1099-C for deed in lieu of foreclosure on a timeshare.

[ladyshark8]

I signed a deed in lieu of foreclosure on a timeshare.  The company told me they would cancel the debt and resell the timeshare. I received a 1099-C.   Box 2 ($11,896) is less than box7 ($13,429).  My calculations say I have a LOSS of $1533.  Do I have to report the 1099-C on my taxes?

[KrisD15]

It doesn't quite work that way. 

You need to know your basis, which is usually what you paid for the Timeshare (plus any improvements you made). 

Next, you take the smaller of Box 2 or Box 7. In your case it would be box 2.

Subtract your basis from Box 2. 

So if you paid 10,000 you would subtract 10,000 from 11,896 and you have a 1,896 gain.

If you paid 12,000 you would have a 104 loss. 

Pub 4681

[ladyshark8]

Thank you for responding.   So, the timeshare was actually a Sheraton points time share without any specific property attached to it.  I signed a loan agreement for $13000 with the timeshare company.  After making multiple payments I realized the type of loan it was would actually end up costing me more than double what I signed up for. So, I started the process of deed in lieu of foreclosure. This meant I had to stop payment and "abandon" my interest in the "property".  The FMV ($13,429) is the amount they could sell it for, which is actually more than my purchase price.  Box 2 ($11,896) is what I owed after making several payments.  I was told by Sheraton that they would be selling the "property" to recapture their "loss". 

How do I find my basis in this situation? 

For an exemption, do I have to count the value of my principal home and vehicles that I am still paying off? 

[KrisD15]

If you signed a loan agreement for 13,000 and did not make any down payment, your basis would be 13,000.

Since the 1099-C shows 11,896 you would subtract that from your basis of 13,000 to show a 1,104 loss. 

"For an exemption, do I have to count the value of my principal home and vehicles that I am still paying off?" 

I am not sure what you are asking here, can you explain? 

Is this a different subject?