Tax Deadline Nears; Don’t You Wish You Owned a Timeshare?
Tuesday, April 10, 2007
You can’t deduct the cost of the hotel room or vacation condo you rented for your last family vacation. But if you own a timeshare unit, you may be able to take advantage of some worthwhile deductions.
Let me start by saying that I am not a tax authority. I leave the preparation of my own income taxes to someone who is trained and certified in these areas. But as the deadline to file federal and state income taxes approaches, I do want to remind you about some possible income tax deduction opportunities you may want to explore.
The IRS has generously given you not one but two extra days to file your federal income taxes this year. The first bonus day occurs because the traditional filing day, April 15, falls on a Sunday. The second bonus day occurs because the 16 is a legal holiday, known as Emancipation Day, in the District of Columbia. Many states will extend their filing deadline to the 17 to be aligned with that of the federal government. Other states say that because they do not observe Emancipation Day as a legal holiday in their state or commonwealth, the deadline for filing your state income taxes is April 16—one day sooner than your federal tax paperwork is due.
Either way, this discussion begs the question, “where do timeshare units fit in here?”
In some cases, and only an income tax expert can advise if this applies to you, you may be able to deduct the interest and/or the property taxes and insurance you pay on your timeshare vacation property in the same way you can deduct those items on your personal residence.
Every situation is different. The type of timeshare vacation ownership you have, the terms of your ownership, and your own personal tax situation, all factor into your options to deduct some or all of your costs. And the rules that apply to your federal income taxes may or may not be applicable to your state income taxes.
Do not buy a timeshare unit or timeshare vacation property because you see it as a potential income tax deduction. But if you already spend money each year on hotels, motels, or vacation home rentals, you know there are no tax breaks there. So why not talk to your tax advisor and find out if owning timeshare vacation property could mean tax breaks for you?