Report Abuse

Ken1193, I have never asserted my expertise or authority. Since such honors have been bestowed upon me by yourself and others, I won't take offense to your arguments of such claim. You claim such for me and now retract them. That's fine with me. Since we differ on who should ask professional advisers to submit opinions to a forum such as this or before personally taking any action, I see no further discussion on that subject. It's simply a difference of opinion as to who is responsible for one's actions. Since the NPO is in no way able to submit the actual evaluation to the IRS, unless they sell a timeshare within 36 months of receipt by donation, and because it is solely the donor who writes in what they wish to claim, there is no way any NPO or adviser would be held liable and pay such penalties based on the taxpayer's form entries. However, as I said, I would be more than willing to appear, if asked, to support the documentation I've provided. Asking or even thinking any entity should take the responsibility of another taxpayer's actions is asinine. Ask any CPA, tax attorney, H&R Block, etc. the same question and you will get the same answer. Why do you then ask me to do something none of the others would do? Be that as it may, I stand behind what I write and will appear, if asked, to support my assertions. Now, beyond the above arguments, let me give you an illustration. And please understand we make this plain to all our clients. Any person who reads the simplest of IRS documentation regarding property donations (timeshares fall under this heading) they will learn that a donation claim can be taken up to $5,000 without an appraisal. It's any claim above that amount that requires an appraisal. At the same reading, in the same publication, it is clear that the IRS considers the actual cash received by the NPO upon resale within 36 months to be considered a "better" indication of FMV. But, if there is no resale within 36 months other means dictated by the IRS must be used and it's much easier and legal for the owner to claim that $5,000 deduction credit. However, if it was resold for $500 that is the limit of deduction credit. This sale triggers the filing of a Form 8282 to the IRS of the sale price. Beyond the 36 months, there is no Form 8282 filed. To avoid having to file this For 8282 the NPO must have given a receipt to the donor specifically stating what actual cash they received and letting the owner know that is the amount they can claim. In actuality, the form is to work both ways. a higher sale price can get a higher deduction for the donor while a lower sale price forces the donor to adjust their donation credit downward. All this is straight out of IRS Publications and Form 8283 itself. Given the above illustration, which I believe is very reasonable, the difference boils down to how long the NPO holds the timeshare before disposing of it by any means. If it is for $500 within the 36 month window, an owner in a 25% tax bracket would get $125 back on their taxes. If the NPO holds it for 36+ months and takes the $5,000 donation credit, in the same 25% tax bracket, they would get $1,250 back from the IRS. If they deduct the cost of sale from that at roughly $800 total, that leaves $450 in their pocket versus the $125 if it was sold. Now some further questions. Who is irresponsible and jeopardizing the owner and leaving them open to IRS penalties if they lead the owner to think they can deduct up to $5,000 and then turns around and sells it for $500? It is the LAW that the NPO must file the Form 8282. If the NPO doesn't know about it, who is in error? After all, it's written right on the Form 8283 above the NPOs signature. If they choose to ignore it and hope the IRS doesn't question the sale, who is going to take the liability for tax penalties? Which is doing the disservice to the donor - the immediate reseller or the 36 month holder? Why don't other NPOs do this? For a lot of reasons. I believe it's mainly due to the fact that they want the donation so they can generate immediate income from it and either don't recognize the law or choose to ignore it. Why then do we charge a fee? Because we don't get any income from the immediate resale other NPOs get. That should be simple to understand for anyone. Finally, if you really have a desire to continue this discussion, I, and I think others, would actually appreciate your quoting the sections of IRS code I've taken incorrectly and telling me what my error is. I do appreciate your input, especially if it can help me understand IRS tax law better. Unfortunately, trying to argue authority, credibility and opinion have very little to do with the real issues on law most people are most concerned about and interested in. If you've read my treatise on Timeshare Donations and IRS Regulations, please point out to me where I'm wrong so I can correct it. Otherwise, it might be best for others to read and judge for themselves. Thank you, Dr. Ken Rich