Amendment to the Portfolio Scam

[Kal]

[Originally posted on Facebook Hyatt Owners]

MORE SALES DECEPTION WHEN COERCED TO SURRENDER DEEDED WEEK for a substantial reduction of PORTFOLIO points...masqueraded as UPGRADING your ownership and/or reducing MF. If you fall for the PITCH you may receive a 1099 due to the concealment that you actually SOLD YOUR DEEDED WEEK IN THE TRANSACTION, FOR AN INFLATED PRICE besides PAYING ADDITIONAL MONEY FOR LESS POINTS!!!!!
This has been reported by multiple owners.

 

[SteveinHNL]

So kind of like trading in a used car as part of a new car purchase, the credit given by the developer towards the purchase price of the new points would be the amount you were "paid" for your deeded week to buy the points? If that occurred, wouldn't you be able to offset those "proceeds of sale" by your cost basis?

 

[mjm1]

So kind of like trading in a used car as part of a new car purchase, the credit given by the developer towards the purchase price of the new points would be the amount you were "paid" for your deeded week to buy the points? If that occurred, wouldn't you be able to offset those "proceeds of sale" by your cost basis?

Yes, but if one bought resale they would likely have a very large taxable gain on the transaction.

 

[SteveinHNL]

Yes, but if one bought resale they would likely have a very large taxable gain on the transaction.

I wouldn't think the developer gave them a lot of credit towards the purchase, but maybe OP could chime in as to how much credit they have been given?

 

[mjm1]

I wouldn't think the developer gave them a lot of credit towards the purchase, but maybe OP could chime in as to how much credit they have been given?

That's possible, but we have received offers from the developer for the amount the original owner paid, which was significantly more than our purchase cost.

 

[wendyleighj]

https://www.irs.gov/pub/irs-pdf/i1099s.pdf

 

[ArizonaSun4Fun]

If you previously bought a timeshare week resale for let's say $1, and are given the original developer purchase price as a credit toward "upgrading" your timeshare to a new real estate product from the developer, (for instance, portfolio points), would that qualify as a like-kind exchange for tax purposes? Even though you are issued a 1099-S, could you defer paying capital gain taxes on the transaction because you bought another timeshare, and then pay the taxes when you sell your points in 10 years for the fair market value at that time. (Of course I am assuming that my timeshare investment will eventually increase in value. )

Of course why would you even do that, but in rare instances there may be a good reason. Any thoughts?

 

[dioxide45]

I still find it strange that so far we are only seeing reports of 1099-S being issued on Hyatt transactions.

 

[Sapper]

If you previously bought a timeshare week resale for let's say $1, and are given the original developer purchase price as a credit toward "upgrading" your timeshare to a new real estate product from the developer, (for instance, portfolio points), would that qualify as a like-kind exchange for tax purposes? Even though you are issued a 1099-S, could you defer paying capital gain taxes on the transaction because you bought another timeshare, and then pay the taxes when you sell your points in 10 years for the fair market value at that time. (Of course I am assuming that my timeshare investment will eventually increase in value. )

Of course why would you even do that, but in rare instances there may be a good reason. Any thoughts?

So, a 1031 exchange?

 

[vacationtime1]

1031 exchanges are limited to investment properties, not personal assets such as timeshares.

I suppose if one rented out a timeshare for a few years (and reported the rental income for tax purposes), exchanged that timeshare for another timeshare, and then rented the exchanged timeshare for a few years (and reported the income for tax purposes), a 1031 claim would be valid. But I doubt that happens often.