Looking to give back timeshare / Vistana/Marriott

[jwalters2770]

We owned a Time share with Vistana/Marriott group. It was working out great for travel. Just before Covid hit our sales rep contacted us with a limited deal for current owners and that was to purchase more. We like to travel and had planned on doing much more. Well covid hit and as many our income was effected with job loss. We reached out to Vistana over and over again asking for help in lowering payments whatever we could do to keep it. They did not care and said it will go into foreclosure. We had to make a decision do we eat and pay our home mortgage and necessary bills. We had tried to rent using Redweek it helped to a point. Then nobody was travelling and we had maxed out credit cards trying to save the TS. We were at a loss have to turn to a debt consolidation company for the credit cards we could not get any help for the TS. It was foreclosed and then we received the 1099-C Cancellation of Debt. Our credit took a little hit but with making payments on our home and cars never being late we have managed to stay in the mid 600's. Our biggest issue is with the 1099-C the "Fair Market Value" was way too high considering they turn around and just sell it again over and over. We have an enormous tax bill due to this and trying to refi our home to pay for it. We will NEVER get involved with ANY TIMESHARES again!!

 

[TUGBrian]

How much did they claim the FMV of the timeshare was worth? I was under the assumption that the 1099-c was simply based on the amount of debt that was forgiven?

 

[5finny]

We owned a Time share with Vistana/Marriott group. It was working out great for travel. Just before Covid hit our sales rep contacted us with a limited deal for current owners and that was to purchase more. We like to travel and had planned on doing much more. Well covid hit and as many our income was effected with job loss. We reached out to Vistana over and over again asking for help in lowering payments whatever we could do to keep it. They did not care and said it will go into foreclosure. We had to make a decision do we eat and pay our home mortgage and necessary bills. We had tried to rent using Redweek it helped to a point. Then nobody was travelling and we had maxed out credit cards trying to save the TS. We were at a loss have to turn to a debt consolidation company for the credit cards we could not get any help for the TS. It was foreclosed and then we received the 1099-C Cancellation of Debt. Our credit took a little hit but with making payments on our home and cars never being late we have managed to stay in the mid 600's. Our biggest issue is with the 1099-C the "Fair Market Value" was way too high considering they turn around and just sell it again over and over. We have an enormous tax bill due to this and trying to refi our home to pay for it. We will NEVER get involved with ANY TIMESHARES again!!

See a good accountant or tax attorney
There are exceptions to realizing income from cancellation of debt
I am not qualified to give tax advice but I know insolvency or reduction of basis can sometimes work to avoid tax consequences
May or may not work here but probably worth the effort
Good luck

 

[dioxide45]

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[iftravel]

We owned a Time share with Vistana/Marriott group. It was working out great for travel. Just before Covid hit our sales rep contacted us with a limited deal for current owners and that was to purchase more. We like to travel and had planned on doing much more. Well covid hit and as many our income was effected with job loss. We reached out to Vistana over and over again asking for help in lowering payments whatever we could do to keep it. They did not care and said it will go into foreclosure. We had to make a decision do we eat and pay our home mortgage and necessary bills. We had tried to rent using Redweek it helped to a point. Then nobody was travelling and we had maxed out credit cards trying to save the TS. We were at a loss have to turn to a debt consolidation company for the credit cards we could not get any help for the TS. It was foreclosed and then we received the 1099-C Cancellation of Debt. Our credit took a little hit but with making payments on our home and cars never being late we have managed to stay in the mid 600's. Our biggest issue is with the 1099-C the "Fair Market Value" was way too high considering they turn around and just sell it again over and over. We have an enormous tax bill due to this and trying to refi our home to pay for it. We will NEVER get involved with ANY TIMESHARES again!!

You shouldn't have to pay full amount of tax on canceled debt. See below from IRS

Topic no. 431, Canceled debt – Is it taxable or not? | Internal Revenue Service

Topic No. 431 ,Canceled Debt – Is It Taxable or Not?

www.irs.gov

If it's a recourse loan, you likely have at least a relief in booking a realized loss in your TS purchase (which is not ideal, but the realized loss can offset your income but capped at 3k a year, unless you have other realized gain)
If it's a non-recourse loan, you can book a net loss considering your basis in TS (likely your original purchase price). This is the ideal situation as you basically can take the 1099-C the canceled debt, and subtract your original purchase price of the timeshare, and net it's likely a loss to you and no tax owed.