Tax question on owning at 2 resorts

[deerh]

Hi all, I own at Boardwalk, and am considering buying at HHI. I am financing the Boardwalk now, and using the tax deduction for a second home. My question-If I buy at HHI, can I also claim that as a deduction if I decide to finance HHI? DEAN-Maybe you can answer this question for me, since you are the guru of timeshares, you may have not financed your purcahses however, but any help would be apprecieated!
Also, does anyone out there think the MB program at HHI is worth it? And also is the deal there correct-I called Susan Schell at HHI, and she said buy back at $10 per point, no limit? Is this still the case? I called here a while back, so I don't know if this is true or not.
THANKS for the help, you guys are great, as always!!!!
deerh

 

[WebmasterDoc]

The Magical Beginnings incentive is still $10 per point at HH and at VB. 50 point minimum.

You should probably check with your tax advisor about the mortgage deduction.

If you do it through DVC- you may be able to just list it as "DVC"- 2nd mortgage on your return, but should still check with your CPA to confirm.

 

[Debby7]

I was told that we may claim the first contract-OKW but not our add on at HH as that is technically a 3rd home. Also on my year end statement from DVC they are listed separately.

 

[DVCDAVE]

DEERH, I don't think you will have any problem with the tax deductability. DVC will treat the second purchase as an add-on, not a second purchase. You will even have the same use year. Even though you will sign additional paperwork, your contract # will be the same, BUT the second purchase will have a suffix ".001". Your exisiting contract has a suffix ".000". Your membership number, of course will remain the same. Further, the direct debit to your bank account is treated as one debit for the loan, and one debit for the dues, combined for both resorts. It will be very difficult for the IRS to have any info representing this as two homes, and not one.

This would not be the case if you didn't buy direct from DVC.

 

[Caskbill]

Deerh, the IRS allows deduction of mortgage interest on your primary residence, and ONE additional residence. Note that the additional residence could be a 2nd mortgage on your home, a home equity loan, or a vacation home such as DVC. If you purchased DVC under another new loan, it would become the 3rd property and thus not deductible. This could happen if you bought resale and financed through a new lender, or maybe added a home equity loan to pay for the purchase.

As stated however, if you purchased additional points at any resort, but kept it under the same original contract, then it is not a third mortgage, but simply a larger 2nd mortgage. This would be similar to putting an addition onto your house, then refinacing the whole house to pay for it under one new mortgage payment. In this case, all the interest is deductible when you itemize your income tax.

Note that the money paid for real estate taxes is deductible regardless of any qualification of mortgage interest being deductible. You could own 10 different properties, and the real estate taxes are all deductible, but if you had separate mortgages on each one, only two at a time are deductible. (And one of those must be your primary residence).

Thus, if you finance this as an add-on through Disney, you will only have one payment to DVC so you would show this on your income tax as your second deductible mortgage. When you got to the taxes paid, you would list them separately, for example, your regular home's taxes, then BWV taxes, then HH taxes, as I believe you would have separate statements as to the actual taxes paid at each resort. If Disney combined your taxes on a single statement, then you would simply use the combined reported amount on your tax form.

 

[DVCDAVE]

Quote: "This would not be the case if you didn't buy direct from DVC."


The context in which I made this statement is that I know that if you bought resale, DVC will not treat this as an add on, but rather as a whole seperate contract. And of course they will not do the financing on it, so the direct debit option, and combining the debit is meaningless.

 

[deerh]

Thanks for all the answers guys! I guess I will treat as 1 second mortgage, as was indicated. Just waiting to buy HHI, I hear they are 80% sold out, so I will decide soon.
Stay tuned!
deerh