How do you report a sale of a time share to an upgrade timeshare?

Forum|Forum|1 year ago
March 6, 2025
1 reply
16 views

Client really just exchanged her 2 separate timeshares at one place to upgrade to 1 much better time share.

They sent her 2 1099s forms showing the proceeds valued totally over 200,000 and exchanged it for one valued at around 325,000. They told her to just wipe it out and there will be no taxes on it.

I am trying to figure out how this works, i do understand it's long term since she has owned theses for numerous years and probably only paid like 75% of what they gave her as a upgrade.

Please explain this to me and how to treat these 2 1099s forms.

ProSeries Professional

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Best answer by shf1957

Fully understand the difference with trading in a section 179 busn vehicle and a personal transaction. I don't really need to know what the value of the time share that they traded up to is worth.. I just needed to know if there was such a NEW thing on exchanges of personal second homes/vac home for new ones. My earlier belief and guess is .. there is not. I will eat my losses on all the time spent on the rest of this tax return prior to the 1099s on the time shares and move on to the next.

Problem solved. The Time Share Company is sending a statement stating that the client paid the same price years ago, with the date, for the same price they stated was the proceeds of the sales of the time shares. Said it's a wash. As long as there is a statement, i will enter the info on a sched D to show the cost/ proceeds and zero income etc... (Some day the time share companies will be audited for their way of doing things).

shf1957Author

Level 6

As of right now I put it separately on Schedule D part ll proceeds the same price as cost.. no gain no loss. (thought this might be the way to handle this since it wasn't a home, just time shares being exchanged/turned in for a much more elaborate time share at the same place),

BobKamman

Level 15

So she paid $150,000 for something she sold for $200,000 and you're just going call it "no gain, no loss"? That's creative.

Section 1031 exchange rules don't apply to property held for personal use. If "they" are telling her how to report it, let "them" prepare and sign the return. If IRS can't trust time-share promoters, whom can they trust?

shf1957Author

Level 6

This is why I am asking you all this question. Seriously, I have never heard of being able to trade one for another without having to report the gain. It's reported on a 1099S as proceeds. The party wrote me a note and said that this is not to be reported as income that its an exchange. (I felt well if it was an internal exchange then why a 1099b) In my mind, which could be wrong, It was like if you had a second home and sold it.. you must state what you bought it for and take any gain... and if you did buy a new one/exchange that was your choice. But on the other hand, I have been set straight with what Catholic Fathers can deduct off their pension and double dip on deducting the same expenses on their schedule A form.( And that was documented through the IRS to be allowed).

So I thought maybe, this is something else I should be educated on, Regarding time share exchanges. I only put it on a Schedule D just to have it on the file right now. But no I am not comfortable with it stating a wash out.

Please if anyone can tell me if they are 100 percent wrong re: no tax/no gain applicable.

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