Timeshare donation companies sell their services as being only beneficial to you and to society at large. The emotional hook of “help the world while you help yourself” is very powerful, but is this the reality of the timeshare donation industry?
Timeshare owners regularly find that the resale value of their “own little corner of paradise” is just a sliver of what they originally paid; listing timeshares on Craigslist or eBay is a futile attempt to recover losses, and paying shady resellers a hefty commission rarely (if ever) results in a sale of any substance.
For owners wishing to side-step one of the many timeshare resale scams, timeshare donation companies look encouraging. Most claim to provide help to assist in title transfer, market the resort timeshare property and donate some of the resulting profits to charities like the American Cancer Society.
Yet discharging your getaway villa may not be as straightforward or economical as the timeshare donation companies ‘ pitch portrays. To donate a timeshare, you may firstly transfer title to the timeshare donation company, however, you’ll likely end up being required to pay upwards of $2,500 or more to process the title transfer and secondary documentation. Timeshare donors are informed they can recoup numerous times that quantity ($6,000, based on several websites of timeshare donation companies) by declaring the timeshare’s “value” as a charity donation on their tax return.
What timeshare donation companies don’t tell you is that the IRS sees things VERY differently. Timeshare owners might be drawn into the entire timeshare donation scenario by believing they can declare a five-figure value based on what they originally purchased the timeshare for or just what the hotel is currently requesting for comparable units. The truth is that the amount you can lawfully claim as a deduction depends upon the “reasonable market price;” just what an “educated buyer” would be willing to pay, not what an overly-optimistic appraiser states it might be worth. Timeshares given away to timeshare donation companies sometimes market for less than $100, which the donation company must declare to the IRS.
Daniel Borochoff, president of the not-for-profit watchdog organization CharityWatch, supplies these suggestions on how you can donate with confidence.
1. Check charity review sites like CharityNavigator.org, CharityWatch.org, GuideStar.org and that of the Better Business Bureau (bbb.org/charity) to view financial declarations and view the ratings of the charitable organization.
2. Seek charities that direct the majority share of donations to program expenditures; they should be using at the very least 65 percent of donations to promote the main cause of the charity.
3. Do not be seduced by “complimentary” calendars or labels. It’s illegal for charities to require payment for items you did not specifically order on your own accord.
Timeshare donation companies may be able to aid you in leaving behind your timeshare deed and associated financial obligations (at a cost of a few many thousand dollars), but counting on the benefit of a sizable tax write-off for the “charitable donation” could buy you a whole heap of disappointment and a possible audit. Take heed that the typical timeshare donation creates usually less than $50 to downstream charities, if even that. Considering all this, you may be much better off just cutting a check directly to the charity of your choice rather than fall for shady half-truths and false promises that timeshare donation companies will lure you with. If philanthropy is your priority, just create a check directly to a charity of your choice.