I sold my timeshare in January. Where do I indicate the gross proceeds? (These were about $10,000 less than what I had spent when I bought the property.)

[Anonymous]

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.

[GatorRay26]

Likewise, I sold a timeshare in mid-2019. The 1099-S 2019 Gross proceeds are in question.  The TS was for personal use only so there is no question about taking a deduction. The Standard Deduction covers what we need for a joint filing.  The explanation to one person about his sale was a bit confusing for me.  Apparently, I have to claim the proceeds from the 1099-S as a real estate transaction but it doesn't qualify as a gain or loss. (Most TS sales are losses and TS's unlike a primary residence wouldn't fall under the lifetime limitation anyway as I understand).  I just want to correctly enter the amount in the correct place on TT.  The purchase price was far above the sale proceeds, not unexpected.  I can't net out as zero as the one explanation indicated, can I???? That's the confusing part.  Surely, I can't take a loss on the sale.   Super-users, please advise.  Ray

[RobertG]

Since the property was not your principal residence, you should enter under 'Investment Income' - 'Stocks, Mutual Funds, Bonds, Other.' 

When you are asked 'What type of investment did you sell?'   You should select either 'personal items' or 'second home'.  This indicates that it is not a business or rental property.

[t18c97]

I'm using TurboTax Deluxe. When I go to the Investment Income section and say visit all I never see the questions that you say I should see. What am I doing wrong? I need to report this 1099-S from a Timeshare sale. Thanks

[Irene2805]

The sale of timeshares is treated as the sale of a capital asset. (However, losses from the sale of a personal use timeshare are deemed to be personal losses and are not deductible) 

If you received a 1099-S for this transaction, you will enter it as the sale of a capital asset. 

To report this in TurboTax, please follow these steps:

TurboTax Online

1. Click on Federal > Wages & Income
2. In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.  If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far.  Click on the Add More Sales link. 
3. If you haven't yet entered some investment sales, you will see a screen Did you sell any investments in 20XX?  Click the Yes box.
4. On the screen,  OK, what type of investments did you sell? mark the Other box and click Continue.
5. When you get to the screen, Now we’ll walk you through entering your sale details enter the details of the sale.  You will be able to select the type of investment in the first box [second home, land, etc.]  [See Screenshot #1 below.]
6. Click Continue when done.

TurboTax CD/Download

1. On the Wages & Income screen, in the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.  If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far.  Click on the Add More Sales link. 
2. If you haven't yet entered some investment sales, you will see a screen Did you sell any investments in 20XX?  Click the Yes box.
3. On the screen,  
4. Did you get a 1099-B or brokerage statement... click the No box.
5. On the screen, Tell us about this sale, mark the radio button, I'll enter one sale at a time.
6. Enter the information in the boxes that appear.  You will have to type in Land Sale in box 1a.
7. Enter the total sales proceeds as well as the other information requested.  [See Screenshot #2 below.]
8. Continue to the screen, Select any less common adjustments that apply.  
9. Mark the first box The reported sales price did not deduct all fees or selling expenses.  [Screenshot #3]  
10. Enter the sales expenses not deducted from the sales price entered earlier.

Screenshot #1

Screenshot #2

Screenshot #3

@t18c97

[GatorRay26]

I am assuming that the 2020 reporting process is the same as I used for  the tax year 2019.  I entered the sale on Form 8949 “Sales and other dispositions of capital assets” Part II Long-Term. Ck Box F “Long-term transaction not reported to you on Form 1099-B. This 8949 Form is associated with Schedule D.   Under column (h) Gain or (loss) I entered “0”.  The TS re-sale company did send me a 1099-S and a copy did go to the IRS, hence the reporting requirement.It has no apparent tax consequences with a net of zero. I initially started the process according to the TurboTax instructions for entering 1099-S  for the timeshare sale by placing the search term “sold second home“. I answered yes to the question “did you sell any stocks, mutual funds, bonds, OR OTHER INVESTMENTS IN 2019.“   on the screen that said “here’s the info we have for these investment sales“, underneath it said “add more sales“. Then I answered no to the 1099 – B question. Just follow the questions and answer accordingly. In the end, The form 8949 was completed and I believe it is correct. As for the standard Terminology “investment sales”, that’s a misnomer. Anyone that believes that a timeshare is an investment that will ultimately generate a profit upon sale has been thoroughly duped by some timeshare salesman. We did, however, enjoy the heck out of it while we owned it but it was time to move on. If you got even a few bucks from the sale (net of the maintenance fees you were required to pay for the sale year) you were fortunate to have purchased in a desirable location that was not completely overrun with timeshare companies. No extra charge for these unsolicited comments. 😉 R

Disclaimer: I am not a tax attorney nor an accountant. I found some information through the TurboTax software and proceeded as I described it above. I have never been audited in the 20+ years I have used tax software. RS

[Irene2805]

The procedure is a little different in TurboTax for 2020 (see my answer above), but your steps get the desired result.  Thanks for sharing (especially your comments  on timeshares!!).

@GatorRay26

[nest44fei]

I received a 1098 for the sales after I already filed the tax return.  It was a loss.  Should I file amendment to avoid any problem?  on schedule D?

Thanks.

[DianeW777]

It depends. If the timeshare was strictly used for personal purposes (not rented, etc) then you don't really have to report the sale since a loss will not be allowed to offset other income.

• To clarify, did you receive a Form 1099-S (sale of real property) or Form 1098 (mortgage interest payments)? 
  • If there was no Form 1099-S then you do not need to report the sale.

However you do have the option of amending your return so that the IRS sees the result and doesn't ask you to pay tax on the proceeds later on when they reconcile the documents with your return.  You must indicate when asked that it was used for personal use.

[nest44fei]

I received a 1099-Misc.  It was for personal use only.  Do I need to amend the returns?  Thanks.

[KrisD15]

To clarify,

in which box is the income reported on the 1099-MISC?

Did you sell in 2021, is this a 2021 1099-MISC?

Did you already file a 2021 tax year return and if so, was that original 1040 already processed? 

@nest44fei

[nest44fei]

Yes I sold it in 2021 and the 1099-Misc said Other Income 3....  The tax returns have been processed and I already have gotten my refunds.

[LeonardS]

A deeded timeshare is considered Real Estate and you will report the it as a capital sale on your tax return.  You will have to amend your 2021 tax return to report the sale of your timeshare.  This TurboTax link How to amend (change or correct) a return you've already filed  will guide you in filing an amended return

To report the sale of your timeshare in TurboTax follow these steps: 

1. Open or continue your return
2. In the search box, enter sold second home 
3. Click on Jump to sold second home in the results box
4. On the page Did you sell any of these investments in 2021?  Answer yes
5. On the page OK, let's start with one investment type check the Box for other
6. On the page Tell us more about this sale enter “sale of timeshare” in the Name box
7. Answer all the questions on the page Now, enter one sale for sale of timeshare Enter the amount in Box 3 Form 1099-MISC in the Proceeds box and your basis in the Total amount paid box
8. On the page Let us know if any of these situations apply to this sale check the box you paid expenses and enter your sale expenses
9. Continue to the page Your investment sales summary where you will see your Total gain if any on the sale of your second home.

A timeshare that is not used for investments purposes is personal use of a capital asset. A gain on the sale is reportable income, but a loss is NOT deductible

This link Where do I enter the sale of a second home, an inherited home, or land on my 2021 taxes? has information you may find useful.

@nest44fei

[nest44fei]

Thanks so much!  Guess I should have waited.  But as I found out loss was not deductible, I just went ahead and filed it.

I will amend the returns.

Thanks so much for the assistance!