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How a Timeshare Can Be a Tax Deduction

Audio version available here (1 min. 50 sec.)


As a business owner, you may be too busy with your business’s day-to-day operations to take vacations on a regular basis. If you own a timeshare property, you may feel that it is going to waste. However, you can still get your money’s worth from your timeshare with one strategy: let your employees use it!


The idea might sound odd, but allowing your employees use of your timeshare can actually bring about significant tax savings. How? There are two methods.


The first is to offer your timeshare as an entertainment facility that is a tax-free fringe benefit of being an employee at your company. Essentially, you establish a first-come, first-serve system for your employees to use the timeshare when it is available to you. If you do not plan on using the timeshare for yourself, you won’t have a problem justifying the timeshare as primarily benefiting “employees generally”. If you do plan to use the timeshare, just make sure it is for less time than your regular employees. Same goes for any employees that are already “highly compensated (earning more than $155,000 in 2024)”. Proportionally, your regular employees must use the timeshare more than you (the property owner) and your highly compensated employees.


The other method is to offer use of the timeshare as your employees’ compensation. This works by simply adding the fair market value of use of the timeshare and any expenses incurred there on the employee’s W-2.


How do I deduct expenses and use of the timeshare? If you are not a corporation, you should write the deduction on your Schedule C. If your business is a corporation, you’ll need to submit an expense report to be reimbursed, and the corporation will get the deduction.


Understanding how to use this deduction takes a bit of studying, but once you are able to implement it, you could save a great deal on your tax return. To ensure you do it correctly, it’s important to have a tax professional to guide you. XQ CPA has multiple experts ready to assist you with planning this deduction, so reach out today to book a consultation.


Phone: 832-295-3353


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Want to pay less taxes? Read XQ CPA's official tax planning guidebook! How to Grow Your Wealth Through Tax Planning.

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