| The question is often, can you get a tax write off | | | | 1.) What do the majority of similar timeshares sell for |
| for donating your timeshare. The answer is YES! | | | | in the open market. Think about this for a moment. |
| The first concern is where you live and what taxes | | | | The majority are sold by the resort, therefore their |
| you pay. Each country handles donations differently | | | | sale price along with what you willingly paid for it |
| and don't expect anyone here to advise you on your | | | | establishes FMV. |
| place of residence. Beyond that, there is a LOT | | | | 2.) What is the rental income determine as an |
| MORE to tax credit for donations than most people | | | | investment if it was bought for that purpose (doesn't |
| understand. | | | | apply here). |
| First, there are a few things you need to consider. | | | | 3.) What would it cost you to replace the timeshare |
| 1. The write off is against your income like an other | | | | on the open market. Again, think. You would probably |
| deduction, not a tax credit. | | | | have to go to the resort and pay their retail price. |
| 2. You have to find a non-profit organization (NPO) | | | | Therefore, if your unit is NOT sold, the FMV can be |
| willing to accept your timeshare. | | | | fairly and legally established as the price close to the |
| 3. You have to be careful how your timeshare is | | | | retail price currently at the resort. That value is then |
| evaluated. | | | | your deduction. The difference can be literally |
| Let me give you a little background. I work with a | | | | thousands of dollars difference. This would give you |
| NPO that does accept timeshares. So I have a fair | | | | $10,000 in deduction credit. In a 25% tax bracket, |
| idea of what I'm talking about. | | | | that's worth over $2,000 more in your pocket! |
| When you attempt to donate your timeshare you will | | | | One difference between the two (there are |
| often find that the NPO puts you together with a | | | | variations) is that the first may deduct the costs of |
| broker who actually sells your timeshare for | | | | closing and commissions from your credit but they |
| whatever they can get for it. The NPO doesn't take | | | | don't usually charge you anything else. The second |
| title except at the very last second in a double | | | | may charge you a fee or ask for an additional |
| closing so you are donating it to them while they are | | | | donation since they are NOT selling the timeshare. |
| selling it to someone else. When that is done, you | | | | Consider what you get back at tax time to see |
| face a few hurdles. Some timeshares at some | | | | which gives you more money. Both get you out of |
| resorts NEVER sell and those will be rejected outright | | | | your further lifelong financial obligations. |
| by the NPO. Until the broker sells it you continue to | | | | Two questions often arise. 1. How can the NPO take |
| be responsible for all fees. When it is sold, a value is | | | | over the financial obligations and continue in business? |
| established which can't be argued with. "Your" | | | | That is a business trade secret, but I can tell you |
| timeshare was only worth what someone actually | | | | they often work our something with the resort to |
| paid for it, therefore according to the IRS you can | | | | retire the unit. 2. Isn't there a $5,000 limit on |
| only deduct the amount that was actually received. | | | | timeshare donations? NO!! I've read this many, many |
| Even if you have an appraisal, it doesn't matter. Even | | | | places EXCEPT from anything from the IRS. Their |
| if the NPO takes title and holds on to the timeshare | | | | only response is to review two publications - Pub. 561 |
| for awhile, if they do sell it, they are required by law | | | | Fair Market Value Determination and Pub. 526 |
| to notify you if the sale price is different than the | | | | Contributions. First of all, the $5,000 limit makes no |
| credit they gave you so you can adjust your future | | | | sense. It's like saying your car isn't worth the same |
| income deductions up or (more likely) down to | | | | as one on the dealers lot because you can find it |
| coincide with the real sale price. If you have a | | | | cheaper on eBay. Baloney, That's what Kelly's Blue |
| $10,000 timeshare you could get only $1,500 in | | | | Book is for - everyone and it's based on sales |
| deduction credit. | | | | completed, not prices offered. Regardless of the |
| The NPO I work with does it differently and you | | | | difficulty, you have just as much right to sell at the |
| may find some others that do this, also. The NPO | | | | same price as the resort does and unless you prove |
| takes title now and NEVER sells it. As such they are | | | | otherwise by selling it for less, the IRS says to use |
| required by the IRS to find the Fair Market Value | | | | at least one of the three methods above to |
| (FMV) based on one of three methods dictated by | | | | compute FMV. |
| the IRS. | | | | |