| Down
to your last resort? Donate your time share | | |
| Most charities
are not interested in owning the property, instead they want the proceeds from
the sale, says James Tarpey, president and attorney for Donate for a Cause, a
company that brokers time shares for charities. Since the charity or broker will
"want to sell it fast, it'll be a distress sale," he says. "They
won't sit around waiting for the average price, they'll just sell it."
That means if you're depending
on the sale price to set the value, you could be in for a big disappointment.
Best bet: Talk to your accountant or tax attorney to find out how
to determine and substantiate the value.
If you make the donation,
the Federal Trade Commission advises that you get a receipt detailing
the amount of your donation and stating that it is tax-deductible.
Be wary if anyone tells you
to just make up a number. In the past few years, a lot of people
decided that donating their old cars to charity was a great way
to take a deduction for the full blue-book value, for clunkers in
such bad shape they could never have gotten that price on the resale
market. The Internal Revenue Service noticed and narrowed
the rules for donating cars to charities.
"The
government is very much concerned about valuation," says Solomon. "That's
the hottest thing going right now." For
$150 to $200, you can get an appraisal, says Chase Magnuson, president of Real
Estate for Charities. "Because of what goes on with autos, it's not appropriate
for the donor to do anything other than be prudent," he says.
His advice: Ask the community
manager to recommend several appraisers for financial or estate
purposes. (Those people should already have comparables handy, he
says.) Or have your bank call a bank near the community for the
names of several time share appraisers that it uses.
Remember, a $5,000 deduction
isn't the same as pocketing $5,000 by selling the property. If you're
in the 40-percent tax bracket, a $5,000 deduction actually nets
you a $2,000 break on your taxes. To claim it, you have to itemize.
Even with experienced charities
and brokers and the best oversight, mistakes happen. The kidney
fund has a program that allows access directly into the broker's
computer system to track donations and sales. Despite that, several
donations didn't make it into their account right away, Fontek says.
But in both cases, quick phone calls cleared up the matter.
Always start by contacting
the charity, rather than the firm that handles the sales for them,
says Fontek. Go through any questions you have with them. And once
you make the donation, contact the charity again to make sure they
have your donation in their records.
"If we
know you've donated, it helps us" track it through the system, says Fontek. You
also need to document in writing when your obligation to pay maintenence fees
will end.
For charities that go through
Donate for a Cause, time-share owners will either continue paying
fees until the property has been accepted for donation or until
the sale, depending on the property, says Tarpey.
After the sale, contact the
homeowner's association yourself to make sure the deed has been
properly transferred and you are no longer responsible for any fees,
says Howard Nusbaum, president and CEO of the American Resort Development
Association, a trade group for the time-share industry. Owners "want
proof that their responsibility is over," he says.
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