Most timeshare owners are going to take a loss if they sell their timeshare. In addition to the loss the owner will need to navigate the process of a deed transfer. Owners in a higher tax bracket may benefit from donating their timeshare.
Have a specific charity that you would like to donate to? Most charities do not accept timeshares. Transferring ownership of a timeshare can be difficult for charities that infrequently receive timeshare donations, but don’t give up hope. There are numerous companies that can handle the process of donating your timeshare. We should also mention there are disreputable businesses who may also offer to assist with the donation process. Always check the BBB before doing business with any timeshare company.
Timeshare donation companies operate on a fairly simple formula. The company donates the timeshare to a charity in the owners name, buys the timeshare back from the charity, and then sells the timeshare. The timeshare donation company is a for-profit company, but this is a win-win situation for all involved. The owner can walk away from their timeshare with a tax deduction, the charity receives a donation, and the timeshare donation company makes a profit (most of the time).
The only entity with anything to lose is the timeshare donation company, they are taking all of the risk. As with any successful company, the timeshare donation company needs to mitigate their risk. Most timeshare donation companies mitigate their risk by only accepting deeded and right-to-use weeks with all fees paid up. The companies can be picky about what they accept.
Consult your accountant to understand the details of the tax deduction for the donation. Typically the process is fairly simple if the fair market value of the donation is less than $5,000. Donations over $5,000 will typically require a certified appraisal. Review the IRS website for more information on noncash contributions to charitable organizations. Keep in mind the charity will disclose the buyback price of the timeshare to the IRS and the buyback price will most likely determine the amount of the deduction.
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