Donate Timeshare to Charity is a timeshare of the legal ownership of a vacation home. However, timeshare units are owned by several owners who are all listed on the deed of purchase. Selling a timeshare is often expensive due to the many commissions, transfer fees, and advertisement fees.
Moreover, a lot of maintenance fees are required each year. As such, reselling a timeshare unit often leads to a loss which is why timeshare owners opt to donate to charity. Read on to learn more about how you can donate timeshare to charity.
How Charity Organizations Utilize Timeshare Donations
Donation of timeshare units has gained popularity in recent years especially with the many resale scams. Besides why waste time to sell a vacation property which won’t materialize but will instead cost you?
Most charitable organizations accept property donations which is a relief for the owners. But how do the charity organizations utilize the timeshare properties?
Here is how.
Ideally, charity organizations use timeshare donations to rent out to other donors as a means of generating revenue. Besides, charity organizations can quickly sell a timeshare during charity events.
Other organizations use the property to rent out to vacationers to earn income. The organizations that sell the timeshares then use the proceeds to finance different needs within the charity.
How to Donate Timeshares
The process of donating your timeshare to charity is easy. However, you need to have these documents to ensure the process runs smoothly.
– Mortgage receipt to confirm the property has no debt
– Property title deed
– Property name
– Timeshare agreement
– Previous maintenance bills
– Timeshare tax receipts
Why People Love to Hate Donate Timeshare to Charity
If you have the above documents, you can approach a charity organization and ask them to accept your donation. Usually, the organization has a right to accept or reject such an offer depending on the condition of the property.
If the vacation home is in proper condition, the charity will require you to sign on a donation agreement form. The form is crucial, especially when you want to claim tax deductions from the IRS.
Timeshare owners should note that their property isn’t acceptable if any mortgage fees are still owed to a lender. Besides, the property should not have any tax balances or unpaid maintenance fees.
The good news, however, is that, once the process is complete, the original timeshare owner is relieved of the property and any financial obligations.
Reasons to Donate to Charity
The most important reason why you should donate your timeshare to charity is that you help others.
Yes, you may think that you’re only relieving yourself from the liability but in reality, you’re helping communities.
Imagine if your timeshare donation would go towards helping babies who cannot afford good clothes, it’s such a great course, right?
Secondly, you can get some tax relief in the subsequent years. For instance, if you were paying $ 2,000 worth of tax yearly, after donation, you aren’t liable of the taxes. Hence, you can save money and do more productive projects.
Lastly, another reason why donate to charity instead of selling your timeshare is cost. Usually, you’d spend between $ 500 to $ 3,000 to advertise your timeshare.
Donate Timeshare to Charity: Expectations vs. Reality
Probably, the timeshare wouldn’t even fetch close to that amount once the fair market value is determined. Instead of making a loss, you can choose to donate the timeshare to an organization that would better utilize it.
Fair Market Value of a Timeshare IRS allows donors to claim a fair market value of the timeshare as soon as you give it up for donation. You’ll need to submit a form 8283 to IRS if the fair market value of the timeshare is above $ 500.
However, if the fair market value of the property exceeds $ 5,000, you’re required to have an official appraisal form. That conforms to the guidelines of IRS.
Just like a car and other real estate properties, a timeshare depreciates over time. You can’t expect the timeshare to value at the same price you bought it.
Therefore, if your timeshare is worth more than $ 5,000.
Then you should consult a professional CPA or attorney to conduct an analysis to arrive at the best market value.
IRS dictates that the appraisal form shouldn’t be more than 60 days old from the date of the donation.
Besides, as a donor, you’re expected to pay for the appraisal fees. You should also issue the charity with a copy of the appraisal form.
Usually not later than the 15th of October the year after the donation was made. How bout Donating Baby Clothes?
Claiming Tax Deductions
When claiming tax deductions from the IRS, you have to include your full names. And the name of the receiving organization. Also the name of the certified appraiser.
As you file for tax deductions, you should also explain how you got the timeshare. It could be via inheritance, a gift, or you purchased the timeshare yourself.
Besides, also have a rough estimate of the day you gained ownership to the timeshare if you can’t recall the exact date. Also include an assessment of the property as well as other additional costs if any.
In a nutshell, you can donate a timeshare to charity as a way of helping the needy while at the same time helping you enjoy tax deductions. Besides a timeshare donation saves you from contributing towards maintenance costs.
You also don’t have to incur a loss trying to resell your timeshare because over time they depreciate. However, to earn tax deductions, you have to claim with the IRS and also meet their guidelines.