How To Deduct Your Timeshare Stays

If you own a timeshare and use it only for personal and business lodging, you have a unique opportunity to maximize your tax benefits.

Big Benefit

The IRS allows timeshare owners who do not rent their property to claim deductions for business-related lodging without being subjected to the grim vacation-home rules.

Guidelines for Maximum Tax Benefits

  1. Exclusive use for business and personal lodging. With no rental, you maintain eligibility for business and personal tax advantages without suffering from the vacation-home rules.
  2. Business deductions for lodging expenses. Under IRC Section 162(a)(2), ordinary and necessary business expenses such as timeshare lodging are deductible when traveling for business.
  3. Personal use. Personal use of a deeded timeshare does not qualify for business deductions, but it can qualify as a second home eligible for second-home mortgage interest deductions.

Records Strategy

Keep detailed records of your timeshare use, separating business from personal days to audit-proof your deductions and ensure compliance with IRS requirements.

Relatives

Here’s a good rule to know for timeshares: days of rental to a defined relative count as personal use days by you. In other words, the tax code does not recognize as rental days the days you rent your timeshare to a defined relative (close relatives such as parents, brothers, children).

If you want my help examining your timeshare use, please contact us today!

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