Q: If I receive a 1099-A representing a loss of $13k for ditching a timeshare can I claim this as a loss? Will it help me?
I was sold a timeshare with false accusations. I have the ability to hire an atty to get the time share nullified and they are saying I will receive a 1099-A to declare the loss. Will this actually provide me any cash savings during the tax process? I have no cap. gains or stock - just basic savings, 401k, mortgage for primary residence, etc.
A: I'd be wary of any attorney that tells you this. I've practiced law in Florida for many years and when I've helped clients get out of a timeshare, they will often receive a 1099 when the timeshare cancels the loan/mortgage. However, if the loan that was cancelled was $13k, the form will also report that the value of the timeshare surrendered back to the timeshare company was worth $13k, meaning that the transaction is tax neutral. There are a lot of timeshare scams out there that spread misinformation, so I'd be very careful. I did write an article for the Idaho state bar that may help you. It's posted at: https://skidmorehales.com/article
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