A timeshare is shared ownership of a property that allows each owner a definite period to reside in it. Timeshare loss is the difference between what you paid and the selling price of the timeshare, less the expenses incurred in the sale. A timeshare is treated like any other ordinary asset by tax laws and any loss incurred in the sale of timeshare is not subject to income tax deductions. However, you may be granted an exception and your loss considered deductible if you provide sufficient proof that your timeshare was a business that involved renting out your portion of the timeshare on a regular basis. As such, occasional use of your week for rental, using it for business during your annual vacation and renting it out in the year of sale are not considered to constitute tax-deductible business or investment activities.
