Selling Timeshare Properties
tax info on 1099A for aboudonment of secured property?
I abandon a timeshare that I had a mortgage on. The timeshare company had me sign off on deed and forgave the mortgage. the balance of principle outstanding was 11302.32. I was told I have to show this as income. The timeshare sells for double that. I feel I lost money. Do I have to show this as income on my taxes
On your 1099A, it will show the debt outstanding and the fmv of the timeshare.
If the FMV is greater than the debt shown on the 1099-A, you “sold” the timeshare back for the remaining debt. Your report this sale on the 1040 schedule D (any loss is non-deductible) and you would no have “cancellation of debt income.”
If the FMV shown on the form is LESS than the debt remaining and the form says yes, you were liable, then the difference is cancellation of debt income and goes on line 21 of the 1040. (There is an exception if you are in either bankruptcy or are insolvent.)
If it would have sold for double what you owed, *YOU* should have sold it and pocketed the difference.
The Big Bang Theory – A Time-Share Time Machine