My clients purchased a time-share, meaning it was deeded real estate (condo) for 1 week per year, in the Boston area in 1997. The bankruptcy of the property was completed in 2018 and a Grantor Letter issued showing a nonpassive loss from the business, long-term capital gains, and a net operating loss. I'm struggling on how to report this on their personal return. My thoughts are to list it as an investment property and show a capital loss. Any guidance on this would be appreciated. Thank you for your time.
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Was a tax form issued? One would expect a 1099A...
Chris -
No tax form issued. A Grantor Letter was sent to client from the Trustee of the Condominium Trust (an accounting firm in the area).Comment
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So did the client get foreclosed on a time share they bought? Why would there be a nonpassive loss from the business if it was just a time-share purchase? No business involved??
ChrisComment
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I'd have a hard time justifying a tax loss on a time share.Comment
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Personal use? Then, non-deductible loss.Comment
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To clarify the client owned their condo for the 1 week per year (NO mortgage - it was paid in full) and used it.
The owner of the entire condominium property went bankrupt. The entire property was then sold to pay back taxes, the mortgage, and outstanding debts. My clients did not sell or lose their condo through their actions, but because of the bankruptcy of the entire property. They received a small amount for their ownership in the property but nowhere near the investment made to purchase the property.Comment
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