Getting rid of your timeshare

drk14 wrote:

We charge a $500 service fee. The closing companies generally charge from $300 to $400 for their services so the final total cost is usually about $850 to the donor. That's not our pure profit. We only get the $500 when the new deed is mailed to us.

As was pointed out above, is the tax incentive the reason for the transaction? No. The donor simply wants out. That's well worth the cost. Because we are a charity and have researched deeply the IRS regulations, we can justify giving a $5,000 income deduction. It's always up to the donor if they want to use all, part or none of that with their tax return. The IRS specifically states that a distressed sale, which most donors are doing, is NOT a factor in determining FMV. In additions, the IRS requirements for an appraisal make it clear that all the distressed sales you find on the Internet are not qualified for an appraisal. Even worse is trying to look at offered prices of $1. Those are not even sales and are never considered in FMV.

In answering your last question, if you do nothing and stop paying the resorts will send you to collections which will certainly come to you in Canada. Can the resorts reverse a transaction they don't like as some people suggest? No. That's not legal. The only parties that have the right to challange a recorded deed are those parties named in the deed. Since the resort is NOT named in ownership, they have no legal right to try to reverse a transaction for any reason. All they have the right to do is continue to bill and place liens against the property in hopes of future payment.

The honest answer is that there is a way to get rid of a timeshare you don't want. Try giving it back to the resort. If they don't want it, try selling it for $1. If that doesn't work contact a few charities to see if they will actually take the deed or only try to sell it for you. If they don't take the deed, a few charities will charge you a fee to take it. Since we never pay resort fees once its in our name, we don't try to charge for future maintenance fees. there are far more expensive ways to deal with your problem, but these are the simple answers.

As I and others have pointed out, look back to the beginning of this forum thread to see specific questions, responses, legal citations and references before you make any decision. Protect yourself by knowing the law and not just listening to opinions.

SCAM period .... we've rehashed this many times on these forums .... you can't deduct $5000 on your income taxes if a timeshare is worth zero .... if you do you're breaking the law and it will come back to bite YOU and the people that do business with you.

You need to try advertising your scam business elsewhere .... actually, I'm surprised your posts haven't been deleted as advertising is not allowed in these forums.

Thank you for your reply and your advice concerning trying to find a charity that would be willing to take my timeshare, and as well, as is accepted, one must know the law. However, being a Canadian citizen, it is most difficult to try to learn all the ins and outs of law in another country...sometimes, even in one's own country especially concerning in my case, Revenue Canada, which is the same as the IRS in the US. I truly do think I have no alternative but to let my timeshares go into default. I am at the stage in life that I won't be applying for any credit and once deceased, the collection companies would incur considerable expense trying to get overdue maintenance fees from my Estate. Good luck to them. Personally feel timeshare companies could be considered just as much scammers as timeshare resellers. At least timeshare resellers, don't "scam" you out of as much money as timeshare companies...both lie and lead the prospective buyer astray, never disclosing the truth...that timeshare companies don't take back timeshares!!! Again, thank you for your time and your advice. Will have to do some serious thinking on what my future decision is going to be...selling is out of the question, no one wants a timeshare, renting is pretty much impossible....one doesn't have any alternative really but to default on maintenance fee payments, something I don't want to do, but now with limited funds due to the passing of my husband, really have no choice. It is not that I own only one timeshare..I own five..Stupid, yes, stupid, for sure!!!

I would be careful of defaulting . If your timeshares are deeded then the debt will fall on any executor or remaining family member who profits from your estate. The deed is legal and binding and therefore will not go away with death unfortunately. I'm sorry if this makes you feel worse than you do already. I do believe donation is your best bet even if it does cost you money. I live in the UK and had owned a timeshare in South Carolina USA. I recently dealt with Donate for a Cause a US charity, they worked wonders for me and I no longer own a timeshare. I too had investigated all the other options, trying to give it away and sell without success. This was my solution. Good luck to you, it's a very worrying time but hopefully you will reach a satisfactory conclusion soon.

beverlycl wrote:

..that timeshare companies don't take back timeshares!!!

I would at least try writing to the resorts' HOAs where you own, explaining your situation and ask if they will accept a deedback in lieu of foreclosure.

If they understand your plight, they might realize that it's in their better interests to have you deed it back to them than to go through legal proceedings dealing with foreclosure.

It wouldn't hurt to try.

If that does not work, then I would list it in RedWeek's Bargain Basement for $1 and maybe even offer to pay the closing costs. But do NOT let any of the blood-sniffing sharks out there rope you into paying them large amounts of money to sell or "cancel" your timeshares.

I was able to deed back my two weeks by calling the resort and explaining to them that I was going to get rid of them with or without their assistance. It worked with two resorts. You have to find the person at the resort who handles that problem. It might take a few phone calls but it's worth a try. It's better for you and them to agree upon a deed back. It let's you off the hook and it saves them the legal expense of a lawsuit and not receiving maintenance fees for years. They can then resell them to someone who will pay future maintenance fees. Good luck.

jayjay wrote:

SCAM period .... we've rehashed this many times on these forums .... you can't deduct $5000 on your income taxes if a timeshare is worth zero .... if you do you're breaking the law and it will come back to bite YOU and the people that do business with you.

jayjay, you so right. We have hashed this out several times and each time you continue to ignore what the IRS law states directly. I've posted it for you and others to read.

Why do you continue to display your inability to either read the law or childishly ignore what you don't like?

It's because of opinionated and misguided people like you that so many owners continue to struggle with continued ownership needlessly. Do us all a favor and try going back to read what has been copied directly from IRS publications and IRS law. Then stop unsubstantiated diatribes or show references to what you believe.

For other readers, as jayjay said, all the legal references are already posted near the beginning of this forum thread. Take a few minutes to read what the IRS actually says about donating, valuation, and how to protect yourself in the process.

I agree with Jayjay. The IRS will only let you deduct the actual value that the timesahre sells for. All the smoke and mirrors won't change that. Anyone who is considering donating their timeshare and expecting to take a $ 5,000.00 write off first check with a certified accountant before you do it. You will find out that Drk is wrong and giving out bad information. It is easy enough to verify by just contacting the IRS or an accountant.

drk14 wrote:

jayjay wrote:

SCAM period .... we've rehashed this many times on these forums .... you can't deduct $5000 on your income taxes if a timeshare is worth zero .... if you do you're breaking the law and it will come back to bite YOU and the people that do business with you.

jayjay, you so right. We have hashed this out several times and each time you continue to ignore what the IRS law states directly. I've posted it for you and others to read.

Why do you continue to display your inability to either read the law or childishly ignore what you don't like?

It's because of opinionated and misguided people like you that so many owners continue to struggle with continued ownership needlessly. Do us all a favor and try going back to read what has been copied directly from IRS publications and IRS law. Then stop unsubstantiated diatribes or show references to what you believe.

For other readers, as jayjay said, all the legal references are already posted near the beginning of this forum thread. Take a few minutes to read what the IRS actually says about donating, valuation, and how to protect yourself in the process.

One more time:

Here's what Dave McClintock, CPA and respected TUG member/moderator says about donating timeshares and any deductibles allowed:

Donating your Timeshare To Charity A frequent question at TUG is, “Should I donate my timeshare to charity?” That often translates to, “I can’t sell my timeshare and have been told the tax benefit may exceed the sales price on the open market.” The answer is "Yes!", if you have a charitable motive and "No!", as it relates to that expected tax benefit.

If donating a deeded timeshare, the deductible contribution amount will normally be equal to the Fair Market Value (FMV) on the date of donation. That’s the price that an arms-length buyer and seller in the timeshare resale market would agree upon, not what the developer is charging for that same week. If the FMV exceeds $5,000, you’ll need a written appraisal that meets IRS guidelines. If the sale of the property would have resulted in a short-term gain, the FMV must be reduced by this amount.

Right to Use (RTU) timeshares and non-deeded points timeshares are tangible personal property to which additional rules apply. If the charity’s use of the property is unrelated to its primary function (for example, if sold at an auction), the FMV must be reduced by the amount of any gain that would have resulted had the property been sold by the taxpayer.

So, why can’t the tax benefit justify a donation? It’s relatively simple. FMV is normally the same as what you would sell your timeshare for. Since the highest federal tax bracket is 35%, you’re better off selling and pocketing the cash. For example, if you sell your timeshare for $1,000 (the FMV), you’ll have $1,000 in your pocket. If you donate the timeshare, your deduction should be $1,000 and your federal income tax savings would put, at most, $350 (35% x $1,000) in your pocket.

Keep in mind that appraisals aren’t cheap (most cost $500 or more) and the cost of the appraisal isn’t considered a charitable contribution.

Another frequent question is, "Can I get a tax deduction if I donate the use of my week to a charity?" The answer is “No”. IRS regulations won’t allow a charitable deduction for the gift of a right to use property. Donate the use of a week because you are charitable, but you can't deduct any value associated with the use of the week.

With all due respect to Dave McClintock, CPA, I would prefer to trust what the IRS publishes directly in their regulations and publications. Unfortunately, jayjay, donp196, and others never bother to read the actual law as presented by the IRS. If you want a CPA’s opinion, please get it, but make sure you give these direct IRS quotes to them for review.

Here is what the IRS says:

“FMV is the price a willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy or sell.” (Instructions for Form 8283 - Noncash Charitable Contributions)

“Factors. In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. These include: • The cost or selling price of the item, • Sales of comparable properties, • Replacement cost, and • Opinions of experts.” (Publication 561 - Determining the Value of Donated Property)

“Unusual Market Conditions For example, liquidation sale prices usually do not indicate the FMV. Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV.” (Publication 561 - Determining the Value of Donated Property)

“Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. . .” (Publication 561 - Determining the Value of Donated Property)

"Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. " (Publication 561 - Determining the Value of Donated Property)

“1. Comparable Sales For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor’s appraised FMV. . . . Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property.” (Publication 561 - Determining the Value of Donated Property)

My comments - In simple terms the IRS says FMV is between a willing, knowledgeable buyer and seller, neither of which has to sell and a distressed sale is NOT indicative of FMV. Next, only if the donor is taking a greater than $5,000 deduction is an appraisal required and that appraisal must include ALL sales for which specific detailed information can be obtained. Distressed sales at $1 on eBay rarely give enough information to qualify as FMV comparables. Generally, only resort sales have enough information to be accepted by the IRS for appraisal purposes.

“Penalty 20% penalty. The penalty is 20% of the underpayment of tax related to the overstatement if: • The value or adjusted basis claimed on the return is 200% (150% for returns filed after August 17, 2006) or more of the correct amount, and • You underpaid your tax by more than $5,000 because of the overstatement. 40% penalty. The penalty is 40%, rather than 20%, if: • The value or adjusted basis claimed on the return is 400% (200% for returns filed after August 17, 2006) or more of the correct amount, and • You underpaid your tax by more than $5,000 because of the overstatement.” (Publication 561 - Determining the Value of Donated Property)

My comments - Finally, contrary to the dire warnings of illegal activity and consequences, the IRS doesn’t deal with what a charity gives as donation credit. They are concerned with what the taxpayer claims. Importantly, look at the second half of each penalty section, “• You underpaid your tax by more than $5,000 because of the overstatement.” Even with a $70,000 income you would have had to claim more than a $20,000 deduction from the donation to qualify for any penalty at all.

Please read the IRS regulations yourself and consider the source for unsubstantiated rants and raves of imbeciles found in this thread.

Do you actually think the IRS is stupid enough to permit a $5000 deduction on a timeshare that has zero value .... do you believe they are not aware of the implosion of the timeshare industry and the devaluation of all timeshares? The guidelines you quoted may have been from the past, but they are certainly not relevant to today's market .... have you bothered to research current revisions to the old guidelines you posted above.

jayjay wrote:

Do you actually think the IRS is stupid enough to permit a $5000 deduction on a timeshare that has zero value .... do you believe they are not aware of the implosion of the timeshare industry and the devaluation of all timeshares? The guidelines you quoted may have been from the past, but they are certainly not relevant to today's market .... have you bothered to research current revisions to the old guidelines you posted above.

No, I don't think the IRS is stupid. I DO think those unwilling to read and accept what the IRS is CURRENTLY posting on their website are the stupid ones.

As for relevancy, timeshares have been selling for $1 for many years and have never been a good investment. What makes you think resales have changed in the last 10 years? Can you cite multiple examples of high priced resales of lower quality timeshares any time in the past? This same topic has been around almost since RedWeek.com began.

Please, do us all a favor and reference your inane opinions with actual IRS publications, documents, memos, or quotes instead of flaunting stupidity or stop trying to tell us all what the IRS doesn't say.

Since you claim to be a charity what is the charity exactly and how much of the money goes to an actual charity. Sounds more like a scam using a charity as a front. I think it's time to foward all this information to the IRS and let tham investigate it and give us their opinion. This way we'll have the correct information for everyone. I'm going to make this my pet project to find out the truth about this supposed charity.

I do believe that this IRS conversation has now reverted to a no win situation, no-one is prepared to compromise or back down. Time to put it to bed. I suggest you all get back to trying to help others on this forum as your arguments are going no where... Just my humble opinion so don't jump on my back please.

drk14 wrote:

jayjay wrote:

Do you actually think the IRS is stupid enough to permit a $5000 deduction on a timeshare that has zero value .... do you believe they are not aware of the implosion of the timeshare industry and the devaluation of all timeshares? The guidelines you quoted may have been from the past, but they are certainly not relevant to today's market .... have you bothered to research current revisions to the old guidelines you posted above.

No, I don't think the IRS is stupid. I DO think those unwilling to read and accept what the IRS is CURRENTLY posting on their website are the stupid ones.

As for relevancy, timeshares have been selling for $1 for many years and have never been a good investment. What makes you think resales have changed in the last 10 years? Can you cite multiple examples of high priced resales of lower quality timeshares any time in the past? This same topic has been around almost since RedWeek.com began.

Please, do us all a favor and reference your inane opinions with actual IRS publications, documents, memos, or quotes instead of flaunting stupidity or stop trying to tell us all what the IRS doesn't say.

drk14 wrote:

As for relevancy, timeshares have been selling for $1 for many years and have never been a good investment. What makes you think resales have changed in the last 10 years? Can you cite multiple examples of high priced resales of lower quality timeshares any time in the past? This same topic has been around almost since RedWeek.com began.

Have you been hiding under a rock ..... timeshares HAVE NOT been selling for $1 for many years .... all this started during this rescession and the housing market implosion which carried over into the timeshare industry. This makes me think you know absolutely ZERO about timesharing.

It's evident that you've merely researched LLC's and made the decision to get into taking timeshare weeks (charging several hundred dollars to the customer) as your scam of choice intending not to pay maintenance fees leaving other owners having to take up the slack for a deadbeat like you.

I have no idea what you mean about high priced resales of lower quality timeshares. None of my resales were Marriotts, Hyatt's, 4 Seasons, Disney etc. (higher quality name brands) but I sold them all (8) for what I paid for them on the resale market .... coming out even .... I did not have to give them away or sale them for $1.

It's supply and demand of the resort and time owned that counts when selling any timeshare.

I doubt seriously if you ever change ownerships leaving the donator still being billed for maintenance fees and possible special assessments.

And I still recommend to anyone reading this thread and thinking of donating their timeshare to this scam operation to NOT DO IT .... drk, you need to look for another line of work other than scamming people and resorts.

jayjay, jayjay, jayjay (sounds kind of avarian doesn't it?) do you still refuse to check references, read actual responses, or bother to acknowledge IRS publications?

If you or anyone else wants to check references for what we do, how legal it is, and how successful it is for the donor, simply contact tow of the licensed, bonded closing companies we have worked with for several years. One is Trejesto. The other is Resort Closings Inc. If it's not too difficult for you, jayjay, do a simple Google search and you'll find them easily. Give them a call. I'm sure they would be happy to help you.

Now, I have a few questions for you.

What's this about your buying and selling 8 or more timeshares - all profitably? What do you pay for them? Who do you fleece when you buy them? How long do you keep them. What kind of crooked scheme do you pull on the unsuspecting sellers? Who have you dealt with and how can we check YOUR references? Are you upset because someone might be taking your profit from you?

Instead of wild accusations, unsubstantiated claims, and childish flames, give us a little maturity and honest to goodness references other readers can check.

Otherwise, have a nice day!

drk14 wrote:

Now, I have a few questions for you.

What's this about your buying and selling 8 or more timeshares - all profitably? What do you pay for them? Who do you fleece when you buy them? How long do you keep them. What kind of crooked scheme do you pull on the unsuspecting sellers? Who have you dealt with and how can we check YOUR references? Are you upset because someone might be taking your profit from you?

Instead of wild accusations, unsubstantiated claims, and childish flames, give us a little maturity and honest to goodness references other readers can check.

Otherwise, have a nice day!

I did not profit from selling any of my timeshares (except the last one and the giver was desperate to give it away due to rising maintenance fees) ..... I sold them for what I paid for them on the resale market, period. I actually lost a lot of money on the only developer one we bought and eventually sold.

I am not a dealer in timeshares .... only what I bought (for personal use) and later resold when we found, during a timeshare trip across the mountains, where we wanted to spend the rest of our life. After moving here, we had no use for timeshares any longer. We now take only short weekend trips or day trips.

drk14 wrote:

jayjay, jayjay, jayjay (sounds kind of avarian doesn't it?) do you still refuse to check references, read actual responses, or bother to acknowledge IRS publications?

If you or anyone else wants to check references for what we do, how legal it is, and how successful it is for the donor, simply contact tow of the licensed, bonded closing companies we have worked with for several years. One is Trejesto. The other is Resort Closings Inc. If it's not too difficult for you, jayjay, do a simple Google search and you'll find them easily. Give them a call. I'm sure they would be happy to help you.

Now, I have a few questions for you.

What's this about your buying and selling 8 or more timeshares - all profitably? What do you pay for them? Who do you fleece when you buy them? How long do you keep them. What kind of crooked scheme do you pull on the unsuspecting sellers? Who have you dealt with and how can we check YOUR references? Are you upset because someone might be taking your profit from you?

Instead of wild accusations, unsubstantiated claims, and childish flames, give us a little maturity and honest to goodness references other readers can check.

Otherwise, have a nice day!

You might be interested in reading this thread on Tug concerning hiding behind phantom charities and LLCs:

http://tugbbs.com/forums/showthread.php?t=159753