timeshare forfeiture & taxes

[Thom Junior Member Find all posts View Profile Close Thom]

Hi all ....just wanted to let people know that if u forfeit your timeshare , there is a tax form you will get to go on your taxes. Without going into great detail ,which i really dont know , I have already learned that you will need a record of every cent spent on the timeshare. There is apparently some sort of formula the IRS uses and you may be able to deduct some timeshare cost off your taxes, up to $3,000 per year, if you meet certain criteria. I'm currently trying to collect 13 yrs of financial data for submission to the IRS. Please talk to your tax guy if you are thinking of voluntarily giving up your timeshare. I brought legal action against my timeshare and won my release from it. You CAN get released from your timeshare. It'll cost ya some legal fees, unless you try do it yourself. Don't let timeshare ppl tell ya different. I'll update this post as info becomes clearer.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

I don't know where you got that information, but I doubt there is any deduction unless the timeshare was solely used for rentals.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Pure BS

(maybe not pure)

[ronparise Senior Member Find all posts View Profile Close ronparise]

Id like to see more detail on this I cant imagine what the annual deduction might be for.. and Id like to learn

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

There is apparently some sort of formula the IRS uses and you may be able to deduct some timeshare cost off your taxes,

Here, I found the formula: Take the amount you have spent on the timeshare from the amount you have spent on the timeshare, and that is your deduction.

More seriously, for the more serious viewers, if you hold them strictly for business purposes (you rent them out, or flip them), you can deduct your costs (maintenance fees, for instance) from your income to determine your profit or loss.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Here's some interesting information . . . saying a timeshare you own to rent, and never use personally, can only be considered "rental only" dependent on what the other owners of the same unit do???!!!

"Rental Only Timeshares

A timeshare will qualify as a rental only timeshare if (1) it is rented at fair market value to unrelated parties for 15 days or more during the year, and (2) the owners do not personally use the timeshare for more than 14 days per year or 10% of the total days rented, whichever is greater.
When determining the rental and personal use days for the 15, 14, and 10% cutoffs, you must include the combined use of all the owners of the timeshare unit. The result is that personal use by any owner of a timeshare is considered personal use by all of the owners—for example, if you use your timeshare zero days, but the other owners use it 300 days, you have 300 days of personal use. This makes it virtually impossible for you to satisfy the fewer-than-15-days or 10% personal use tests. For this reason, few timeshares that are rented are classified as rental only timeshares.

If a timeshare does qualify as rental only, losses incurred on its sale are deductible."

http://www.nolo.com/legal-encycloped...hare-sale.html

This would make it virtually impossible to own timeshares for rental purposes.

(I did not find this. I did not read this. I did not post this.)

[rapmarks Moderator Find all posts View Profile Close rapmarks]

And then if you are not a real estate professional, your rental loss is zero if you are above a certain income level.


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[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

"A special rule lets you deduct up to $25,000 of losses from rental real estate in which you actively participate. The $25,000 deduction is phased out when your modified adjusted gross income is from $100,000 to $150,000, resulting in no deduction above $150,000 (for a married filing joint return).Apr 1, 2014
Tax Q&A: Why can't I deduct my rental property losses? - USA Today
www.usatoday.com/story/money/personalfinance/2014/04/...rental...losses/7154811/"

[rapmarks Moderator Find all posts View Profile Close rapmarks]

Yep


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[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Yep, except that in order for timeshare to be considered a rental property, almost all of the other owners of the same unit would have to also use their week as rental property, per Post 6, if it is true.

I have voted that it's not.

[easyrider Senior Member Find all posts View Profile Close easyrider]

I doubt that many multiple timeshare owners report earnings on renting these out so it would by unlikely most could get a business deduction.

[ronparise Senior Member Find all posts View Profile Close ronparise]

I doubt that many multiple timeshare owners report earnings on renting these out so it would by unlikely most could get a business deduction.

Regarding earnings, those of us that do a lot of rentals dont do it to lose money, For me its a simple matter of laying rental income against expenses. I lose money on some rentals, I make money on some and I break even on some. If at the end of the year I made some money its my responsibility as a citizen to report the income and pay taxes. Whether or not I do has nothing to do with this discussion

I think this discussion has to do with the money made or lost on the purchase and sale of a timeshare. Im no tax guy and I dont have any experience with selling anything at a loss, but I dont think you can claim a loss on the sale of a timeshare any more than you can claim a loss on the sale of your home or car or any other personal property

I did however report a gain on what I sold last year

[bnoble Senior Member Find all posts View Profile Close bnoble]

Here's an article that goes into some of the basics. The short version: probably not.

http://tug2.net/timeshare_advice/TUG...imeshares.html

[easyrider Senior Member Find all posts View Profile Close easyrider]

Ron, my point is that unless the timeshares were a source of income as outlined by the IRS I don't see any way to get a tax write off as a loss. It is unlikely that most timeshares have a market value that is high enough to take a loss if you get rid of them. I guess the costs to get rid of them could be a write off. Your a broker so maybe you know, can we deduct the costs of selling your own timeshares and can these costs be inflated to provide a decent deduction ?

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Ron, my point is that unless the timeshares were a source of income as outlined by the IRS I don't see any way to get a tax write off as a loss. It is unlikely that most timeshares have a market value that is high enough to take a loss if you get rid of them. I guess the costs to get rid of them could be a write off. Your a broker so maybe you know, can we deduct the costs of selling your own timeshares and can these costs be inflated to provide a decent deduction ?

If the information in Post 6 is accurate, there are not Rental-Only Timeshares:

"When determining the rental and personal use days for the 15, 14, and 10% cutoffs, you must include the combined use of all the owners of the timeshare unit."

OTOH, if you bought a timeshare for the purpose of flipping it, and wound up holding it for a few years, you would figure in fees and rental income to determine the basis, and then compute capital gain or loss when you sold it (Schedule D), as opposed to doing a Schedule E each year.

Come to think of it, this is pretty close to what the OP was saying in the OP.