I believe that the real estate taxes are deductible, however taxes are just a fraction of your DVC dues. Most of the dues are for operating budget and then capital reserves, which are not deductible. So unless you have a boat load of points your taxes are only going to be a few hundred dollars unlike a couple thousand dues can cost - not going to make much of a difference tax wise. Now a loan on the points is a different matter.
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Seriously considering DVC with a few questions...
- Thread starter dkosdros
- Start date
Phonedave
Well-Known Member
You can deduct both interest on the loan (if you have one) and it is your second (or first) real estate holding.
You can also deduct your property taxes (as taxes paid to another district)
However, it all has to work out - the amounts have to be high enough, etc. You need to have enough deductions to make itemizing worth more than the standard deduction.
In reality, even if you can claim the dedcution(s) the amount you save on your taxes is minimal.
-dave
You can also deduct your property taxes (as taxes paid to another district)
However, it all has to work out - the amounts have to be high enough, etc. You need to have enough deductions to make itemizing worth more than the standard deduction.
In reality, even if you can claim the dedcution(s) the amount you save on your taxes is minimal.
-dave
Phonedave
Well-Known Member
I own at SSR and the only time I ever regret it is during F&W. If I am going during Food and Wine I wish I owned at an EPCOT resort, just so i have the easy walk to EPCOT. Other than that, staying at SSR is fine with me, I enjoy the lower point cost and dues, and I enjoy being able to book the treehouses 11 months out (I got one for June 2014 already)
-dave
GoofGoof
Premium Member
You should consult with a tax advisor before taking any of these deductions if you are not sure.
With your purchase of DVC you own deeded property. Your annual dues statement includes a breakdown of what the dues are for. The portion for real estate taxes is deductible on schedule A as Real Estate taxes if you itemize. As far as I know DVC will not send you a 1098 listing the real estate taxes paid (I have never gotten one), but the IRS does not require it either.
If you have a morgage on your DVC purchase which has your DVC ownership as collateral for the loan you can deduct the interest on your tax return provided you are not already deducting interest for a second home. You are limited to your primary home and 1 secondary or vacation home. if you take out a personal loan to pay for DVC the interest is not deductible. You should receive a 1098 for your mortgage interest.
If you don't believe me, direct from the IRS:
Publication 936 - Main Content
Part I. Home Mortgage Interest
This part explains what you can deduct as home mortgage interest. It includes discussions on points, mortgage insurance premiums, and how to report deductible interest on your tax return.
Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan.
You can deduct home mortgage interest if all the following conditions are met.
- You file Form 1040 and itemize deductions on Schedule A (Form 1040).
- The mortgage is a secured debt on a qualified home in which you have an ownership interest. Secured Debt and Qualified Home are explained later.
You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that:
- Makes your ownership in a qualified home security for payment of the debt,
- Provides, in case of default, that your home could satisfy the debt, and
- Is recorded or is otherwise perfected under any state or local law that applies.
Debt not secured by home. A debt is not secured by your home if it is secured solely because of a lien on your general assets or if it is a security interest that attaches to the property without your consent (such as a mechanic's lien or judgment lien).
A debt is not secured by your home if it once was, but is no longer secured by your home.
Qualified Home
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.
Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
Second home. A second home is a home that you choose to treat as your second home.
Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year.
Second home rented out. If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. If you do not use the home long enough, it is considered rental property and not a second home. For information on residential rental property, see Publication 527.
More than one second home. If you have more than one second home, you can treat only one as the qualified second home during any year. However, you can change the home you treat as a second home during the year in the following situations.
- If you get a new home during the year, you can choose to treat the new home as your second home as of the day you buy it.
- If your main home no longer qualifies as your main home, you can choose to treat it as your second home as of the day you stop using it as your main home.
- If your second home is sold during the year or becomes your main home, you can choose a new second home as of the day you sell the old one or begin using it as your main home.
- Time-sharing arrangements. You can treat a home you own under a time-sharing plan as a qualified home if it meets all the requirements. A time-sharing plan is an arrangement between two or more people that limits each person's interest in the home or right to use it to a certain part of the year.
Second home rented out , earlier, for the use requirement. To know whether you meet that requirement, count your days of use and rental of the home only during the time you have a right to use it or to receive any benefits from the rental of it.
GoofGoof
Premium Member
Yep. BLT real estate taxes were $0.0137 per point so not worth even discussing.
Did you stay at a Holliday Inn Express last night?
toolsnspools
Well-Known Member
There's just something wrong about a guy with a Goofy avatar giving you tax advice....
lostpro9het
Well-Known Member
Wrong.......or genius?There's just something wrong about a guy with a Goofy avatar giving you tax advice....
There's just something wrong about a guy with a Goofy avatar giving you tax advice....
Goofy and the Federal Tax Code .... they kind of go hand and hand.
GoofGoof
Premium Member
There's just something wrong about a guy with a Goofy avatar giving you tax advice....
It beats listening to that guy with the question mark suit from the infomercials.
Now I'm curious, how do you deduct DVC as a business expense? Do you let clients use points? Or, do you donate points to charity? I always thought about, if I can't for some reason use my points in a given year, donating the points (Make-a-Wish comes to mind) instead of selling them.
GoofGoof
Premium Member
It's sorta like writing off a home office expense. If you use your DVC room while in O town for work then it can be deductible. I have seen many people claim a vacation as a business expense. They write off air, hotel and even meals. Even if you are not directly working If you attend a conference or training in Orlando it usually qualifies. The grey area is you are supposed to reduce your deduction by the amount related to personal use. If you go to Orlando for a 2 day conference but stay a week you can technically only deduct expenses for the days you are working. In practice most people deduct the whole thing.
Yeah, that's it.
From the research I did GoofGoof it is only tax deductible if you take our a 2nd mortgage and then the 2nd mortgage is deductible. But if I just take out a 2nd loan or get financed through a company to pay for it, even through Disney directly, it isn't deductible. Please correct me if I am wrong? I am considering it and at this time am planning on not being able to deduct any of it. If this is true and I can then it will make the purchase that much more enjoyable.
I came up with some additional questions.
Are DVC members able to take advantage of the Dining Plan, Free or purchasing it, and if so how since you are not technically paying for a room?
Is there a list of restaurants that DVC members get discounts at? as well as a list that shows the % discounted. I just see it says at restaurants throughout WDW and discounts between 10-20%.
and what do people do about tickets? is there a DVC discount? or you just keep an eye out for ticket specials. My work gets a good discount from time to time but just curios to see what other DVC members do for their tickets. We most likely will be going once per year and on occasion might be able to do two times per year and would do a 5-7 day pass.
So far we are thinking we will go with 220 points at BLT. since the contract is way out, longer than most of the others except Hawaii which we wouldn't want as our home resort. We like the idea of being on/close to the monorail line. Walking distance of the MK with great views on one side of the lake and the other of the park. Dues seem reasonable, point prices seem doable on resale, and we can afford it. We will have to finance it but we should be able to pay it off before 10 years. We think as our kids get older they would enjoy BLT as well being on the monorail line and they can walk back and forth to the MK.
We decided on 220 points because it afford us easily 2 studio stays for a week each a year or 1 one bedroom stay a year, or 2 bedroom stay every other year and every 3 years a nice grand villa if we wanted to. its enough to use RCI for week stays if needed.
So those are my questions and that's our plan so far.
I came up with some additional questions.
Are DVC members able to take advantage of the Dining Plan, Free or purchasing it, and if so how since you are not technically paying for a room?
Is there a list of restaurants that DVC members get discounts at? as well as a list that shows the % discounted. I just see it says at restaurants throughout WDW and discounts between 10-20%.
and what do people do about tickets? is there a DVC discount? or you just keep an eye out for ticket specials. My work gets a good discount from time to time but just curios to see what other DVC members do for their tickets. We most likely will be going once per year and on occasion might be able to do two times per year and would do a 5-7 day pass.
So far we are thinking we will go with 220 points at BLT. since the contract is way out, longer than most of the others except Hawaii which we wouldn't want as our home resort. We like the idea of being on/close to the monorail line. Walking distance of the MK with great views on one side of the lake and the other of the park. Dues seem reasonable, point prices seem doable on resale, and we can afford it. We will have to finance it but we should be able to pay it off before 10 years. We think as our kids get older they would enjoy BLT as well being on the monorail line and they can walk back and forth to the MK.
We decided on 220 points because it afford us easily 2 studio stays for a week each a year or 1 one bedroom stay a year, or 2 bedroom stay every other year and every 3 years a nice grand villa if we wanted to. its enough to use RCI for week stays if needed.
So those are my questions and that's our plan so far.
EOD K9
Well-Known Member
You don't like Matthew Lesko?It beats listening to that guy with the question mark suit from the infomercials.
EOD K9
Well-Known Member
Yes, you can take advantage of the DDP. You of course have to pay. You are paying for the room for x amount of years, so no sweat.
There is a list in the Members Perks section of the website. They will tell you which ones, % discounted, and what meal, ie lunch, dinner.
The only ticket discount you get is for an Annual Pass. It is a really good one though. I did the math once and for it to be worth it, I need at least ten days in the parks in 365 days to pay for itself. DVC doesn't give any other ticket offers in that regard.
Thanks EOD K9. That is some good info. On the years we plan on doing the two trips per year @ 5 days each we will look into the Annual pass or if we plan a fall and then spring or summer trip it would be worth it then as well. It would be nice to be able to park hop even though currently we find a way to stay busy in each park for each full day. But going more frequent and with FP+ we may be able to better utilize park hopping to our advantage. Plus when our kids get older we can let them go to the parks they want as we do things we want at our pace.
I will check out the member perks section. I looked before and didn't see it so I must have overlooked it. And yea the pretty penny you pay for the room you would hope you have the cash around to pay for the dining plan. But I see if we frequent more often as we do that we will probably back off on cramming in so much in the parks and scale back and enjoy the rest of what WDW has to offer, which of course includes the dining. So if it works out to be cheaper for DDP one year than it is nice to know we can use it.
I will check out the member perks section. I looked before and didn't see it so I must have overlooked it. And yea the pretty penny you pay for the room you would hope you have the cash around to pay for the dining plan. But I see if we frequent more often as we do that we will probably back off on cramming in so much in the parks and scale back and enjoy the rest of what WDW has to offer, which of course includes the dining. So if it works out to be cheaper for DDP one year than it is nice to know we can use it.
GoofGoof
Premium Member
When you say 2nd mortgage do you mean a 2nd mortgage on your primary home (as in a home equity loan) or do you mean another mortgage as in you have a mortgage on your primary home and a separate mortgage on your vacation home? I would check with a tax professional if it is going to impact your decision. I do not personally have a loan on my DVC purchase so I have not deducted it myself, but the mortgage interest on a vacation property is deductible if its your 2nd home. You can't deduct for more than 2 homes. A mortgage on a timeshare can qualify for the deduction as long as the timeshare is used as collateral for the loan. I would assume that if you financed through Disney that you would have a mortgage with the timeshare as collateral. Maybe that's not the case. Maybe someone who has financed through Disney can clarify that. If you take a personal loan that is unsecured than it wouldn't qualify.