FAQ: Gifts of Timeshare Ownership
We truly appreciate every prospective donor’s desire to make a gift to Duke University, and hate to turn down any generous offer of support. However, through years of experience, we have learned that while charitable gifts of appreciated real estate often work well for both the donor and the receiving organization, gifts of timeshare units raise costly challenges. As a result, Duke has a policy of not accepting gifts of timeshare ownership.
The main reason timeshares are not good candidates for charitable contributions: they tend to be worth less than the donor paid for the unit, and come with carrying costs (annual fees, assessments, maid service, and other expenses) that charitable organizations like Duke aren’t equipped to handle. Moreover, the cost of an appraisal (several hundred dollars) that may be needed to document the donor’s charitable deduction will typically exceed any tax benefit from the donation.
Here are some common questions that arise during our conversations with donors interested in gifting a timeshare unit:
Q: What do I actually own with a timeshare?
A: Ownership in a timeshare may take several forms, including (1) a deeded interest in a small percentage of the underlying real estate; (2) a “right to use” interest; or (3) a non-deeded points interest. The latter two are tangible personal property rather than real property interests.
Q: Can I just give Duke University a timeshare unit as an outright gift?
A: Unfortunately, no. Duke is simply not equipped to manage, rent, or sell timeshare units, and unfortunately (again) the re-sale value for many of these is close to $0.
We often advise donors to try to sell the timeshare unit (or see if they can forfeit it back to the company that sold it to them if this is possible without other liability). Some larger timeshare companies may offer a “buyback program” (check on this when purchasing a timeshare). A few national real estate firms offer timeshare sales assistance, but beware of any service that requires you to pay an upfront fee. (Scams are also out there.) If the donor has been using the timeshare for personal use, then a loss on its sale is generally not deductible. In some cases where a timeshare has been used exclusively as rental property, the donor might be able to write off a loss on the sale. (Please consult your CPA and personal advisors.) A tax-exempt charity like Duke cannot write off a loss, so we could potentially end up worse off than a donor if we accepted such a gift.
Q: Is it possible for my timeshare to appreciate in value?
A: It is possible, but unfortunately it is not common. If your timeshare has appreciated in value and you no longer have use for it—sell it and count your blessings. You can make a charitable contribution with the cash proceeds if you wish to do so.
Here are some helpful articles about owning a timeshare:
What to Do With a Timeshare You No Longer Want – Daily Finance
The Timeshare Trap – CNN Money
How to Protect Yourself: Timeshare Sales & Resales – Florida Attorney General’s Office
We certainly appreciate your interest in donating your timeshare to Duke University, and we’re sorry to be the bearer of less-than-pleasant tidings. The good news is, there are many other ways to make a meaningful impact at Duke. Please contact us to explore some creative giving strategies that may work for you.