While plenty of owners love the flexibility that their timeshare can offer, sometimes it's no longer possible to keep their ownership. This can be due to any number of reasons - the expense, the inability to travel or simply changing interests. When making the decision to let their timeshare go, many owners want out of the ownership as quickly as possible and this can be difficult; oftentimes, it can take some time on the resale market before a sale is made and, even then, closing can be a longer process many owners wish to bear with. Recently, the concept of donating a timeshare has taken off. But is it an efficient and reliable way to escape your timeshare?
In order for a charity to benefit from your timeshare, it must be able to be sold for a profit. This means if you've been struggling to sell your timeshare - or see other resales going for very low prices - the charitable organization of your choice might not accept your donation. Since timeshares typically lose much of their value after the initial investment, the charity is forced to rely upon fair market value in order to determine whether your donation will be accepted and this value tends to far, far lower than the thousands of dollars that might have gone into the initial purchase. Furthermore, keep in mind that most resorts will still have transfer and closing fees that will need to be paid when donating your timeshare. Just because you're relinquishing your timeshare to a charity does not mean that transfer fees will be waived.
Aside from altruism, there is one noticeable upside to donating your timeshare - you can acquire a small tax deduction once the charity has sold your timeshare. This has led some former owners to believe they could report an inflated price in order to reap the benefits of deduction. Upon the sale of your timeshare, the charity is required to file form 8282 with the IRS where the selling price is reported. You will receive a copy of this form as well, and if your reported value greatly exceeds the selling value provided, you might be in for a very unpleasant audit!
So the question remains; if you do choose to donate your timeshare, who should you donate it to? There are a few charity organizations out there on the internet who willingly accept timeshare donations - while we can't speak for any particular organization, doing a quick internet search reveals quite a few options and how they would proceed with accepting such a donation. Our recommendation, however, is to first look within your own community - local schools, religious institutions and the community itself might accept the donation to be auctioned off or sold outright. This way, you know exactly where the proceeds from your timeshare are going.
Donations are best when the intent is truly charity - it isn't the "easy out" many owners pursue. If you're considering stepping away from your timeshare and have an organization you'd love to help, then definitely pursue it! But for a quick fix or to recoup any initial investment, it might prove easier to put your timeshare up for resale.