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We purchased a deeded timeshare from Wyndham in 2004 for approx. $15,500. I stopped using it, after my dear wife passed away in 2009. I attempted many times, to inform them, that I wished to sell the property back to them, because they were billing me a monthly maintenance fee, even though I was not using it. When I stopped the payments in 2008, they they foreclosed on a lein of a few thousand dollars, February of this year. Can I deduct a loss on my Fed Tax Return? If so, how do I get started?
Kenneth XXXXXXX XXXXXXXXXXXXX XXXXXXXXXXXXXXXXXX
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.Has Wyndham sent you a 1099C ?
I don't think so. I could check my file.
If they did then that amount is reported as income unfortunately. The IRS requires forgiven debt (which is what a 1099C shows) to be included in your taxable income. The increase in your income level could result in additional taxes owed when you file. Because it was a secondary property, you do not qualify for the Mortgage Forgiveness , which only applies to principal residences. You may be able to exclude the forgiven debt if you can prove you are insolvent, which means your debts exceed your assets.
Unfortunately when this happens it is generally an increase to income and not a loss.
You would show the foreclosure as a sale but because it is personal use property you would notbe allowed a loss either.
I wish I had information that leaned more to a benefit for you.
I guess you have answered my question.
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