Taxes?

[Hunclemarco]

Hello
Please bear with me, taxes are an area i'm not totally familiar with...

In the past when we did purchase direct, we received a tax credit due to interest on the loan.

When buying resale, will there be any kind of additional taxes involved come tax time now that we have a fully paid deed? Do they treat it as a capital gain or anything like that? Just trying to prepare myself for the future tax season.

Thanks for your help!

 

[chalee94]

If you buy a timeshare contract and later sell it for a gain, then that is a capital gain.

If you sell for a loss, it is a personal loss.

There is no penalty for paying off the deed.

The property taxes portion of annual dues may be deductible.

There is no tax difference between a direct contract and a resale.

 

[Hunclemarco]

If you buy a timeshare contract and later sell it for a gain, then that is a capital gain.

If you sell for a loss, it is a personal loss.

There is no penalty for paying off the deed.

The property taxes portion of annual dues may be deductible.

There is no tax difference between a direct contract and a resale.

Thanks for the information! I'll have to ask our tax accountant on the dues portion to see if we qualify. Thanks also for the clarification of the "capital gain" scenario. It's truly appreciated

 

[Dean]

If you buy a timeshare contract and later sell it for a gain, then that is a capital gain.

If you sell for a loss, it is a personal loss.

There is no penalty for paying off the deed.

The property taxes portion of annual dues may be deductible.

There is no tax difference between a direct contract and a resale.

That's my understanding. To clarify, if you sell at a loss, no tax deduction. The other issue is that if one donates time to charity (say a week) there is no tax deduction for that either.

 

[tjkraz]

There is no tax difference between a direct contract and a resale.

Just for the sake of other readers, there MAY be a difference if the purchase is financed.

DVC writes its direct purchase loans as a mortgage against the property. With a loan structured in this manner, many taxpayers can deduct the interest. This may also be the case if the purchase is financed via a home equity loan or similar.

But with a resale, most of those loans (to my knowledge) are really just signature loans where the debtor assumes personal responsibility for the monies. In that case, the interest is not tax deductible.

 

[Hunclemarco]

Just for the sake of other readers, there MAY be a difference if the purchase is financed.

DVC writes its direct purchase loans as a mortgage against the property. With a loan structured in this manner, many taxpayers can deduct the interest. This may also be the case if the purchase is financed via a home equity loan or similar.

But with a resale, most of those loans (to my knowledge) are really just signature loans where the debtor assumes personal responsibility for the monies. In that case, the interest is not tax deductible.

Any contract we purchase are cash only purchases now.

 

[Dean]

Just for the sake of other readers, there MAY be a difference if the purchase is financed.

DVC writes its direct purchase loans as a mortgage against the property. With a loan structured in this manner, many taxpayers can deduct the interest. This may also be the case if the purchase is financed via a home equity loan or similar.

But with a resale, most of those loans (to my knowledge) are really just signature loans where the debtor assumes personal responsibility for the monies. In that case, the interest is not tax deductible.

Timeshare lenders, the only company I'm aware of that will loan against DVC, they do write it as a mortgage. Still paying a financial institution $10K to save $2.5K in taxes doesn't make me feel much better.