Patrick Michael Posted March 12 Report Share Posted March 12 I have a feeling I know the answer but am hoping I'm missing something. Clients had a timeshare and wanted out. The timeshare was in the husband's name and his wife could no longer travel due to health reasons. They spoke with a representative of the time share company and he recommended that the husband "convert" his time share into the name of the wife, using the "equity" in his time share to purchase the new time share. The wife could then get out of the new time share by providing a doctor's note. Sounded good to them until they received a 1099 S for $75,000. They did not receive any cash in the deal. To the best of the husband's memory, he paid about $35,000 for the time share over 20 years ago (he is going to see if he can dig up the paperwork). Are any of the yearly fees and other expenses they had to pay able to be added to the basis? They have no idea how the company came up with the $75,000 value on the 1099 S. Can the value of the time share be challenged and if so, how would it be presented on the 1040? Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 12 Report Share Posted March 12 Perhaps the $ 75,000 is the current asking price for one of these timeshares? Did they relinquish and turn back ownership of the timeshare in the same calendar year. If they did, wouldn't that generate a capital loss? Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 13 Report Share Posted March 13 3 hours ago, Patrick Michael said: The wife could then get out of the new time share by providing a doctor's note. Sounded good to them until they received a 1099 S for $75,000. They did not receive any cash in the deal. 3 hours ago, Patrick Michael said: They have no idea how the company came up with the $75,000 value on the 1099 S. How can there be a recorded sale if they did not receive any consideration? They received nothing for their shares? Am I missing something here? Quote Link to comment Share on other sites More sharing options...
jasdlm Posted March 13 Report Share Posted March 13 I don't understand the 'new time share'. I know he transferred from him to her, but what was the 'new'? Also, was there debt against it? The fact that the post says 'use the equity in his current timeshare to purchase' sounds like a sale. I'm lost, but you got my attention at 'equity to purchase'. Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 13 Report Share Posted March 13 Perhaps you need to see the actual transaction documents in order to see what actually happened. 1 Quote Link to comment Share on other sites More sharing options...
mcbreck Posted March 13 Report Share Posted March 13 Personally, I'd report it on Schedule D with a cost of $75k. If it's not a viable sale that they received an asset in return, they didn't have a gain and you can't report a loss on the sale of a personal asset. (assuming it's not a business) Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 13 Report Share Posted March 13 I suspect that the timeshare representative that they were working with got kind of creative in his effort to help them out, which resulted in the 1099 S. Quote Link to comment Share on other sites More sharing options...
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