Time-Share Contributions

A time-share generally gives its owner rights to a certain number of days of use each year. Occasionally, the time-share owner wants to dispose of the time-share and benefit a ministry at the same time. While some ministries sell the time-share themselves, more often the ministry pays a resale broker to liquidate the properties.

A time-share donation may seem to be attractive to the giver and the ministry. However, there are certain issues that may raise challenges for these transactions:
  • A ministry may get stuck with unmarketable properties laden with annual costs. Because of taxes and property fees, the longer a time-share goes unsold, the more the costs can pile up for the ministry that owns it. Even when sales are made, the low resale market prices can minimize or erase profits. The fees of time-share resellers can also cut deeply into a ministry’s earnings.
  • Taking title to a piece of real estate, even if it is only a shared vacation spot, may mean taking on all the expenses and potential liabilities associated with it.
  • If a donor claims a charitable deduction of $5,000 or more, an appraisal is required. If the claimed deduction is less than $5,000, no appraisal is required.
  • If a ministry has a time-share it cannot sell for some period of time, the board and others may start asking why the ministry is holding a condo in the Caribbean.

Ministries should carefully evaluate the risk versus the rewards before accepting time-share contributions.

This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.