Can I deduct a loss on a sale of my timeshare that I occasionally rent?

[JulieR · Accepted solution]

It depends. If you used this timeshare as a second home and you rented it less than 15 days during the year, the loss would be considered a non-deductible personal loss.

If you rented it out for greater than 15 days during the year, you could treat the sale as the sale of investment property and report it on your return under the Investment Income area of Wages & Income.

1. Use the Search box in the TurboTax header and type in "sale of second home." Hit Enter, then use the jump-to link to go to the start of that section.
2. Add an investment sale.
3. Type of Investment: Second Home
4. Enter a description, Net Proceeds and date of sale.
5. Acquired: how this property was acquired
6. Cost Basis: original purchase price plus closing costs
7. Date of Acquisition: date you purchased the property

TurboTax will determine if you had a gain or a loss on this investment and determine if it was short- or long-term. If you have other capital gains, a loss will offset some or all of the gains. Otherwise, up to $3,000 of the capital loss will go to line 13 of Form 1040 and offset other income. The remaining loss over $3,000 will be carried forward each year until used up (applied to capital gains and/or ordinary income). If the sale resulted in a gain, it will be taxed as capital gains.