| ople are under the misconception that sales of | | | | home is the only other deductible mortgage you have. |
| timeshare property are not subject to income tax. The | | | | Not every timeshare loan will qualify as a mortgage |
| truth is, they are. Timeshare sales are treated the | | | | because timeshare loans are primarily consumer loans. |
| same way as sales of any other kind of real estate. A | | | | You also have to remember that interest on several |
| timeshare property is a capital asset, and if you make | | | | timeshare loans you have simultaneously cannot be |
| a profit when you sell it, you have what's called a | | | | deducted if you also have a primary home mortgage. |
| capital gain. However, you have to own the timeshare | | | | However, if you have multiple timeshare loans at the |
| for more than one year before your expenses will be | | | | same resort, you might be able to deduct the interest |
| eligible as income tax deductions. You can then deduct | | | | because they might be seen as a single timeshare. |
| the expenses you incur through owning the timeshare. | | | | You can donate your timeshare property to a charity, |
| These deductible expenses include the closing costs | | | | but some restrictions apply. If the donated property is a |
| you paid when you bought the timeshare, annual | | | | deeded timeshare, the allowable deduction is usually |
| maintenance fees for the years you owned it, and | | | | equal to the timeshares fair market value on the date |
| special assessments, if any were paid. | | | | of donation. You will need a written appraisal that |
| As with other types of real estate if you sell and lose | | | | meets IRS guidelines if the fair market value is more |
| money, it's considered a capital loss and you might not | | | | than $5,000. There are additional rules for non-deeded |
| be permitted to deduct your losses on your income | | | | and right-to-use timeshares that are considered |
| tax return. It's a different situation if you regularly rent | | | | tangible assets. The timeshares fair market value must |
| out your timeshare. In that case any loss you take on | | | | be reduced by any profit you would have made if you |
| the sale would be an allowable business loss and | | | | had sold the property instead of donating it. |
| therefore deductible as an allowable ordinary loss on | | | | Timeshare property that is rented has different rules. |
| your income tax return. The IRS would not let you do | | | | You will be able to claim deductions for expenses, |
| this, however, if you had converted your timeshare | | | | such as costs of advertising, depreciation, maintenance |
| property back to personal use before you sold it. | | | | fees and rental commission. Some special |
| With one exception, no other deductions are permitted | | | | assessments, like unexpected expenses and costs of |
| against a timeshare property. The exception is | | | | repair, may be deductible. Other expenses, such as |
| property tax, but it is only deductible if it is separately | | | | remodeling and travel costs, may not be. |
| billed or shown as a separate item on your resort's | | | | Remember, too, that vacation home tax rules apply if |
| maintenance fee bill. You may also be able to deduct | | | | you personally use your timeshare at least 15 days |
| interest you paid on a timeshare loan, but only if the | | | | every year. If you use it at least 15 days the timeshare |
| loan is a mortgage and the mortgage on your primary | | | | can also qualify. |