“I just sold my timeshare at a huge loss. Can I claim a capital loss on my taxes?”
If I had a nickle for every time I heard that question I could buy a Westin St John timeshare!
CNN money online ran two articles about selling your timeshare and the tax implications it brings. According to CNN you cannot claim a capital loss when you sell your timeshare. That seems to be the consensus among all those who give tax advice and is the bottom line. When you sell your timeshare you will most likely sell it for less than what you paid for it. Much less. And you will not be able to deduct that loss from your taxes.
For essentially the same reason you could not claim a capital loss when you sold your Corvette for less than what you paid. It is a personal asset.
For just that reason many timeshare owners are angry at the timeshare developers who sold them on the notion that a timeshare was a good investment. Bad choice of words! A timeshare may be a hedge against future inflated vacation costs but in no way is a timeshare an investment.
The New York Attorney General’s website puts it this way, “Timeshares should be purchased for personal recreational use and not for profit or investment.” (source)
So now that you have come to grips with the fact that you cannot claim a loss for tax reasons do you still decide to sell?
Consider the long term cost of owning the timeshare. Year after year you must pay annual maintenance fees, taxes, and any special assessments that may come along. If you are not using the timeshare you are losing money and compounding the cost of your vacations. It quickly becomes a money pit at that point.
There comes a point when you have to cut your losses and future losses and sell your timeshare. It is inevitable.
With all that being said the best time to sell your timeshare is now. The longer you wait the more you lose. Waiting for markets or the economy to turn in a more favorable direction falls into the category of reading tea leaves. Not very reliable. What is reliable is the annual fees that will not end. The solution is to sell your timeshare. Find a reputable timeshare resale broker to get the job done, pay the commissions, fees, closing costs and get it done.
Your timeshare will not sell itself.
How to find out what your timeshare is worth.