Can I Write Off My Timeshare as a Tax Deduction?

Can I Write Off My Timeshare as a Tax Deduction? (Source: - used as royalty free image )

Often, timeshare marketers and salespeople will pitch their wares as a real estate investment. It’s natural, then, for many consumers to infer that their timeshare “ownership” will come with all of the attendant perks of deeded real estate ownership, including tax advantages.

Come tax season, IRS agents and accountants are flooded with questions about timeshares. Is a timeshare, on its own, deductible? What about the loans taken out to pay for it? Or the annual maintenance fees that you’re liable to pay as a timeshare owner?

As our own Michael D. Finn puts it, “only under the rarest of circumstances would the IRS allow any form of deduction on a timeshare purchase or interest expense.”

Most fees that timeshare owners are likely to incur – including closing costs, special assessments, and annual maintenance fees, are not tax-deductible, which you can read more about here, via timeshare industry service RedWeek. Annual maintenance fees on a vacation timeshare – which can range from $500 to several thousand dollars every year – in particular, will never be seen as tax deductible, just as you couldn’t claim a deduction on general maintenance or repair on your primary home.

Because most timeshare resorts have now transitioned to a “points-based” or “right to use” model – which doesn’t actually confer deeded real estate ownership to the consumer – it is hard, too, to claim a deduction for your mortgage interest. In the very rare circumstances where a consumer actually does own and is legally obligated to pay a mortgage on a timeshare property (that is, they took out a loan in order to own a deeded piece of real estate recorded in the public record, and not just a selection of time), you may be able to deduct mortgage interest on your timeshare as a "qualified home." In our experience, however, this scenario is not likely, given the overwhelming prevalence of the "points-based," "vacation club"-modeled system that most resort developers have in place today.

If you bought your timeshare for the express purpose of running it as a business by renting it out, you may qualify for deductions on certain expenses, which you can read more about in this TurboTax FAQ. Note, however, that these kinds of standard business expense deductions would be allowed and appropriate in any kind of business that was being run for profit (e.g. baseball cards, antiques, or virtually any product being bought and sold). In this case, timeshares themselves get no exclusive or favorable tax treatment in the eyes of the IRS.

Led by Attorney Michael D. Finn with 45 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don't hesitate to drop us a line with any questions or concerns.

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