Taxes...

[Maliki2]

While doing the open house tour at Boardwalk I was told that DVC can be tax deductible.....is this the maintence fees and because taxes are included in those maintence fees? (Vermont here if that helps)

 

[CarolinesMom]

Only the taxes portion of your maintence fees can be tax deductable (I think like 24%). At least that's the way it was explained to me.

 

[jberry5]

As a CPA I can't see how the purchase price or maintenance fees would be tax deductible. I think they likely were saying that in regards to the interest paid in financing DVC.

What type of taxes are included in the maintenance fees?

 

[crisi]

The property tax portion of maintenance fees are - but its pennies to the point.

The financing may or may not be. Consult a tax professional (it usually is, but there are some real gotchas in the tax law).

 

[Maliki2]

The property tax portion of maintenance fees are - but its pennies to the point.

The financing may or may not be. Consult a tax professional (it usually is, but there are some real gotchas in the tax law).

Yeah exactly my question wasnt sure if it was the financing or the taxes included in the maintence fee. Hell if I could save $75 bucks, I'll save $75 lol

 

[smep013]

I think it's because of the interest you pay.

 

[Caskbill]

If you finance DVC (through Disney, or something like a home equity loan), where Real Estate property is used to secure the loan, then in most cases the interest you pay on the loan may be deductible, provided you itemize deductions.

A portion of the maintenance fees you pay is used to pay Florida Real Estate taxes on the property. Again, the portion applied to Real estate taxes will be deductible, (in most cases), if you itemize deductions.

It's always best to consult your accountant if you're not sure.

 

[Princess Jasmine]

Do you get any kind of statement showing the amount you paid in taxes each year? Also, if you finance through Disney do they send you a interest statement? Thanks.

 

[Kathi OD]

We get two statements from Disney each year. One is the annual dues statement that shows the amount of taxes we paid for the previous year. The second statement is a 1098 (Mortgage Interest Statement) which shows the amount of interest we paid on our mortgage. If you don't finance through DVD, I'm not sure if you would get this or not.

 

[crisi]

Yeah exactly my question wasnt sure if it was the financing or the taxes included in the maintence fee. Hell if I could save $75 bucks, I'll save $75 lol

That would be a LOT of points.

I think our deduction last year was in the neighborhood of $60. And if you have a 32% rate, that is around $20 in tax savings. A few Mickey Bars, but I wouldn't make a purchase decision based on what you'll save in taxes.

 

[Granny]

That would be a LOT of points.

I think our deduction last year was in the neighborhood of $60. And if you have a 32% rate, that is around $20 in tax savings. A few Mickey Bars, but I wouldn't make a purchase decision based on what you'll save in taxes.

This got me curious so I went to the DVC member web site and was gratified to see that they have the last dues statement on line. For my 275 VWL points, the estimated property tax for 2007 that I paid was $276.49. A quick trip to my calculator tells me that the taxes represented 21% of my annual dues.

 

[crisi]

This got me curious so I went to the DVC member web site and was gratified to see that they have the last dues statement on line. For my 275 VWL points, the estimated property tax for 2007 that I paid was $276.49. A quick trip to my calculator tells me that the taxes represented 21% of my annual dues.

That is a lot higher than I remember it being, but that's what I get for not looking it up.

(We don't bother, our state taxes are enough to hit our deduction cap, so things like DVC - why put it in?)

 

[jberry5]

(We don't bother, our state taxes are enough to hit our deduction cap, so things like DVC - why put it in?)

What cap are you referring to?

 

[Kathi OD]

That is a lot higher than I remember it being, but that's what I get for not looking it up.

(We don't bother, our state taxes are enough to hit our deduction cap, so things like DVC - why put it in?)

Because the more over the "cap" you go, the more you get back??

 

[crisi]

What cap are you referring to?

There is a deduction cap if your income is over a certain amount, I think it kicks in around $150k - we run into it every year - or we run into AMT which ends up with the same problem. I can't remember exactly how it works, but I don't worry about doing things based off deductions since usually it doesn't work for us.

It may not be a cap, it may be a proportional decrease in deduction value.

 

[jberry5]

There is a deduction cap if your income is over a certain amount, I think it kicks in around $150k - we run into it every year - or we run into AMT which ends up with the same problem. I can't remember exactly how it works, but I don't worry about doing things based off deductions since usually it doesn't work for us.

It may not be a cap, it may be a proportional decrease in deduction value.

Got ya. The reason I asked is that I had a client once who thought once you got to the standard deduction amount, that was as high as your itemized deductions could be. Given your situation though, AGI > $150,000 and the effects of AMT, that makes much more sense to me now.