Getting rid of your timeshare

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Original Message:

Re: Getting rid of your timeshare (by Carvan A.):

Drk14

The link you provided takes one to your organization's web site and it does not provide a citation for the IRS regulation you reference in your post. You do provide an IRS link that provides general information about validating charitable deductions.

Your web cite paraphrases the IRS requirements "dealing with multiple levels of donation amounts" together with the IRS requirements for validation of fair market value. You stess the requirement that the IRS requires a Form 8283 declaring a fair market value signed by the taxpayer (donor) for gifts between $500 and $5000 and an appraisal signed by a "lcensed appraiser" for donations of over $5000. You point out that if the NPO (charity) sells the timeshare within 36 months the donee (charity) must file a form 8282 setting out the actual selling price to the IRS. To avoid this requirement you indicate your firm will hold the TS for 36 months. You also stess that the reported value be under $5000 to avoid the required appraisal.

You of course know that the charitable deduction must be the actual FMV and any timeshare that is worthless is of no value as a deduction. To knowingly claim a charitable deduction greater than the FMV constitutes fraud. Your real scam and it would be recognized in an IRS audit is the 36 month period your organization will hold the TS to avoid the Form 8282 requirement. You use the 36 month holding period because in the absence of fraud the IRS does not audit returns beyond the 36 month period. What you fail to stress - although you make an oblique reference - is that the IRS can audit a return for a period up to 6 years where fraud is present. In my opinion, anyone who follows your advice is playing with fire if they knowingly claim a deduction of 5,000 for a worthless timeshare. Your advice does not specifically advise fraud but the emphasis on limiting the amount of the deduction to $5,000 to avoid the appraisal and your holding the TS for a period of 36 or more months to avoid an IRS audit sure smacks of indirectly encouraging fraud.