Timeshares and Schedule C

[DMICPA]

I have a sole prop. who purchased 3 timeshare interests in 08.

He claims that they are used for His clients and wants to deduct the expenses on schedule C. Couple of questions:

1. I don't think a Timeshare is depreciable. Is this correct?

2. I would imagine strict useage records would have to be maintained.

3. In many timeshares, the owner also receives rental income. This would indicate Schedule E and not C.

Can anyone help me with your insightful, timely comments?

[oceanlovin'ea]

not necessarily rent

If you purchase a week at a time share to use for your vacation, you would only have income if you didn't use it yourself but "rented" out your week.

What kind of business does he have that he would put his clients in a timeshare for a week? I would like to be one of his clients.

No depreciaton on timeshare.

Linda

[DMICPA]

Timeshare for the CPAs

He is in the financial planning business. He has never invited me and I am a client of His. Hmmmmm.

If He only gets one week per year, He is stretching it to take a tax deduction.

I could see the IRS raising their eyebrows on this deduction.

[David1980]

So how does he want to treat the timeshares then. As gifts to clients? There are pretty small limits on allowable gift deductions, see Publication 463 chapter 3.

[dsi]

will he be sending his clients a 1099 for this use?

[AJsTax]

Similar situation

Seems to me that this would be the same as the case of the pleasure yacht used to entertain clients. In that case it was held that none of the costs of the yacht itself is deductible, but other costs to entertain the clients might be if they meet the requirements for entertainment.