Donating time share

[Gail in Virginia]

Client called yesterday and wants to know how much of a tax deduction she can get if she donates three fixed weeks with Wyndham Resorts to a charity (if she can find a charity that will take it.) Her motive is not charitable -she wants to get out of obligation for paying maintenance fees and taxes on the properties. Properties were purchased by her father many years ago, and he gave them to her shortly before he passed away since he was no longer able to travel and use them.

My reaction is that if there is no market for selling them, the FMV is 0 and there will be no deduction. Anybody have a different take on this, or know where to look to find out more?

[Jack from Ohio]

Client called yesterday and wants to know how much of a tax deduction she can get if she donates three fixed weeks with Wyndham Resorts to a charity (if she can find a charity that will take it.) Her motive is not charitable -she wants to get out of obligation for paying maintenance fees and taxes on the properties. Properties were purchased by her father many years ago, and he gave them to her shortly before he passed away since he was no longer able to travel and use them.

My reaction is that if there is no market for selling them, the FMV is 0 and there will be no deduction. Anybody have a different take on this, or know where to look to find out more?

I agree with you 100%.

[rfassett]

I agree with your analysis but not the facts. Google Wyndham Resorts resale and you will this that there is a very active market for re-selling time shares. I would not assume the FMV is zero. Further, you might encourage her to pursue selling. This gets her completely out of the taxes and maintenance fees and cash is ALWAYS better than a tax deduction.

[jainen]

>>if there is no market for selling them, the FMV is 0 and there will be no deduction<<

I agree with your conclusion, but not your reasoning. It's not the value, but the fact that she continues to own the property. According to Pub 526, "A contribution of the

right to use property is a contribution of less than your entire interest in that property and is not deductible."

[Gail in Virginia]

>>if there is no market for selling them, the FMV is 0 and there will be no deduction<<

I agree with your conclusion, but not your reasoning. It's not the value, but the fact that she continues to own the property. According to Pub 526, "A contribution of the

right to use property is a contribution of less than your entire interest in that property and is not deductible."

She is not talking about contributing just the right to use them, but her entire interest.

[Jack from Ohio]

The resale market for timeshares is very depressed. Many are going for pennies on the dollar compared to original cost. Tell her to sell it outright and donate the funds. No IRS problems that way.

[rfassett]

The resale market for timeshares is perpetually depressed just by its nature. Very few people buy timeshares as an investment. So when they are selling, it is either a fire sale mentality or an inherited and I do not want the headaches mentality. I once had a client in the resale business and I was astounded at the prices he was paying for these things just so the owner could get out of the maintenance and tax fees. Point is though, the FMV is not necessarily zero.

[jainen]

>>not talking about contributing just the right to use them, but her entire interest<<

Sorry, I just saw "three fixed weeks." Well, if she wants more than $5000 she needs to attach a qualified appraisal to the return, so that should settle the matter.

[Guest Taxed]

Where is her timeshare?

[Gail in Virginia]

I think it is a golf community in the Tennessee smoky mountains. I really didn't ask for a lot of details.

[Guest Taxed]

It would have better marketability if it were near water!

Has she tried listing them on the various internet brokerage services?