Down to your last resort? Donate your time share
By Dana Dratch • Bankrate.com

Stuck with a time share unit you can't use, can't rent, can't exchange -- heck, when you've tried to sell it, it seems like you can't even give it away?

Well you can -- give it away, that is -- and actually that might be your best choice, not your last resort.

Many disenchanted time share owners have rid themselves of mounting maintenance fees and taxes by simply walking away -- ceasing to make the payments and prompting foreclosure. But if you're adamant about getting rid of your unit, there's a better way to give it away: Donate it to charity.

It's effective, but we didn't say it's simple. Like any property transfer, the procedure is complicated, so it pays to move carefully, double check all the details and get professional help.

"This is a win-win for time-share owners and for the charity," says Lew Fontek, director of corporate and foundation giving for the American Kidney Fund.

The idea gained traction when some time-share owners discovered that selling their properties was more difficult than they'd planned. "Trying to sell a time share is pretty tough," says Bill Rogers, founder of the Timeshare Users Group. "There are so many on the market."

"A lot of times it's easier for people to donate it to charity and take the tax write-off than to try and sell it themselves," he says.

The American Kidney Fund started taking time-share donations in April. Another company handles details, sells the properties and processes the paperwork for a commission of 35 percent of the sales price, plus $190. Whatever the actual selling price, the organization gets a minimum donation of $100, says Fontek.

So far, the time share donation program has generated more than $20,000 for the group, which is the leading nonprofit provider of direct financial assistance for kidney patients.

For the kidney fund, the paying the commission is a good investment, because "this is a program we could not do in-house," says Fontek.

So far, the organization has received 173 donated time shares, sold 26 and rejected 47, he says. The least-expensive property sold for $75, while the priciest was just less than $6,000. The average sale price is about $1,400, which generates about $825 for the organization, Fontek says.

The fine print
Donating tangible assets is not without pitfalls. If you're donating a time share and planning to take a deduction, you've got to be scrupulous about determining its value. If it's worth more than $5,000, you'll need a written appraisal to take the tax deduction. Even if the property is worth less than that, you need to be able to substantiate your value claim. That means researching what similar time shares in the same community are commanding.

"That's the hard part," says Rogers. "Some people take the deduction and hope."

Instead, contact the time share association to learn what similar properties in the community are bringing.

If the charity sells the time share before you do your returns, you can also use the sale price, says Norman Solomon, CPA and a recent officeholder in the tax division of the American Institute of Certified Public Accountants. "Fair market value would probably be measured by what they get for it."

But some organizations might not sell the property immediately. And some brokers don't mind selling the properties at bargain-basement prices.