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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 9688
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Ownership in a timeshare was returned to seller and the

Customer Question

Ownership in a timeshare was returned to seller and the contract was rescinded. Are funds refunded to buyer taxable income?
Submitted: 2 months ago.
Category: Tax
Expert:  Lane replied 2 months ago.

Hi. I'm Lane. I can help here.


No, not at all.


Although there will be no taxable loss (if less was refunded than invested originally) becasue IRS has ruled time shares to be a personal use capital asset...


It's still a capital investment that was not deductible, which would reduce any gain on sale ... and unless more was returned than invested, there is no capital gain.


Hence, no taxable income.

Expert:  Lane replied 2 months ago.

Please let me know if you have any questions at all.


If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here


Thank you!


I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

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