Can you claim as a loss on Schedule D of IRS forms the sale of a Time Share.?

Question

If you purchase a time share and wish to sell it and the only way to do this is to sell it at a loss or give it away, can you claim what you originally paid for the time share, which is deeded, as a loss on Schedule D. The deed has been registered in the state in which the time share is located. We have used the time share for our own use, and have not rented it.

Answer 1

Any profit on the sale of your timeshare is taxable. If you sell at a loss, the loss is normally not deductible.

Profit on sale is treated as capital gain, subject to favorable tax rates if owned for more than one year. For gain purposes, your cost is generally your original cost, plus additions for the following items: (1) closing costs incurred when you purchased your timeshare, (2) the portion of your annual maintenance fee (for all years owned) allocated to capital reserves or used specifically for capital improvements (such as a new roof), and (3) any special assessments for capital improvement purposes which you paid. This amount should be reduced by any depreciation expense in years you rented the timeshare.

If you (and/or relatives or friends) use the timeshare, exchange it or let it go unused, a loss on sale will be personal and not deductible, just as a loss on the sale of your home or your car would not be deductible. Even though your intent might be to hold it as an investment, your personal use results in no tax loss being allowed upon sale.

Answer 2

Is a personal expense, so no. If you had purchased it for the purpose of renting it out as a business, then maybe, but since it was personal use, no. No different than selling your home at a loss - that's not deductible either.

Answer 3

absolutlely YES, you are correct, the maxximum amount is 3000 and carry over until you deduct the total loss amount