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What Should I Know About Donating My Timeshare?

If you own a timeshare and are considering either donating or selling your yearly week, then it is important to first consider all of the facts.

 

Find Out The Value Of Your Timeshare

Firstly, you need to understand how your profit will be calculated.  If you sell your timeshare, then you need to deduct both sales tax and sale / advertising fees from the sale price in order to calculate your final profit.  Just as with any business transaction, there are expenses for the seller.

What Is The Tax Benefit

If you decide to donate your timeshare, then your tax savings will be your only profit.  You will save a percentage of the deduction value of the timeshare.  The tax deduction for the charitable donation must be equal to the “fair market value” of your timeshare, or the average sale price that buyers and sellers can agree upon in the current market.  In other words, your profit for donating your timeshare will only be a percentage of the price for which you could sell it.

One should be very cautious when dealing with websites that offer to accept your timeshare as a donation.  It is a common practice to tell the timeshare owner that their timeshare has a value of approximately 75% of their original purchase price. This will cause many to an over-estimate the fair market value of their donated timeshare to gain higher tax savings, such tactics are strongly discouraged, as they usually result in harsh tax penalties for the seller.  As a practice Charity’s do not keep the timeshares they accept. In fact, if the charity sells the timeshare within two years of the donation, it is required to disclose the selling price to the IRS.  This will easily bring light to any over-estimation of value reported by the original owner.

It is strongly recommended that anyone considering the donation of a timeshare consult their own tax professional.  You may want to include a copy of this article and ask how it applies.  For more information, let Cash For Timeshares help you.  Contact us today.

 

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