file a Schedule A to take those deductions.

Also, Turbo Tax is a fantastic product that will walk you through the steps to file your own taxes. It's very clear and easy to use.

--Michelle

 

[Doctor P]

Michelle,

As helpful as you were trying to be, and as experienced as you might be as a tax preparer, there are a number of subtleties in the tax code that don't make things quite as simple as you state them. While most people will find that the interest on a loan through Disney and the property taxes paid on the DVC property are deductible if they itemize, there are many people that will fall in the cracks (especially on the interest issue). Home equity loans and lines of credit are one area that is much more complex than your post suggests. I reiterate the advice that one needs to consult their own tax advisor to determine the appropriate application in their tax circumstances.

 

[pklein09]

Thanks for the clarification Doctor P. I've changed my post so as not to confuse anyone. My apologies to those I might have confused.

--Michelle

 

[Plutofan]

For all of us practicing professionals we need to watch out for IRS Circular 230 about giving written tax advise.

 

[Doctor P]

Well put, plutofan. I'm not trying to be harsh or evasive with anyone, but even a well-trained and experienced CPA will often have to look things up to make sure that the right answers are given to match a client's circumstances.

 

[pklein09]

Point taken, and thank you.

 

[Good Ol Gal]

where do I find how much in real estate taxes we paid?? would that be the "Actual Property Tax" listed under My DVC?

 

[cdy16zz]

Illinois

Our state doesn't allow you to use it as a deduction.

 

[momsgoofy]

Illinois

Our state doesn't allow you to use it as a deduction.

RATS! I'm still taking the tax documents we received from DVC to the CPA when we turn in everything...we can still all hope for a little Can't we?

 

[Caskbill]

I believe the limit of 3 different loans is still current. Again, you would need to check to be sure.

When we originally purchased we already had both a house mortgage and a loan on an RV. We were not allowed to also declare the interest on the Disney DVC as it was a 3rd property.

At the time, you could have only two and if I recall, all the following counted:
A home's primary mortgage
A secondary mortgage
A home equity loan
A loan on an RV (if fully contained - having sleeping, cooking, bath facilities)
A loan on a Boat (if fully contained - having sleeping, cooking, bath facilities)
A loan on a vacation home, etc.

In our case, we went and got a home equity loan, paid off the RV loan and paid off the DVC loan using the equity loan. That put us at only two: Main home mortgage and home equity, so everything from then on was deductible, and the home equity loan was at a lower rate, so everything worked out great.

 

[Caskbill]

Illinois

Our state doesn't allow you to use it as a deduction.

Obviously you mean on your Illinois State Income tax form.

Where you live has nothing to do with having the deduction for your Federal Income tax, so if otherwise eligible, you can still declare it on Federal.