Original Message:
Re: Has anyone ever donated a timeshare for a tax write-off? (by R P.):
From CPA DaveM:
There are a few errors and an omission in your post.
First, sales by the developer don't enter into determining the value that an owner should claim when determining how much to deduct for donating a timeshare. That's because the donor must value the donation based on what a willing buyer and seller would agree to as a price in the marketplace that the donor has access to - the resale market. There's an old IRS revenue ruling that makes that clear.
Second, you imply that the donor is bound - in determining value - by the ultimate sales price of the timeshare. Although that's the law when donating a car, that's simply not true for timeshares. That sales price is only one factor in determining value. As an example, many of the so-called "postcard companies" dump timeshares on ebay for practically nothing. Those same timeshares when sold properly will often fetch much more. Thus, the actual selling price (e.g., on ebay) is not determinative.
Finally, you are correct that there is no $5,000 (or any other) limit on how much one can deduct for donating a timeshare. No one has ever suggested here that there is such a limit. However, what you omitted is that if the claimed deduction exceeds $5,000, the donor must obtain an appraisal of the timeshare performed by a "qualified" appraiser in a manner that meets IRS standards. Otherwise, the donor is not entitled to any deduction.