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Purpose of Form
Donee organizations use Form 8282 to
report information to the IRS and donors
about dispositions of certain charitable
deduction property made within 3 years
after the donor contributed the property.
This form is essentially a trigger to an audit notifying the IRS that you probably claimed to much
in a deduction and owe them more money due to the charity selling the TS within 36 months for
less than the credit they gave you.
If title is taken by the NPO but not resold for 36 months then FMV must be determined differently.
The IRS says:
1. The FMV is determined by the best applicable process of:
a.) The original sale price,
b.) The value based on it's income generation (usually doesn't apply to TSs), or
c.) The cost to buy a specific close replacement to the original.
2. Also, the sale is to be based on an arms-length transaction between a seller and a buyer,
neither of which are needing to either sell or buy.
3. A maximum credit of $5,000 can be given by an NPO without a certified appraisal. This will be
dealt with in another article.
So long as it's not sold within 36 months, there's no sale to limit your donation claim. Form 8283
states that if you claim more than $250 you must use it. If you claim more than $5,000 you must
have an appraisal created and signed by a licensed appraiser.
Here's a problem with this process. The NPO is a business like any other and has bills it must
pay. They arrange for donations in order to ultimately receive cash. The NPO gets nothing until
they sell it and DO take on all the ownership responsibilities you had. So, why should they accept
your TS unless they intend to sell it?
Reality is that they really don't have any better way to resell or even rent most TSs than the
actual owner does. For that reason most charities have either a "black list" of TSs they won't
accept or have clauses like the following to prevent their potential liability - "No property will be
accepted for donation if the market analysis concludes that the property can not be sold
for a profit within a three week period." If your property is one of the highest valued and
prestigious resorts like Wyndham, Disney, Hyatt, or Sheraton or in a very high demand, minimal
availability area, it seldom meets this criteria. No matter how beautiful and wonderful it is try a
simple test. Try to sell it on eBay for $100 to see if anyone buys it. This is where a lot of NPO
TSs end up through brokers they use. AND you get stuck with the IRS Form 8282.
When you are contacting charities check into what they do with TS donations. The vast majority
sell them and yours may not sell. A very few charities retain them and rent them out for income.
However, like you, they have to get more rent than the ownership fees are to make any cash so
they are very picky in what they accept. A rare exception can be found a couple of places where
the charity chooses to fight the resort at their own credit crunch game and will take your position
in title to do this. However, for them to make a profit they must charge a fee for their services.
That fee can range from $500 to $5,000 depending on the company. The good thing is that they
can take almost any TS that can be deeded that is free and clear and transferable to their
corporate name - regardless of how run down or decrepit it is.
Paying someone to take your TS sounds terrible, but if you've tried everything else, it may be
your final option. What is your freedom worth? How much does it cost you every year to hold and
hope for a sale? If you've reached the point of willingly paying someone to take your TS and do it
NOW, make sure it's a legitimate charity that can give you the $5,000 income deduction and
NOT resell it within 36 months. If you make more than about $31,000 as a single person or
$62,000 as a married couple, that equates to a tax refund in cash to you of $1,250.
If you're interested in what can be done visit
www.communityhealthtraining.org/Timeshares . One extra note. They don't charge you a
dime for anything until they actually take title. You never pay them directly. All finances are
handled through a qualified and experienced closing company of YOUR choice.
Contact:
Dr. Ken Rich
SeniorDirector@CommunityHealthTraining.org
Want to Test out a timeshare vacation in Orlando? here is where to find out how.
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