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Re: Getting rid of a time share. (by Carvan A.):

peterp151,

You say my comments were "Not quite right". Please point out specifically what I said that was not correct? I purposely kept my remarks brief to avoid again being called an "Edumacated Idiots".

Let me address some of the points you raised.

pterp: "There is a time test"

You did not offer details on the "time test". The time test has to do with whether the capital gain/loss is a short term or a long term gain/loss. This affects whether or not the gain, if any, is taxed at the current 15% - with some exceptions - until at least 2011 when the rate reverts to the 2001 rate in the absence of legislation. Anyone who needs more details on the "time test" is really in need of a tax professional.

peterp: "I believe you must rent it out a minimum three of five years in order for it to qualify for tax losse"

You are somewhat confused by the "three out of five year" presumption. The IRC code and related regulations require one to make a profit three out of five years to overcome the presumption that the activity is not in fact a business. Renting it but incurring a loss by renting it for less than the maintenance fee does not satisfy the profit test. The presumption that the business is in fact a hobby because one does not make a profit in three of five years can be overcome at the IRS audit, at the IRS Appellate level or in U.S. Tax Court by factual evidence that successfully rebuts the presumption. Having a presumption on your side in court means the other side has the burden of submitting evidence to rebut the presumption. For example, there is a presumption in the U.S. that a criminal defendant is innocent and the prosecution must overcome this presumption. The 3 out of 5 year profit test is not a rule but rather a presumption.

peterp: "i While the capital loss is limited to $3,000, carvana did not explain this to the detail required. If you have a valid capital loss on the timeshare . . . that loss can offset various capital gains"

I said, "The capital loss is offset against capital gains " . I concluded by saying , "Anyone . . . believing they can claim a capital loss on the sale of a timeshare should check first with their tax attorney or tax advisor or go to IRS.gov for more information. " I believe I said what you said in far fewer words. Again, I purposely avoided a detailed explanation but did refer any interested party to the IRS web site or a tax professional.

I think our goals, peterp, are the same and that is to "educate" but I have been accused of verbosity in the past and am working on making my comments much less detailed. Hopefully, my last word on this subject!