Trade/Rent Points for DCL Cruise

[sagosto]

I've read NUMEROUS times that utilizing renting/trading points for DCL is bad value. I reached out to DVC Rental Store (https://dvcrentalstore.com/members/cruise/) and I am seeing $18 per point for Riviera and you don't deal with the tax implications. I average about 190 points for the weekly November trip in a studio which comes out about $3,420 (190 X $18). Is the issue the $18 per point? I have 200 points banked and playing catchup and part of me can't justify paying DCL directly out of pocket (BIG RCCL fan here). So, this seems like a WIN/WIN for me unless the value is that bad. It's as if I am missing something?

 

[varyth]

I think the bad value is if you trade your DVC points in for DCL directly (going through the DVC member services) due to the poor conversion rate, as opposed to renting out your DVC points for cash and using that cash to book DCL.

 

[LYSE]

That's not bad value what people mean is literally booking the cruise with disney using points, that is basically getting robbed

 

[Sandisw]

When you use your points for the cruise and then compare that to the cash cost, the value of the points is much less than what you can get renting, and paying cash yourself. However, for us, if we decide to go on a cruise and it takes the place of one of our 3 or 4 night Disney trips, then we could end up just booking with the points, value aside. That is why we bought them.

 

[kilik64]

Probably wrong actual numbers, but yea the BAD way to do it is direct through disney who'll basically give you like $9 per point in credit. Renting the points and using that money to pay for the cruise is the much better way to do it and is what people mean by never go through disney to swap to cruise (which only direct points and some really old resale points can do anyways)

 

[sagosto]

This makes more sense. The trade chart for the DCL Fantasy would be like 500 for a family of 4 for a basic balcony. Source: https://cdn1.parksmedia.wdprapps.di...023-Fantasy-7NEC-8N-BER-5N-BAH-4-4-2022-1.pdf

It sounds like renting the points @ $18 per isn't a BAD use of the money. It's hard to quantify it given you have to compare a hotel room with an all-inclusive.

 

[CarolMN]

It sounds like renting the points @ $18 per isn't a BAD use of the money. It's hard to quantify it given you have to compare a hotel room with an all-inclusive.

Compare the cash cost of the cruise with the point cost of the cruise. (Not the hotel room with the cruise). You get the same experience no matter how you pay. If you rent your points and use the proceeds to pay cash, you will use less points than if you just paid the points to the cruise line. Check our this thread:

Using Points for the DVC "Collections"

It's from 2019, and point rental costs are now higher than the examples used in the tbread. But the concept is still very valid.

 

[pianomanzano]

I've read NUMEROUS times that utilizing renting/trading points for DCL is bad value. I reached out to DVC Rental Store (https://dvcrentalstore.com/members/cruise/) and I am seeing $18 per point for Riviera and you don't deal with the tax implications. I average about 190 points for the weekly November trip in a studio which comes out about $3,420 (190 X $18). Is the issue the $18 per point? I have 200 points banked and playing catchup and part of me can't justify paying DCL directly out of pocket (BIG RCCL fan here). So, this seems like a WIN/WIN for me unless the value is that bad. It's as if I am missing something?

Can you clarify what's meant about the tax implications? Was this something DVC rental store said if you do the point swap?

 

[CarolMN]

Just a guess (not a tax expert), but it's not really any different than giving your points to MS to pay for your cruise. You are just giving less of them to the DVC Rental Store than you would have to give DVC. No cash (income) comes to you. You don't pay any income tax on the points you use to pay for any of the DVC options. You just pay taxes on the income when you sell your points for cash. Again, I am not a tax preparer and am just guessing at the logic.

 

[_auroraborealis_]

When we say "renting points for a cruise is bad" we mean when a non-owner comes to ask about it. Because renting DVC is a big savings for resort stays, many non-owners believe this is universal and creates banging cruise deals too.

It does not!

But if you, as an owner, make a resort booking for a non-member who gives you money and you go and spend that money on a cruise, it is a more effective exchange value than just paying for the cruise in points via Disney. Call it money laundering.

 

[pkrieger2287]

Hey Everyone!

As the Member Relations Supervisor for our Swap Program at DVC Rental Store, I'm happy to shed a bit more light on this situation!

Swapping your points with DVCRS provides you significant savings as compared to exchanging your points directly with DVC for a cruise or adventure.

Let's take this trip for example: 7-Night Alaskan Cruise, on Disney Wonder, Departing August 22, 2022 (2-person booking)

• Direct through Disney: 780 Points + $95 Fee
• Swapping Your Points w/ DVC Rental Store: 297 Points* + No Fees

That's a savings of at least 483 points! You take this trip twice and still have points to spare!

First, you will work with one of our swap advisors to plan your cruise, adventure, etc. Let's say that trip ends up costing $5,000. You will then rent points to pay down this balance owed for your swap. If your points are paid out at $18 per point, you'd be looking at renting 278 points to pay for this trip. Not looking to rent that many? That's the other beauty of it - we require you to rent/swap a minimum of 100 points, but after that, you can pay for the remainder of the trip in cash if you would wish to do so.

Regarding the tax implications, @CarolMN was pretty spot on in her answer. This is viewed as an equal exchange and thus not subject to taxes. You will not receive a 1099 from DVCRS for points swapped, which allows you to harness the full $16 or $18 per point value without needing to set some aside for tax purposes.

You can learn more about all of our swap programs at DVC Rental Store via this link: https://dvcrentalstore.com/members/dvc-point-swap-programs/

Let me know if you have any further questions or concerns, and I would be happy to help!

 

[Sandisw]

Hey Everyone!

As the Member Relations Supervisor for our Swap Program at DVC Rental Store, I'm happy to shed a bit more light on this situation!

Swapping your points with DVCRS provides you significant savings as compared to exchanging your points directly with DVC for a cruise or adventure.

Let's take this trip for example: 7-Night Alaskan Cruise, on Disney Wonder, Departing August 22, 2022 (2-person booking)

• Direct through Disney: 780 Points + $95 Fee
• Swapping Your Points w/ DVC Rental Store: 297 Points* + No Fees

That's a savings of at least 483 points! You take this trip twice and still have points to spare!

First, you will work with one of our swap advisors to plan your cruise, adventure, etc. Let's say that trip ends up costing $5,000. You will then rent points to pay down this balance owed for your swap. If your points are paid out at $18 per point, you'd be looking at renting 278 points to pay for this trip. Not looking to rent that many? That's the other beauty of it - we require you to rent/swap a minimum of 100 points, but after that, you can pay for the remainder of the trip in cash if you would wish to do so.

Regarding the tax implications, @CarolMN was pretty spot on in her answer. This is viewed as an equal exchange and thus not subject to taxes. You will not receive a 1099 from DVCRS for points swapped, which allows you to harness the full $16 or $18 per point value without needing to set some aside for tax purposes.

You can learn more about all of our swap programs at DVC Rental Store via this link: https://dvcrentalstore.com/members/dvc-point-swap-programs/

Let me know if you have any further questions or concerns, and I would be happy to help!

Thanks for the info! It may sway me to do it that way!! Another Disney cruise is on my list!!

 

[Jgc014]

Hey Everyone!

As the Member Relations Supervisor for our Swap Program at DVC Rental Store, I'm happy to shed a bit more light on this situation!

Swapping your points with DVCRS provides you significant savings as compared to exchanging your points directly with DVC for a cruise or adventure.

Let's take this trip for example: 7-Night Alaskan Cruise, on Disney Wonder, Departing August 22, 2022 (2-person booking)

• Direct through Disney: 780 Points + $95 Fee
• Swapping Your Points w/ DVC Rental Store: 297 Points* + No Fees

That's a savings of at least 483 points! You take this trip twice and still have points to spare!

First, you will work with one of our swap advisors to plan your cruise, adventure, etc. Let's say that trip ends up costing $5,000. You will then rent points to pay down this balance owed for your swap. If your points are paid out at $18 per point, you'd be looking at renting 278 points to pay for this trip. Not looking to rent that many? That's the other beauty of it - we require you to rent/swap a minimum of 100 points, but after that, you can pay for the remainder of the trip in cash if you would wish to do so.

Regarding the tax implications, @CarolMN was pretty spot on in her answer. This is viewed as an equal exchange and thus not subject to taxes. You will not receive a 1099 from DVCRS for points swapped, which allows you to harness the full $16 or $18 per point value without needing to set some aside for tax purposes.

You can learn more about all of our swap programs at DVC Rental Store via this link: https://dvcrentalstore.com/members/dvc-point-swap-programs/

Let me know if you have any further questions or concerns, and I would be happy to help!

Honestly curious what IRS code section is relied on for this opinion?

Just a quick search seems like this could be grey-er area.

Also, isn't money actually being exchanged in this transaction? It just never goes directly to the point owner as it goes to pay the cruise fees?

"Bartering and trading? Each transaction is taxable to both parties

Sometimes, when the right opportunity presents itself, you may be able to pay for goods and services that you need or want by trading goods that you own, or providing a service that you can perform in return. An example of this is if you own a lawn maintenance company and receive legal services from an attorney and pay for those services by providing an agreed upon amount of mowing and maintenance services at the attorney’s home or place of business. In this scenario, the fair market value of the legal services provided is taxable to you as the lawn maintenance company owner. At the same time, the fair market value of the lawn and maintenance services you provide is taxable to the attorney or his firm.

This type of transaction — bartering or trading — can prove to be useful when cash-flow problems would otherwise prevent you from securing needed goods or services. And, while there is no exchange of cash or credit, the fair market value of the goods or services that were exchanged is taxable to both parties and must be claimed as other income on an individual or business income tax return.

Remember, just like payments made with money, if a business makes payments of bartered services to another business (except a corporation) of $600 or more in the course of the year, these payments are to be reported on Form 1099-MISC."
https://www.irs.gov/pub/irs-utl/OC-...achtransactionistaxabletobothpartiesFINAL.pdf

 

[pianomanzano]

Hey Everyone!

As the Member Relations Supervisor for our Swap Program at DVC Rental Store, I'm happy to shed a bit more light on this situation!

Swapping your points with DVCRS provides you significant savings as compared to exchanging your points directly with DVC for a cruise or adventure.

Let's take this trip for example: 7-Night Alaskan Cruise, on Disney Wonder, Departing August 22, 2022 (2-person booking)

• Direct through Disney: 780 Points + $95 Fee
• Swapping Your Points w/ DVC Rental Store: 297 Points* + No Fees

That's a savings of at least 483 points! You take this trip twice and still have points to spare!

First, you will work with one of our swap advisors to plan your cruise, adventure, etc. Let's say that trip ends up costing $5,000. You will then rent points to pay down this balance owed for your swap. If your points are paid out at $18 per point, you'd be looking at renting 278 points to pay for this trip. Not looking to rent that many? That's the other beauty of it - we require you to rent/swap a minimum of 100 points, but after that, you can pay for the remainder of the trip in cash if you would wish to do so.

Regarding the tax implications, @CarolMN was pretty spot on in her answer. This is viewed as an equal exchange and thus not subject to taxes. You will not receive a 1099 from DVCRS for points swapped, which allows you to harness the full $16 or $18 per point value without needing to set some aside for tax purposes.

You can learn more about all of our swap programs at DVC Rental Store via this link: https://dvcrentalstore.com/members/dvc-point-swap-programs/

Let me know if you have any further questions or concerns, and I would be happy to help!

Thanks for the info! Watched the most recent world of dvc vlog and they mentioned a 50 point credit for swaps for past buyers. Any idea on how long that promo will run?

 

[CarolMN]

@Jgc014, you could be correct. I can't cite a section of IRS code for back up.

But DVC does the same thing when Members use points for something other than a stay at a DVC resort. It rents a DVC stay to someone for cash and then uses the proceeds to pay for the Member's cruise or other chosen option. It even takes a "cut" of the rental proceeds to compensate for handling the transaction. Members don't have any income tax liability for choosing to spend points on a non-DVC option when MS handles the transaction, so I don:t see how using a broker to do the same thing is different. Brokers just don't take as big a "cut" to handle it.

 

[LYSE]

Honestly curious what IRS code section is relied on for this opinion?

Just a quick search seems like this could be grey-er area.

Also, isn't money actually being exchanged in this transaction? It just never goes directly to the point owner as it goes to pay the cruise fees?

"Bartering and trading? Each transaction is taxable to both parties

Sometimes, when the right opportunity presents itself, you may be able to pay for goods and services that you need or want by trading goods that you own, or providing a service that you can perform in return. An example of this is if you own a lawn maintenance company and receive legal services from an attorney and pay for those services by providing an agreed upon amount of mowing and maintenance services at the attorney’s home or place of business. In this scenario, the fair market value of the legal services provided is taxable to you as the lawn maintenance company owner. At the same time, the fair market value of the lawn and maintenance services you provide is taxable to the attorney or his firm.

This type of transaction — bartering or trading — can prove to be useful when cash-flow problems would otherwise prevent you from securing needed goods or services. And, while there is no exchange of cash or credit, the fair market value of the goods or services that were exchanged is taxable to both parties and must be claimed as other income on an individual or business income tax return.

Remember, just like payments made with money, if a business makes payments of bartered services to another business (except a corporation) of $600 or more in the course of the year, these payments are to be reported on Form 1099-MISC."
https://www.irs.gov/pub/irs-utl/OC-...achtransactionistaxabletobothpartiesFINAL.pdf

I am curious as well...but now I'm also more curious to know how many people are that honest on their taxes!

 

[Jgc014]

@Jgc014, you could be correct. I can't cite a section of IRS code for back up.

But DVC does the same thing when Members use points for something other than a stay at a DVC resort. It rents a DVC stay to someone for cash and then uses the proceeds to pay for the Member's cruise or other chosen option. It even takes a "cut" of the rental proceeds to compensate for handling the transaction. Members don't have any income tax liability for choosing to spend points on a non-DVC option when MS handles the transaction, so I don:t see how using a broker to do the same thing is different. Brokers just don't take as big a "cut" to handle it.

And honestly, I haven't researched it enough to advise definitively either. However, if I was going this route, I would want more understanding of how it works before feeling comfortable.

The way I see it is if DVC Rental Store rents an owner's points, the renter pays DVC Rental Store, and then DVC Rental Store pays an amount to an owner based on that rental, it is pretty clear cut- the amount paid to the owner is reportable based on the US tax code.

And correct me if I am misunderstanding the process here - but in this case, DVC Rental Store again rents out an owners points, the renter again pays DVC Rental Store for the rental of these points, but this time instead of DVC Rental Store paying the owner, DVC Rental Store pays for a cruise on behalf of the owner. The only difference is the owner does not physically receive the money that can pay for the cruise themselves. But based on the Doctrine of Constructive receipt, even if the owner does not physically receive the funds, they are treated as having received the funds if they have the ability to control or utilize the funds. In this case, it seems like they do as they are directing the funds to be put towards a cruise of their choosing.

Therefore, I think it would be very generous of the IRS to say they are only going to tax in the first case, and not in the second case, and generally, I don't think of the IRS as generous.

 

[pkrieger2287]

Thanks for the info! Watched the most recent world of dvc vlog and they mentioned a 50 point credit for swaps for past buyers. Any idea on how long that promo will run?

This promotion will be running through the end of the year!

 

[pkrieger2287]

Honestly curious what IRS code section is relied on for this opinion?

Just a quick search seems like this could be grey-er area.

Also, isn't money actually being exchanged in this transaction? It just never goes directly to the point owner as it goes to pay the cruise fees?

"Bartering and trading? Each transaction is taxable to both parties

Sometimes, when the right opportunity presents itself, you may be able to pay for goods and services that you need or want by trading goods that you own, or providing a service that you can perform in return. An example of this is if you own a lawn maintenance company and receive legal services from an attorney and pay for those services by providing an agreed upon amount of mowing and maintenance services at the attorney’s home or place of business. In this scenario, the fair market value of the legal services provided is taxable to you as the lawn maintenance company owner. At the same time, the fair market value of the lawn and maintenance services you provide is taxable to the attorney or his firm.

This type of transaction — bartering or trading — can prove to be useful when cash-flow problems would otherwise prevent you from securing needed goods or services. And, while there is no exchange of cash or credit, the fair market value of the goods or services that were exchanged is taxable to both parties and must be claimed as other income on an individual or business income tax return.

Remember, just like payments made with money, if a business makes payments of bartered services to another business (except a corporation) of $600 or more in the course of the year, these payments are to be reported on Form 1099-MISC."
https://www.irs.gov/pub/irs-utl/OC-...achtransactionistaxabletobothpartiesFINAL.pdf

I'm obviously not an accountant and cannot give any official tax guidance. We would recommend that you consult your tax professional if you have concerns.

What I can tell you is that we've invested a lot of time and research into this process and would not be taking the direction we are without feeling that it represents the proper manner to handle these transactions. Owners that elect to utilize our point swap programs will not be receiving a 1099 for those rentals as we believe that is the proper manner of handling that exchange.

It is the same process that Disney is utilizing at the end of the day in allowing the use of points for various other things like cruises, ABD's,etc. It is also the same type of process that allows them to utilize Interval International as an exchange partner.

 

[fitnessmouse]

I'm obviously not an accountant and cannot give any official tax guidance. We would recommend that you consult your tax professional if you have concerns.

What I can tell you is that we've invested a lot of time and research into this process and would not be taking the direction we are without feeling that it represents the proper manner to handle these transactions. Owners that elect to utilize our point swap programs will not be receiving a 1099 for those rentals as we believe that is the proper manner of handling that exchange.

It is the same process that Disney is utilizing at the end of the day in allowing the use of points for various other things like cruises, ABD's,etc. It is also the same type of process that allows them to utilize Interval International as an exchange partner.

Is the cruise swap program also available to international dvc owners? (Without the need for itin)