Many questions surround the timeshare industry. While they offer the promise of luxurious vacations, timeshares also come with hefty upfront costs and annual maintenance fees that increase each year. This leads timeshare owners to ask, “Is my timeshare a tax write off?”
Your timeshare, in general, isn’t considered a tax write off. This is because, generally, timeshares fall under the umbrella of personal property rather than real estate investments. As such, timeshare owners cannot take deductions related to depreciation or other investment-related expenses as they would with physical properties like rental homes. However, certain timeshare-related costs may still be eligible for timeshare tax deductions. The answer depends on a variety of factors.
The Timeshare Tax Write Off – What Expenses are Deductible?
Let’s see if we can help clarify the confusion surrounding deductible timeshare expenses.
The answer here is generally ‘no.’ However, there is an exception. Timeshare owners who rent their timeshare must report that income when filing taxes. While you should always consult with a tax professional, reporting rental income can make you eligible for standard business deductions.
Interest on Loan Payments
Many timeshare owners opt to finance their timeshare purchases with a loan. The type of loan you take out will dictate your eligibility for timeshare tax deductions. If you acquired a credit card or lease directly from the timeshare company, you probably won’t be able to deduct any related interest payments.
However, if you obtained a secured loan, there is potential for such deductions. Examples of a secured loan are a home equity loan borrowed against your primary home or a loan that uses your deeded timeshare as collateral.
Property taxes are sometimes a timeshare tax write off. This write off is possible if timeshare owners have deeded timeshare ownership and property taxes are billed separately. In this case, timeshare owners can deduct their share of the property tax bill on their income tax returns.
This doesn’t mean timeshare owners who receive their property taxes lumped together with other expenses can’t claim a property tax deduction. To obtain an accurate itemized statement detailing each expense, owners should contact their timeshare company to request this information. With this, eligible timeshare owners can then claim a timeshare tax deduction.
Point-Based or Right-to-Use Timeshares
Unlike deeded timeshares, point-based or right-to-use timeshares are not real property. With these types of timeshares, you purchase a block of time instead of property. As a result, they are not eligible for a timeshare tax write off.
Timeshare Tax Write Off Recap
When it comes to timeshares and taxes, it can get complicated. What we have provided is just an overview. To ensure any timeshare deductions are legitimate, your need to work with a tax professional.
However, if you’ve had it with annual maintenance fees and your timeshare no longer provides the joy and relaxation it once did, it may be time to consider getting rid of it. The best way is to work with a professional timeshare cancellation company.
The Timeshare Cancellation Professionals
Timeshare Legal is a professional, full-service timeshare cancellation company. And yes, we can start the timeshare exit process without all the upfront costs.
Timeshare Legal was founded by Christian Highlander. He has over 20 years of experience and has worked on both sides of the industry. Christian and his team are passionate about providing timeshare exit solutions that have the least possible impact on your credit and financial future.
Take our online assessment to see if you qualify for a timeshare cancellation, or contact us today to schedule a consultation. Learn how we can help you take the first step toward timeshare cancellation and financial freedom.