taxes on week rented out

[rapmarks]

If the duration of the rental is more than seven days, there would be no Section 1.469-1T(e)(3)(ii)(A) of the Temporary Income Tax Regulations and IRS Letter Ruling #9505002 (which state that a 7 day or less rental that results in a loss is, by definition, a passive activity loss) would not come into play so it would be a plain vanilla, ordinary loss that could be taken or included in your that year's taxes.

And, according to Dave M, CPA and timeshare owner and TUG contributor, if the Section 1.469-1T(e)(3)(ii)(A) of the Temporary Income Tax Regulations and IRS Letter Ruling #9505002 7 day limitation DOES apply:

...Thus, you're pretty much stuck with carrying over such losses to use against positive taxable income from your rental activities in future years. You can also deduct any carryover losses related to a rental property in the year you sell that timeshare.

So I don't know why he assumed you had to wait till "future years" to offset possible taxable income from rental activities with net timeshare rental losses. It seems clear from what Dave M wrote (...It falls into the passive activity loss rules of §469 of the Internal Revenue Code. Those rules prohibit deducting such losses except against other passive activity income. Such income is narrowly defined and doesn't include, for example, dividends, interest or other investment income....) that you can use those "passive activity" losses anytime you earn positive timeshare rental net income. So perhaps the Tax Assistance program, in denying you the right to deduct any timeshare passive activity losses while simultaneously having you pay taxes on the timeshare passive activity net income you earned MAY BE incorrect. At least according to Dave M and §469 of the Internal Revenue Code.

And Dave M's interpretation of the pertinent tax code provisions makes sense. If you have both timeshare taxable income on one timeshare you rented, and also have a net loss on another timeshare you rented, why couldn't you offset one with the other? The nature of the income and loss, i.e timeshare rental income and loss, i.e., timeshare passive activity income and timeshare passive activity loss, is exactly the same.

So you rent and do your own taxes and are speaking from your experiences?
I have not seen a post by Dave M in many years, but I do know that tax laws were changed a few years ago and they limited deductible advantages.
But guess what, when I submit my tax return, I do it based on professional advice, not a stranger on the internet.

 

[andre10056]

I agree with you 100%. I've never incurred a loss on any timeshare I ever rented but this is a discussion forum discussing an issue that may pertain now or in the future to any and all timeshare owners who rent their timeshares. I'm not advising anyone on what to do, merely reviewing what professionals have stated. The discussion is more along the lines of "issues" to be aware of. And I would suggest that you familarize yourself with those issues if a timeshare rental loss may be in your future so that you can point your tax consultant in the right direction of the appropriate tax code provisions as have been revealed above...because the average tax professional likely has no clue about any of the above as pertains to timeshares.

 

[chapjim]

Whether to report it or not often has to do with whether your rentals are trackable. If you rent out to your friends directly and collect money via wire or a check at cost, you are unlikely to be audited by IRS. If you list on redweek and do a rental through them, then your rental is trackable.

It's okay to hold up that liquor store as long as you think you won't get caught, right?

 

[VacationForever]

Still a crime to not report this, even if it’s unlikely you will be caught.

But if after expenses it is $0, there is nothing to report anyway.

 

[chapjim]

But if after expenses it is $0, there is nothing to report anyway.

Not so! You have income to report. You may also have related expenses that may or may not offset your income. But you always report the income.

 

[silentg]

Usually rent a timeshare for the amount of maintenance fee, or at least less than the resort would charge someone to rent.

 

[andre10056]

Usually rent a timeshare for the amount of maintenance fee, or at least less than the resort would charge someone to rent.

I would agree that's always the ultimate rental objective and, indeed, I won't own any timeshare that I can't pretty easily rent for more than MFs if it becomes necessary to do so, but that's not always possible. As proved by pretty much EVERYONE who rents last minute via TUG for $800 or less, sometimes much less.

 

[Fido Chuckwagon]

Not so! You have income to report. You may also have related expenses that may or may not offset your income. But you always report the income.

Yes, it’s this.