Taxes on renting points?

[brnrss34]

I recently inquired on a website to rent out my points but they want me to fill out a tax form? Am I legally supposed to file a claim for renting points to the IRS? I didn’t do it cause I’ve rented them out before and wasn’t asked to fill out a tax form.

 

[erionm]

You should speak with a qualified tax advisor to see if you need to report rental income from a timeshare on your tax return.

 

[CarolMN]

The US-based rental brokers should be issuing 1099 forms (to report the amount of rental income to the IRS). David's is based in Canada and to the best of my knowledge is not required to issue them & does not). Due to an audit, the IRS "caught" one rental broker and he/she now complies with the tax laws regarding 1099s.

 

[wdrl]

In addition to rental income taxes, the State of Florida has a "Sales and Use Tax on Rental of Living or Sleeping Accommodations."

Here is a description of the tax from the State of Florida Department of Revenue:

What is Taxable?

Sales tax is due at the rate of 6 percent on rental charges or room rates paid for the right to use or occupy living or sleeping accommodations. Florida law refers to these living or sleeping accommodations as “transient accommodations.”

If you rent or lease any of these types of transient accommodations, you must collect sales tax and pay it to the Department of Revenue:

• Hotel or motel
• Apartment house or any other multiple unit structure (for example: duplex, triplex, quadraplex, condominium)
• Rooming house
• Tourist or mobile home court (for example: trailer court, motor court, recreational vehicle camp, fish camp)
• Single-family dwelling
• Garage apartment
• Beach house or cottage
• Cooperatively owned apartment
• Condominium parcel
• Timeshare resort
• Mobile home
• Any other house
• Vehicle or other structure, place, or location held out to the public to be a place where living quarters or sleeping or housekeeping accommodations are provided to transient guests in exchange for payment.
• Boats with a permanent fixed location at a dock and not operated on the water away from the dock by the tenant

Rental charges include any charge for the use of items or services required to be paid as a condition of the use or possession of the accommodation.

Most counties have a discretionary sales surtax, local option tax, tourist development tax, convention development tax, or tourist impact tax on rentals of transient accommodations. More information can be found in the Discretionary Sales Surtax brochure (Form GT-800019) and on the list of surtax counties and rates (Form DR-15DSS). You can find these and other publications on our web site at www.myflorida.com/dor. For specific county rates, go to our Tax Law Library and do a search for “DOR Local Option.”

Landlords should contact us or their local county taxing agency to determine whether a county has a local tax(es) and whether you are required to report and pay this amount directly to your county or if you should report it on your sales and use tax return.
​

As erionm posted above, its best to speak to a qualified tax advisor.

 

[chalee94]

Rental income, like pretty most sources of income, is taxable.

 

[marcyleecorgan]

Renting your points IS considered income by the IRS. Report it!

 

[CraigInPA]

Renting your points IS considered income by the IRS. Report it!

Note you can offset some of the income by apportioning your maintenance fees against it, as well as any costs associated with renting the points. At present rental rates, that will eliminate about half of the "income" from the rental.

 

[miTnosnhoJ]

If you have enough assets to buy DVC, you really don’t want to run afoul of the tax laws. See a tax advisor.

 

[_auroraborealis_]

Really, no one wants to run afoul of tax laws. The IRS is way up there on the list of organizations not to run afoul of. Along with the mob, really.

 

[CarolMN]

Really, no one wants to run afoul of tax laws. The IRS is way up there on the list of organizations not to run afoul of. Along with the mob, really.

And the DIS mods & webmasters too, right?

 

[_auroraborealis_]

And the DIS mods & webmasters too, right?

Compared to the IRS, y'all are fuzzy bunnies.

 

[miTnosnhoJ]

One more thing. You may hear about the Augusta Rule. This allows homeowners to rent out their homes for up to 14 days per year without reporting taxes. It was created for people to rent out their homes for the Masters Golf Tournament. This rule does not apply to timeshares.

 

[penlanspice]

Ive always used David's and looked into the other company this weekend as you get slightly more per point and received the same info about the tax. Think I'll stick with David's.

 

[_auroraborealis_]

Ive always used David's and looked into the other company this weekend as you get slightly more per point and received the same info about the tax. Think I'll stick with David's.

Just because David's doesn't provide info about the tax doesn't mean it doesn't apply.

 

[Dean]

I recently inquired on a website to rent out my points but they want me to fill out a tax form? Am I legally supposed to file a claim for renting points to the IRS? I didn’t do it cause I’ve rented them out before and wasn’t asked to fill out a tax form.

Legally an US citizen owes taxes on income above deductible items. Simplistically that means taxes are marginal tax rates for the rental price minus the applicable dues. No allowance for depreciation related to the purchase amount. While technically possible, it's not feasible to use the two free weeks a year you might with a condo. Many don't report it though.

 

[Plutofan]

Also be sure to check with your tax advisor on how it gets reported on your personal tax return. There are specific situations under which the activity would be reported on schedule C due to the short term nature of the average rental

 

[brnrss34]

Ok thanks everyone I had no idea.

 

[anitatina]

Note you can offset some of the income by apportioning your maintenance fees against it, as well as any costs associated with renting the points. At present rental rates, that will eliminate about half of the "income" from the rental.

What are some possible costs associated with renting out points? I can't think of any...

 

[LYSE]

What are some possible costs associated with renting out points? I can't think of any...

Maybe if you ate PayPal fees or gave someone a commission or referral bonus

 

[Dean]

Maybe if you ate PayPal fees or gave someone a commission or referral bonus

Rental listings, payday/CC fees, commissions, taxes, escrow fees are some that come to mind. But overall small potatoes which is why I didn't mention those above, I thought it'd add more confusion to the message than it's add information.