How to Donate Your Time Share to Charity
Donating a paid-off time share to a charitable organization like the American Kidney Fund or United Cerebral Palsy is a viable and often better option than trying to sell it on your own. Although you won t profit financially, a tax write-off option for the fair market value allows you to recoup some of your investment. Although most charities work through an intermediary to simplify the process, the potential tax implications make getting professional assistance and advice a wise choice for you, too.
Choose a Charity
Locate charities that accept time-share donations. If you don t already have one in mind, search through an online database such as GuideStar, Charity Navigator or the Better Business Bureau Wise Giving Alliance. Make sure the charity is tax-exempt and that your donation will be tax deductible. Since most charities accept donations through an intermediary such as Donate for a Cause or Real Estate for Charities instead of directly, find out how much the charity will ultimately receive. Finally, make sure the charity will accept your donation.
Paperwork and Taxes
To claim a tax deduction for a time share valued under $5,000, you ll need to itemize deductions on Internal Revenue Service Form 1040 Schedule A. If the value of your time share is more than $5,000, you ll have to file IRS Form 8238, Noncash Charitable Contributions, along with Form 1040 and a copy of the property appraisal. Get this form before getting started because it requires signatures from an IRS-qualified property appraiser and the charity.
Value Your Time Share
Determine the time share s fair market value. If your time share is worth more than $5,000, the IRS requires a professional appraisal that s not more than 60 days old. If the value is less than $5,000, work with your accountant or tax attorney to determine and document the value. Make three copies of the appraisal or other valuation document — one for your records, one for your tax return and one for the charity.
Complete the Transfer
According to Donate for a Cause, the process of donating a time share takes about 12 weeks. It starts with filling out and returning the donation agreement, a copy of your deed and, if necessary, IRS Form 8238. Upon receipt of this paperwork, and before drafting a new deed, a closing company that works with the intermediary will conduct a title search and verify that property taxes and any maintenance or other resort fees are current. You will then receive a new deed that transfers ownership from you to the charity. After you sign it, have the new deed notarized and return it to the charity or its representatives; that s when you ll receive a tax receipt for your donation. You remain responsible for paying maintenance and all other fees until you receive the tax receipt.