Calculating depreciation for rental income deduction

[davmar1975]

Hi, I'm fairly new to TUG, so hopefully I'm not repeating another thread. We recently rented our timeshare and know we'll owe income tax on the profit. I read Dave McClintock's article 'Income Taxes and Timeshares Rental Income and Losses', which was very helpful. We've owned the timeshare for almost 20 years, so will need to base depreciation on current value.

My question: Is there an easy way (formula, etc) for determining current value? I did read one post suggesting looking for similar timeshares sold on eBay to see what they got, although that advice was for an estate situation wanting a low current value. We're the opposite, we want to value ours as high as the IRS will accept, so we can get as high a deduction as possible.

Any suggestions will be greatly appreciated!

 

[cgeidl]

Use the price the timeshare is being sold retail today.

Hi, I'm fairly new to TUG, so hopefully I'm not repeating another thread. We recently rented our timeshare and know we'll owe income tax on the profit. I read Dave McClintock's article 'Income Taxes and Timeshares Rental Income and Losses', which was very helpful. We've owned the timeshare for almost 20 years, so will need to base depreciation on current value.

My question: Is there an easy way (formula, etc) for determining current value? I did read one post suggesting looking for similar timeshares sold on eBay to see what they got, although that advice was for an estate situation wanting a low current value. We're the opposite, we want to value ours as high as the IRS will accept, so we can get as high a deduction as possible.

Any suggestions will be greatly appreciated!

Hi, I'm fairly new to TUG, so hopefully I'm not repeating another thread. We recently rented our timeshare and know we'll owe income tax on the profit. I read Dave McClintock's article 'Income Taxes and Timeshares Rental Income and Losses', which was very helpful. We've owned the timeshare for almost 20 years, so will need to base depreciation on current value.

My question: Is there an easy way (formula, etc) for determining current value? I did read one post suggesting looking for similar timeshares sold on eBay to see what they got, although that advice was for an estate situation wanting a low current value. We're the opposite, we want to value ours as high as the IRS will accept, so we can get as high a deduction as possible.

Any suggestions will be greatly appreciated!

 

[ronparise]

i wouldn't depreciate. Keep things simple. Money in and money out. if you profit pay the tax.

When you sell pay the capital gains tax

Introducing depreciation into the mix introduces an undo amount of complexity. (be aware that when you sell you will face recapture of the depreciation)

Talk to a tax accountant or tax lawyer before you decide how to do this

I hope I'm wrong but I think you are dreaming if you are expecting a deduction

 

[Roger830]

I have owned rental property. Depreciaton is based on the purchase price minus the appraised value of the land.
Also, even though you elect not to take the deduction, the IRS can upon sale reduce the cost basis by the depreciation that should have been taken, then calculate your gain or loss from that reduced basis.

I have no clue how this applies to timeshares.

 

[TUGBrian]

adding a link to Daves Income Taxes and Timeshares article for all to read!

http://tug2.net/timeshare_advice/TUG_Taxes_and_Timeshares.html