I think part of the argument is that if you were to be made whole for the missing points you should be compensated for them. Most of the brokers that have a rental side charge around $25 a point. If you wanted to get those missing points you would need to shell out $25 a point to rent them, with the inconvenience of someone else controlling the reservation
Agreed. The buyer is taking the risk with the purchase. We’ve already seen rental rates go down on the board sponsor…. who knows what happens if a trade war zaps peoples wallets of discretionary spending…..
I thought the argument was that is contract A has 2025 points and Contract B doesn’t then contract B should be worth at least $15 less per point.
I personally hate stripped contracts. You are paying a lot of money upfront for uncertain delayed gratification.
I keep wondering about this, as I haven't rented points. But for those of you who do, in terms of taxes, can't you write-off a prorated point price based on purchase (maybe $2 to $3 for resale points) plus the annual fees on each point for each point you rent?
I'm not so much asking for professional advice--note: I have not rented points--I'm just curios as to how people handle that. I'm guessing the income is 1099-ed. But I'm also guessing that nearly half of that can be written down through legit costs associated with purchasing and maintaining ownership of those points/resort. So I'm confused why people continually point to this as a huge hurdle to get over in terms of after-tax revenue. So if you rent points for $20--I'm guessing you can subtract out member fees on those points (let's say $8 each or so) and at least a prorated cost of purchasing the points (a new direct contract is $200 for about 50 years or $4 a point per use, a resale is 50% to 75% of that).That's probably a question for a tax accountant. Any advice you get here is likely worth the price you pay for it....
And after that clarification I'll add that I believe that if you were to do that (aka depreciation) you are reducing your cost basis annually and need to keep track of that because any eventual sale of the contract in the future will result in a higher capital gains tax that if you did not depreciate.
I assume you can deduct your costs involved just as you can with any other self produced income. I often point it out as a hurdle on the boards. Yes there will still be profit made since you only pay tax on profit, but it lessens my profit 35% since that is my tax bracket, then as with any tax write offs you open yourself up to an audit. To me it’s just not worth it. However, I would 100% rent out points before I let Disney keep them, I would not on the other hand buy a contract with the intent of creating my own MB via renting points.
