Time Share sale

[lpower30]

I have 2 timeshares in Mexico that I would like to sell.  What are the tax implications, if any, in the US of selling those timeshares?

[John-H2021]

Hello 

A time share is considered a personal asset and the sale is reported on a schedule D. If there is a gain it will be taxed at the capital gains rate if there is a loss the IRS doesn't allow you to deduct it.

[lpower30]

Thank you.  Would I be able to deduct any maintenance fees that I have paid for the upkeep of that property?

[John-H2021]

In this case maintanence fees are not deductible

[JStaxer]

Do you know how to enter this in TT as the program is automatically showing it as a capital loss. 

[AmyC]

Be sure to select second home under Other Investment.   See Where do I enter the sale of a second home, an inherited home, or land on my 2024 taxes?

If you used the timeshares for personal use, they are like a second home and the loss is not deductible. If your business used them for business meetings, they could be a business asset. If you always rented them out for income, they could be a rental property.

@JStaxer 

[JStaxer]

Thank you for replying, but I am aware that the loss can't be deducted.  TT does it automatically unless I change the cost basis amount to the same as the sales price to make a zero net. I wanted to know how to avoid that problem.

[MarilynG1]

Enter it in TurboTax as the Investment Type Other.  I tested this with a Cost Basis less than Sales Proceeds, to generate a loss situation. 

You should get a screen as per screenshot below.  The transaction then doesn't show on Schedule D. 

Capital assets held for personal use that are sold at a loss generally do not need to be reported on your taxes unless specifically required such as if you received a  Form 1099-S for the sale of real estate. The loss is generally not deductible, as well.

Here's more info on How to Enter Sale of Second Home, Inherited Home or Land and Guide to Schedule D. 

@JStaxer 

[JStaxer]

I do have a 1099-S and need to report it. TT directs me where to add the 1099-S information and that is under "investment income" since this is a timeshare sale. When I add the correct tax basis, it creates a loss. 

[DaveF1006]

Yes, This will create a loss if you sold this for less than your basis. Although you can't claim a loss, you won't owe any income on this either.

@JStaxer