[2006] Donate Week to Charity

Looks like I will end up with an extra week I have already deposited to II.
I want to donate it to a local Charity Auction for Alpha Pregnancy Resource Center to use during their auction in October.

I was thinking of just booking a good Christmas Week in Orlando and then donating that.

What do I need to do - Just book the week, have them auction then go back and have II issue it as a guest?

Is this ok with T&C of II.

Any advice if I should pick somewhere else or anything else that I might need to know to make this happen.

Re: Donate Week to Charity

Although not specifically discussed in the II T&C, II doesn't have any problem with the donating of weeks to charity. An example of the authorization is here. (Craig U was II's former rep to TUG).

Keep in mind that the tax law prohibits taking a tax deduction for the donation of the use of property (which would include your donation).

Re: Donate Week to Charity

I donated a Manor Club week to my aughters school auction several years ago. The winning bidder contacted me. I asked them to give me three different dates they would like called Marriott and booked one and then wrote a letter to the front desk of the Manor Club and advised them of the names of the people who would be using the week. I was told that I did not need a certificate since the week had never passed through II .
Also Dave where did you get the information that you cannot take a deduction for the week if you give it to a charity. Our tax guy (CPA) said we could take a deduction for the week and we did.

Re: Donate Week to Charity

I agree with Dave. Our tax guy read us the portion of the tax code which disallows deductions for donating a week of timeshare use. You must donate your entire timeshare away, nor just one week usage.

Re: Donate Week to Charity

Kathy -

I think you need a new CPA!

As Judy states, the Internal Revenue Code is very clear that a tax deduction is not allowed. The actual provision states that a donation deduction is not permitted (with a few exceptions related to trusts) for any donation that doesn't include a transfer of the full ownership of property.

In other words, you can take a tax deduction for transferring the ownership of your timeshare, but not for donating the use of a week. There are examples in various IRS rulings that specifically cover (and disallow) deductions for donation of the rent-free (or bargain-rent) use of property, such as a timeshare.

Your CPA should refer to Internal Revenue Code §170(f)(3) and Regulations §1.170A-7.

I'll be happy to pay both you and your CPA $100 each if he/she can come up with authority that allows such a deduction! How's that for a challenge!

This tax rule has been explained regularly here on TUG over at least the last nine years. It's also been in the TUG tax article in the Advice section for all of those years. To date, no one has come up with any citation that would allow such a deduction or suggested that the above citations specifically disallowing the deduction are erroneous.

Still, it's a rule about which many tax professionals give incorrect advice. Common sense suggests that if you donate something that has value, a tax deduction should be allowed. Unfortunately, as we all know, there are a lot of things about the tax law that don't necessarily make sense.

Re: Donate Week to Charity

Had not thought about donating a week to a charity. If I do an exchange with II for a specific week at a specific timeshare, and then " give" that to charity for their silent auction? Then.. do I notify II the name of person who will be using the week?

Re: Donate Week to Charity

You must purchase a Guest Certifiacte. From the II Terms and Conditions:

Accommodations may be used only by the Member and accompanying guests, unless a Guest Certificate is obtained from II. There is a fee for each week assigned via a Guest Certificate....

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Re: Donate Week to Charity

Here is the example from page 8 of IRS Publication 526 - Charitable Contributions:

Mandy White owns a vacation home at the beach that she sometimes rents to others. For a fund-raising auction at her church, she donated the right to use the vacation home for 1 week. At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. Mandy cannot claim a deduction because of the partial interest rule. Lauren cannot claim a deduction either, because she received a benefit equal to the amount of her payment.

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See my post above for an explanation of the partial interest rule: A complete transfer of the ownership of the timeshare is required to be allowed a donation deduction.

Re: Donate Week to Charity

I will check with my CPA again the next time I speak to him which I try not to do very often. I do know that we did take the deductiion and the IRS hasn't said anything so SHHH

Re: Donate Week to Charity

You can make it easy for him, Kathy, by printing out a copy of this thread (except for my suggestion that you get a new CPA!), so that he has some legal citations to start with.

Re: Donate Week to Charity

In the link with Craig's reply, it seemed like they obtained a unit at a timeshare they didn't own and donated that week.

I'm not a tax guy, and not expecting any Tuggers to be either, but based on what you've heard from your tax guys, would you still interpret the tax code (thanks for the link Dave) that that you can't write off donating a week at a resort you don't own? (since you can't donate the timeshare because you don't own a week there).

Re: Donate Week to Charity

The rule is that you cannot take a tax deduction for the use of property. Donating the use of property is considered to be donating a "partial interest" in property, which doesn't generate a tax deduction. In your example, all you own and are donating with the week you are discussing is a partial interest in the property, not full ownership. Thus, no deduction.

Stating it another way, you owned a week and traded the use of that week for another week, which you now donate. The tax rules don't allow you to circumvent the no-deduction rules merely by doing an exchange.

How about if you pay to rent a week and then donate it to charity? Same result. No deduction. The way to get a deduction in this case is to donate the money to the charity and have the charity rent the week. If you already rented the week and later donated it because you found you can't use it, you're just out of luck on the tax deduction.

(Incidentally, I am a "tax guy". I have been a CPA for almost 40 years and almost all of my professional experience has been in the tax arena. That's why the links come so easily for me. )

This is an old thread, but applicable to my question. I recently found a new charity mentioned in AARP magazine. I was intrigued and wanted to know more about this idea of donating a week to a charity.

The charity is http://vacationsforveterans.org They have a list of donated weeks which is made available to their screened members. All members have to be Purple Heart Veterans. They are a civilian organization, with 501(c)(3) non-profit status.

On their site (in the faq) it says:
http://vacationsforveterans.org/Timeshareupload.aspx

Is this donation tax-deductible?
Unfortunately, no. The IRS has issued a ruling that 'donations of partial interest in time are not deductible charitable events.' However, any fees that you pay on behalf of the veteran (ie, transfer fees, etc) are tax deductible donations, and we can issue you a tax receipt for such donations.

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So... does that mean the maintenance fees for the week donated for a veteran would be tax deductible? The maintenance fees for a particular week donated or for the points used for that week would be expenses related to the donated week for the veteran. Or would the only allowed deduction be a possibly needed guest certificate or housekeeping fees? It seems fair to allow the MF. The law is not always fair though I've found.

Also noted is that veterans get to pick their vacations from a list and there's no guarantee your week will be picked.

No - the maintenance fee for donating one week's usage is not deductible.

Denise is correct. No charitable deduction is allowed for any of your normal expenses in connection with your timeshare ownership when donating the use of a week. It's deemed to be the donation of only a partial interest of your timeshare ownership.

However, here is an example of a deduction that would be allowed: If you purchase an I.I. Getaway week and donate the getaway to charity, which would be allowed by I.I., the costs of the Getaway and the Guest Certificate are both normally deductible as charitable donations. Why? Because you are donating your entire ownership interest in what you purchased.

I said "normally" deductible because there are some exceptions. An example would be where you purchased a Getaway and, before you could use it, a hurricane destroyed the resort, making your Getaway worthless. If you donate the worthless week, your allowable deduction would be zero (the lesser of your cost or the value of the week).

I have very strong personal feelings about accountants, CPA's, Tax auditors and the US tax code. I will not reveal them on this board.

I can announce that I am praying for rain in Sun City and Northern CA for the next two years.

:rofl: :hysterical:

jimf41 said:

I have very strong personal feelings about accountants, CPA's, Tax auditors and the US tax code. I will not reveal them on this board.

I can announce that I am praying for rain in Sun City and Northern CA for the next two years.

:rofl: :hysterical:

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Okay, Jim. I may have missed the context of your message.

Thanks to the others for their input. Guess a donation doesn't have the same value as a rental in recouping costs. Actually what the law does is say the donation has zero value, if I can't recoup what it actually costs me to use the same week.

Cheryl,
It's well after midnight here in NY and that was a little humor gone awry. But all those guys I mentioned are the ones that somehow figured out that if I lose money on a stock I still have to pay tax on the dividends. I don't understand not getting a charitable deduction for donating something tho charity either.

Woe is us. We don't make the rules, we just have to play by them.

Jim -

Here is the general theory that the Congressional Committee reports show that Congress had in mind in enacting the law that prohibits a deduction for the charitable donation of (among other things) a week's use of your timeshare.

If you give cash to a charity, you are spending money that you could have otherwise spent on yourself. Obviously, a deduction is allowed for that cash donation. However, at the other end of the spectrum, if you donate a weekend at your vacation home (not a timeshare) rather than using it yourself or letting friends use it, you normally don't incur extra costs for that donation. Thus, Congress enacted a law that prohibits such deductions - for the donation of a partial interest in property.

As it relates to your timeshare week, the situation is similar. Because you own the timeshare, you have a personal obligation to pay maintenance fees. When you donate a week to charity, your maintenance fee expense - a personal expense - doesn't change. Thus, since you are not out of pocket for any additional expense, you are not entitled to a deduction.

That explanation is an oversimplification because there are situations where you might incur extra expense in connection with such a donation (e.g., utility expenses for a weekend at your vacation home when it would not have otherwise been used) and still not be eligible for a deduction.

But at any rate, that's the theory. As for fairness, I don’t think there are many people who contend that all of our tax laws are fair.

Lastly, as to your wish for two years of rain where I live, I think you will find that many CPAs are active in lobbying for tax laws that are consumer-friendly. The international CPA firm that I was with for 31 years of my career has always been a leader in testifying before the House Ways and Means Committee on tax legislation - almost always in efforts that would help you and me.

I'll take the rain - we never get enough rain where I live!

Dave M said:

As it relates to your timeshare week, the situation is similar. Because you own the timeshare, you have a personal obligation to pay maintenance fees. When you donate a week to charity, your maintenance fee expense - a personal expense - doesn't change. Thus, since you are not out of pocket for any additional expense, you are not entitled to a deduction.

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Using that logic, there's no need to rent your TS week either; as, if you don't use it, you really are not losing anything! Sheesh

My apologies to Dave M and Denise. There should be a rule about PWI (posting while intoxicated). It was late, the dinner guests were gone and I guess I thought what I wrote was humorous. When I read it this afternoon it didn't appear anywhere near as funny as it did last night. Sorry folks.

Dave M said:

I think you need a new CPA!

As Judy states, the Internal Revenue Code is very clear that a tax deduction is not allowed. The actual provision states that a donation deduction is not permitted (with a few exceptions related to trusts) for any donation that doesn't include a transfer of the full ownership of property.

In other words, you can take a tax deduction for transferring the ownership of your timeshare, but not for donating the use of a week. There are examples in various IRS rulings that specifically cover (and disallow) deductions for donation of the rent-free (or bargain-rent) use of property, such as a timeshare.

Your CPA should refer to Internal Revenue Code §170(f)(3) and Regulations §1.170A-7.

I'll be happy to pay both you and your CPA $100 each if he/she can come up with authority that allows such a deduction! How's that for a challenge!

This tax rule has been explained regularly here on TUG over at least the last nine years. It's also been in the TUG tax article in the Advice section for all of those years. To date, no one has come up with any citation that would allow such a deduction or suggested that the above citations specifically disallowing the deduction are erroneous.

Still, it's a rule about which many tax professionals give incorrect advice. Common sense suggests that if you donate something that has value, a tax deduction should be allowed. Unfortunately, as we all know, there are a lot of things about the tax law that don't necessarily make sense.

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Couldn't the charity just rent the week from you in exchange for FMV, and then you voluntarily donate the cash back to the charity and take the deduction?

II prohibits the rental of exchanges and I don't believe there is an exemption for charities.

Heads up - this is a 2006 thread


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