Real Estate Tax Deduction Question

[JCW]

DH and I were getting ready for our appt. with our accountant for our 2006 tax return (the appt. is next week, but now I am curious about this).

Question:
Since we can only deduct Real Estate/Property taxes from our primary and one secondary/vacation home, if we own at BCV and AKV (which we do), will we only be able to deduct the RE tax for one of the DVC properties or because they are both under the same Master Contract, can we deduct the RE taxes from both?

I searched the IRS web site and found info on the deduction of RE taxes for primary and secondary homes, but I couldn't find anything that came close to answering my question (there weren't specifics on timeshares with master contracts or anything sounding remotely like that).

We will definitely ask our accountant (and this won't matter to us until we do our 2007 taxes) but I am very curious how others are doing this.

TIA.

 

[Dean]

I think you're confusing the interest deduction rules and the RE tax rules. You should be able to deduct all RE taxes plus interest on your home and POSSIBLY, interest on a second home depending. That second home MAY in some cases be a timeshare.

 

[barlitz]

Any real estate taxes should be deductable, and any interest from your second home (vacation home) should be deductable, I don't know if its possible but if you claimed your DVC as investmant property and not as a second home there could be other factors involved, depreciation, maintenance fees, possible rental income if you rent.
We own a second home, a boat and SSR and AKV, We can only claim the interest on our second home (vacation home) not on our boat or dvc. If we didn't own our Cape house we could claim our boat as a second(vacation) home. You can claim all taxes, real estate taxes and excise tax(boat or car, etc).This is all based on my past experiences in real estate and what my accountant has explained to me.

 

[JCW]

Ahhh , that makes sense. Thank you to both of you.

Yup, we were confusing the deduction rules on mortgage interest with the RE tax deduction. It all makes sense now.

I knew someone on this board would have an explanation for us.

Of course I will confirm with my accountant next week, but this explains why I couldn't find anything on the IRS site.

Thanks for the quick responses.

 

[Indybill]

I just bought DVC through a reseller so this will be a question for next year. Is there a break-down somewhere of how much the taxes are that you are paying as part of your annual maintenance fee? Thanks!

 

[WebmasterDoc]

I just bought DVC through a reseller so this will be a question for next year. Is there a break-down somewhere of how much the taxes are that you are paying as part of your annual maintenance fee? Thanks!

You will receive a breakdown of the actual taxes paid with your Annual Dues Statement at the end of the year. Our property taxes are estimated each year and any under/over is figured into the following year's amount owed.

Enjoy!