Taxes?????

[Mickey527]

Hi all,
this is my first year with my DVC, my closing was last January.
I don't want to pay someone $200 to do my taxes, I have always done my own.
Does anyone know if I can claim the entire amount of taxes and interest or do you have to calculate it by amount of time there etc? If so I won't bother, it will cost me more in paying an accountant than I will get back in refund.
Thanks for the help Peggie

 

[spruce]

DVC is considered a 2nd home to the IRS. You can deduct all of the taxes paid that are a part of your dues and all mortgage intrest. You can't take the intrest deduction if it is a personal loan, not a mortgage. DVC will sent an intrest and tax statement to you....spruce

 

[DVCDAVE]

I will assume you itemize your income taxes.... Yes you may deduct the property taxes you pay on DVC. Interest may be deductable if you you currently don't have a second house, and the loan you took for DVC is collatoralized by either your DVC interest or your primary home, providing your combined mortgage obligations don't exceed $1,000,000 and/or your home equity loan doesn't exceed $100,000.

I use Turbo Tax by Intuit, and it walks you right through the Inteerview, making the tax preperation quite simple.

Most states though, won't allow you to deduct DVC taxes on their returns, unless you also file a FLA income tax return, and who is going to do that unless you either live or work in FLA.

 

[SINK]

Originally posted by DVCDAVE


Most states though, won't allow you to deduct DVC taxes on their returns, unless you also file a FLA income tax return, and who is going to do that unless you either live or work in FLA.

Just to clarify what DVCDAVE has said, for your home state income tax purposes, the property taxes paid to other states are not deductible (For State Income Tax only). The portion of the dues paid related to property tax is deductible for federal income tax purposes. I have to say that DVCDAVE is perfect in stating that if you don't have another secondary vacation home.

 

[DVC Chris]

I don't own a home and have never found itemizing to be in my best interest. Is there anyway to deduct the interest and/or property taxes?

Thanks.

 

[drusba]

Unless you itemize deductions, you cannot take any for interest and property taxes.

 

[DVCDAVE]

DRUSBA is 100% correct. Unless you itemize on your 1040 there is no way to deduct mortgage interest or taxes on your DVC interest.

On federal 1040 tax returns; My understanding is that all property taxes are deductable even if you have a second home already, but mortgage interest on a DVC interest is not deductable if you already own a second home. I have found no 2nd home disqualifacation on the federal 1040 instructions on real estate taxes, I only found it on mortgage interest.

 

[colleen mcmaster]

We paid cash for a resale this past summer. What, if anything can we deduct (assuming we itemize)? When will we receive a statement from Disney? Thanks for your help!

 

[hoosiergirl]

All these years of dues--and I never even thought about deducting some of them because of property taxes!! AAAHHH! How do you all do this? Use the "breakdown" and multiply that amount by the annual points? (Itemizing on the Federal form, of course.) Also, if we add on with Disney, we're thinking of taking a loan on the points and just paying off our car so that we can deduct the interest on the DVC points. Since we have no 2nd home, is this do-able and reasonable?

 

[DVCDAVE]

COLLEN MCMASTER;

You may deduct the taxes you paid last year on DVC. You should have received a summary from DVC on last years taxes, and purposed summary of dues for this year (2002) with a breakdown of taxes in early January.

HOSSIERGIRL;

You may deduct not only DVC Taxes, but you may also be able to deduct interest on your DVC purcahse, as long as you have either your DVC interest, or your primary home as collateral against the loan (ie; mortgage or home equity line). Keep in mind though that the IRS has limits as to mortgage deductability. Your morgages are deductable up to $1,000,000 and home equity line up to $100,000 in principle amount (face value).

 

[rfassett]

Hey!!!

Why not pay $200 to get your tax return done? At least then you will get the correct advice or have someone to hold accountable. I have a Masters of Taxation degree and would be glad to help you out but I just can not bring myself to give out free advice this time of year; I guess anymore so than a doctor would anytime of year. Incidentally, I have always felt that your accountant should not cost you anything. Chances are very good that a qualified professional would save you tax dollars or at least give you peace of mind that you have a professionally prepared return.

Well - back to work!

Have a nice evening!!!

 

[SINK]

hoosiergirl:

Have you considering amending your three previous tax returns? You could. But I would not think the amount of your tax refund on the amended returns could be worth the trouble.

 

[Mickey527]

rfassett,
I do agree with you, I probably should hire someone, but I usually work out my taxes and then had someone do them for me. I wound up getting only a little more from the professional ones, and $200 buys an awful lot of stuff.
and I know what a pain it is answering questions, I am a nurse and friends are always asking me what their rash looks like, or what they should take for this symptom.
Just wanted a yes/no answer on claiming, and you guys all gave me some great info. Thanks Peggie

 

[SINK]

$200 is deductible (not sure if subject to 2% of AGI), therefore, for itemizers in the 28% bracket and a 9.3% state marginal rate (at least for CA residents), you will get a rebate from Uncle Sam the following year, unless the cash basis taxpayer prepaid their accountants (on December 31st), then if you file on-time (April 15th), you should get a $68.09 rebate (28% plus 9.3% minus 3.3% of lost SIT deduction on federal return times $200.00) on the $200.00 tax preparer's fee from Uncle Sam by June.

 

[hoosiergirl]

I doubt amending the returns for the taxes would do much for us--we paid cash years ago (1993) when we bought into DVC so haven't paid any interest on it. However, we thought it might be more advantageous to pay off a car and "mortgage" add-on points rather than vice-versa. Sounds like it will be!

 

[ohiominnie]

rfassett,
Not totally true. Doctors give out free advice ALL the time!!! My dh is a pediatrician and you wouldn't believe how often he hears things from relatives and friends like "can you take a look at this rash?" "what do you think of that carnation good start formula?" and "i'm not sure i want my kid to get that chicken pox vaccine. tell me about it."

He is always answering questions and he does so in the best interest of the children.

Also, whenever a parent calls his office with a question, he gives out free advice....he does not charge for phone calls.

As for the tax stuff....I have no idea. My dh does it with Turbo Tax after several years using an accountant to do it and finding out he could do it better (i'm sure this was just a bad accountant) The final year was the straw that broke the camels back when we found out in hindsight that he hadn't deducted our property taxes or our mortgage interest on our first home!!! OUCH!!!

ohiominnie