Do I Have To Pay Taxes When Renting My DVC Points?

[pkrieger2287]

Thinking about renting your Disney Vacation Club points? Join us as we explore what taxes are associated with renting your DVC points and how to maximize the value of your contract!

Do I Have To Pay Taxes When Renting My DVC Points?

Had experience taxes when renting your DVC points? Please share your story and thoughts with us in the comments!

 

[Olaf Myfrenzargay]

Renting from Davids (Based in Canada), no.

 

[pkrieger2287]

Renting from Davids (Based in Canada), no.

That is inaccurate and is covered within the article. If you rent with David's this does not remove the requirement you have to report earnings to the IRS and pay taxes on your rental.

 

[Yinn]

then why’d you ask

I think it's one of those lead in, attention grabbing headlines......

The article is an important one. David's doesn't issue a 1099, but that doesn't mean taxes aren't due. It's like the debate as to whether you needed to pay sales tax if you bought something on the internet....(ps the answer is yes, you're supposed to)

 

[Travel60]

Yes.

 

[pkrieger2287]

I think it's one of those lead in, attention grabbing headlines......

The article is an important one. David's doesn't issue a 1099, but that doesn't mean taxes aren't due. It's like the debate as to whether you needed to pay sales tax if you bought something on the internet....(ps the answer is yes, you're supposed to)

100%

 

[CarolMN]

Those who rent owe taxes on the rental. Those who choose not to report the income, risk the consequences if they get caught.

Brokers based in the United States are required to issue 1099s and report the revenue to the IRS. Non-US brokers are not required to issue 1099s, but the individual still owes the taxes and is required to report the income. There are Florida State & County lodging/sales taxes due as well as federal and state income taxes due.

 

[drusba]

My understanding is that you can claim the timeshare under a "vacation home" exception to avoid any federal taxes. However, to have the income fall within that exception requires two things: (a) the total rental time must be for 14-days or less in the calendar year (usually easily met with a timeshare), AND (b) you or your family actually stay in the timeshare at least 15 days of the year (for many difficult to meet with a timeshare). Also, state's have their own tax rules.

 

[pkrieger2287]

My understanding is that you can claim the timeshare under a "vacation home" exception to avoid any federal taxes. However, to have the income fall within that exception requires two things: (a) the total rental time must be for 14-days or less in the calendar year (usually easily met with a timeshare), AND (b) you or your family actually stay in the timeshare at least 15 days of the year (for many difficult to meet with a timeshare). Also, state's have their own tax rules.

This is known as the "Augusta Rule" I believe. From my research and past posts on the boards, this was specifically designed for the Masters Golf Tournament and does not apply to timeshares.