| Some people have a misconception that timeshare | | | | qualify as mortgage loans as they are primarily termed |
| sales are not subjected to income tax. But in reality | | | | as consumer loans. Also you have to keep in mind that |
| timeshares sales are subjected to income tax. It is | | | | you cannot deduct interest on multiple timeshare loans |
| treated similar to any other kind of real estate | | | | at a time if you also have a primary home mortgage. |
| property. As a timeshare property is a capital asset so | | | | But you might be able to deduct interests on multiple |
| when you sell a timeshare and make profit on it, it is | | | | timeshares if they are at same resort, as they can be |
| considered as a capital gain. But you have to own the | | | | viewed as one timeshare. |
| property for more than one year for it to be eligible for | | | | The timeshares can also be used for donating to a |
| income tax. You can include all the costs associated | | | | charity. But there are some restrictions. If you want to |
| with buying a timeshare like closing costs you had to | | | | donate a deeded timeshare, the allowable deduction is |
| pay when buying your timeshare, the annual | | | | normally equal to the fair market value of the |
| maintenance fee for all the years that you owned the | | | | timeshare on the date of donation. If the fair market |
| property and special assessments if any. | | | | value exceeds five thousand dollars you will have to |
| But Like any other real estate property if you sell your | | | | get a written appraisal that should meet IRS guidelines. |
| timeshare and if you incur loss which is called capital | | | | In case of non-deeded and right to use timeshares |
| loss, you many not be able to deduct the losses in | | | | which are considered as tangible assets, additional |
| your tax returns. But situation might differ if you | | | | rules apply. The fair market value of the timeshare |
| regularly rent the unit; any loss on sale would be | | | | must be reduced by the amount equal to any gain that |
| termed as allowable business loss and would thus be | | | | would have been made had the property been sold by |
| deductible as an allowable ordinary loss in tax returns. | | | | the owner. |
| Loss on sale would not be allowed by IRS if the unit | | | | When it comes to renting your timeshare you can |
| had been converted back to personal use before | | | | claim deductions on all expenses including depreciation |
| selling. | | | | cost, cost of advertising, rental commissions and |
| There are no other deductibles allowed against | | | | maintenance fees. Certain kind of special assessments |
| timeshares. The exception is the property tax only if it | | | | may be deductible like repairs and unexpected |
| is billed separately. They are also deductible if the | | | | expenses. Expenses like remodeling may not be |
| resort differentiates it as a different item on your | | | | deductible, so are the travel expenses |
| maintenance fee bill. You may also be able to deduct | | | | Also one has to remember that vacation home rules |
| the interest on a timeshare loan, but, only if the loan is | | | | apply if you use it for at least fifteen days each year |
| taken as a mortgage and there should be no other | | | | for personal use. The timeshares can also qualify |
| deductible mortgages except your primary home | | | | however you should use it at least 15 days. |
| mortgage. But sad thing is not all timeshare loans | | | | |