We are considering renting out our DVC points next year and I am trying to wrap my head around the tax implications for Canadians (any advice or experiences appreciated). As far as I can tell one option would be to let the broker company take 30% as a withholding tax and this would mean I would not have to file a tax return with the IRS. Does anyone know if David's will take the 30% withholding tax and file a 1042-S? I am assuming that even though David's is in Canada you would still be liable for US taxes as the 'rental property' itself is in the US.
When filing with the CRA I could claim the foreign tax credit to help offset some of that 30% expense plus I would be able to claim costs associated with the MF's. I think I like this route best as I would ideally like to avoid filing in the US.
I understand that one should also pay tax at the state level in Florida (Sales and Use Tax on Rental of Living or Sleeping Accommodations). Does anyone know if you did a point transfer as opposed to a specific reservation if you would still have to pay this tax?
It is nice to at least have an option to recoup MF costs but it really seems like you would be left with very little, if any, 'profit' after paying these three levels of taxes...
When filing with the CRA I could claim the foreign tax credit to help offset some of that 30% expense plus I would be able to claim costs associated with the MF's. I think I like this route best as I would ideally like to avoid filing in the US.
I understand that one should also pay tax at the state level in Florida (Sales and Use Tax on Rental of Living or Sleeping Accommodations). Does anyone know if you did a point transfer as opposed to a specific reservation if you would still have to pay this tax?
It is nice to at least have an option to recoup MF costs but it really seems like you would be left with very little, if any, 'profit' after paying these three levels of taxes...