posted 06-01-2005 12:35               

So.... when we sell our timeshare (at a loss) can we deduct the lost on our tax return.

Since I'm almost sure we'd have to declare a profit should we sell for a gain... I feel we should be able to declare a loss.

posted 06-02-2005 05:38               

However, keep in mind that the tax deduction for making a donation would be equal to fair market value. Fair market value in your hands is the amount that you could sell it for to a willing buyer. That means the resale value, not an inflated developer sales price.

Thus, assuming an honest approach, selling should mean more in your pocket than donating. By way of example, assume you can sell a timeshare for $4,000 and that you are in the top (35%) federal tax bracket. If you sell, you'll have $4,000, perhaps reduced by selling costs of, let's say, $500, for a net of $3,500. If you donate, you'll save $1,400 (35% X $4,000). If the donor's state of residence allows charitable donation tax deductions, that could alter the results, but not by much.

Normally, I would say that $3,500 in my pocket is worth more than $1,400 any day. However, charitable motives might offset that and make the donation personally rewarding.

posted 06-02-2005 10:59               

quote:

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Originally posted by Dave M:
...assuming an honest approach, selling should mean more in your pocket than donating.

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I generally agree. I think the exception is where you purchased the Week cheap, say for something like $1,500 2 or 3 years ago and it looks like it might sell for around $500. Personally, I would donate it to charity; use $1,500 as my deduction; save the selling costs; and have less hassle. Number One, I doubt that the IRS would even look at the deduction and Number Two, if they did, I doubt that they would challange the valuation. But then I'm no tax accountant either.

The place where this works best is where the selling costs and the selling price are pretty close.

posted 06-02-2005 16:16               

quote:

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Originally posted by Dave M:
You can get some answers to the donation question in the tax article from the Advice section...... However, keep in mind that the tax deduction for making a donation would be equal to fair market value...........

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Thanks Dave M !
Very concise answer

posted 06-02-2005 22:58               

Actually the above was not really my point which I obviously didn't state very well. What I was trying to say is that the tax recoupment from donating low priced weeks to charity may well approach the proceeds from a sale when you take into account (1) the time value of money; (2) selling costs; and (3) possibly laying out another MF which actually may equal 33%, 50% or maybe even 100% of the value of the week.

posted 06-03-2005 21:20            

IMO, if one is going to get creative with the tax code, there are many less obvious ways to do it. Unless one is talking big bucks, personally, I don't think it's worth the risk. I've seen business colleagues die fighting big brother over taxes. Money is a cruel master.