Does Donate For A Cause Really Care About Helping Charities Or Just Making Profits?

Here's what Dave McClintock, CPA says about donating timeshares and any deductibles allowed:

Donating your Timeshare To Charity A frequent question at TUG is, “Should I donate my timeshare to charity?” That often translates to, “I can’t sell my timeshare and have been told the tax benefit may exceed the sales price on the open market.” The answer is "Yes!", if you have a charitable motive and "No!", as it relates to that expected tax benefit.

If donating a deeded timeshare, the deductible contribution amount will normally be equal to the Fair Market Value (FMV) on the date of donation. That’s the price that an arms-length buyer and seller in the timeshare resale market would agree upon, not what the developer is charging for that same week. If the FMV exceeds $5,000, you’ll need a written appraisal that meets IRS guidelines. If the sale of the property would have resulted in a short-term gain, the FMV must be reduced by this amount.

Right to Use (RTU) timeshares and non-deeded points timeshares are tangible personal property to which additional rules apply. If the charity’s use of the property is unrelated to its primary function (for example, if sold at an auction), the FMV must be reduced by the amount of any gain that would have resulted had the property been sold by the taxpayer.

So, why can’t the tax benefit justify a donation? It’s relatively simple. FMV is normally the same as what you would sell your timeshare for. Since the highest federal tax bracket is 35%, you’re better off selling and pocketing the cash. For example, if you sell your timeshare for $1,000 (the FMV), you’ll have $1,000 in your pocket. If you donate the timeshare, your deduction should be $1,000 and your federal income tax savings would put, at most, $350 (35% x $1,000) in your pocket.

Keep in mind that appraisals aren’t cheap (most cost $500 or more) and the cost of the appraisal isn’t considered a charitable contribution.

Another frequent question is, "Can I get a tax deduction if I donate the use of my week to a charity?" The answer is “No”. IRS regulations won’t allow a charitable deduction for the gift of a right to use property. Donate the use of a week because you are charitable, but you can't deduct any value associated with the use of the week.

To jayjay: They said 10-12 weeks, so I absolutely will keep you posted.

How many weeks have passed since you started?

Any update on this?

Update to my "Donate to a Cause" action:

I submitted my paperwork within a day of recieving it; the paperwork was forwarded to the closing company and the account opened on Nov 4th. I recieved a phone call and email from a woman named Brittany, who provided me a tracking number to check the status of my action. The company is: Resort Closings, Inc. 3701 Trakker Trail Suite 2J Bozemann, MT 59718. That was on Nov 7th. The most recent activity on my account (they enable you to check your account activity on-line) was Nov 30th when they emailed a request to DRI.

All of this is in line with the information I was given during my original phone call. Note that no one has asked for any money yet. I continue to wait.

Carol - I am very interested in how this goes for you. Please keep us updated.

We contacted Donate For a Cause about donating our time share. We were told it will cost us $2495(for title search,etc) plus $150 for title transfer. The document they sent for us to sign the deed over states that we will pay... "SUBJECT TO taxes and special assessments for the current year and subsequent years and easements, covenants, conditions, and restrictions of record;" It sounds to me like we'll have to continue to pay the taxes and assessments forever..even if we sign it over? I'm scared to sign!

annc280 wrote:

We contacted Donate For a Cause about donating our time share. We were told it will cost us $2495(for title search,etc) plus $150 for title transfer. The document they sent for us to sign the deed over states that we will pay... "SUBJECT TO taxes and special assessments for the current year and subsequent years and easements, covenants, conditions, and restrictions of record;" It sounds to me like we'll have to continue to pay the taxes and assessments forever..even if we sign it over? I'm scared to sign!

I would avoid such an arrangement. I thought that DFAC would assume full ownership and the accompanying fees, etc. DFAC used to do that. I thought that the $2495 was for them to cover maintenance fees and possible special assessments until they could turn around and sell it.

A cheaper alternative would be to list your timeshare here in RedWeek's Bargain Basement and offer to pay the closing costs.

Also, on Timeshare Users Group (aka TUG; tugbbs.com), there's a Bargain Deals section where, for free, you can advertise that you simply want to give your timeshare away. Just follow the instructions at the top of that page.

Another update on my "Donate To A Cause" action:

Earlier this week I got my paper work from Resort Closings, Inc as part of the next step in my action. The package contained an invoice for $3095 broken out as follows: $2495.00 Donation Program Fee, and $600.00 Resort Transfer Fee. The package also contained a contract entitled "Diamond Resorts U.S. Collection Transfer of Membership." This contract states that I am transfering my points in the Diamond Resorts U.S Collection (which is probably the official name of DRI) to Project Philanthropy, Inc. It states that the transfer of the membership will be effective when accepted by DRI and when all other conditions of transfer have been satisfied.

The transfer of membership has several conditions that involves notification of all parties, adding Project Philanthropy to the register of members, transfering certificates, stuff like that. It also says that once the transfer of membership is complete, the transferee (Project Philanthropy) automatically becomes a memeber and will be subject to and comply fully with DRIs articles, bylaws, etc. It goes on to say that the transferee agrees to "pay the annual standard assessment payable in respect of the points standard assessment and the base standard assessment applicable to the transferee's membership....." It also says that the "transferee and the transferor (me), as between themselves, agree that the transferor will be responsible for any claims or liabilities arising from the transferor's membership in respect of the period prior to the date hereof, including any standard assessment payable during such period, and the transferees will be resposible for any claims or liabilities arising from the transferees membership in respect of the period after the date hereof....." That would be today, since I will be signing, notarizing, and mailing this document today. I got my 2012 annual assessment in the mail eariler in the month and of course it went up several hundred dollars, so I will be paying that as well in a couple of weeks.

Not too much fun to cough up $6K at christmas time, but I will feel a lot better when I am rid of this thing. I am scanning all my documentation, so if anyone wants to see the actual documents, I can send you a pdf file (I think - the whole scanning thing on my printer is tenuous at best). I'm comfortable that once these papers go back and I pay my annual assessment, I will have no more obligation to DRI for anything ever again.

BTW, pardon any misspellings or punctuation. I try, but fat fingers get in the way.

Follow-on to my last posting: I wanted to note that the post submitted by annc280 does not align with the paperwork I got. Nothing in the paperwork that was presented to me contains the particular phrase she quoted. Perhaps her ownership configuration is different from mine.

Carol - thanks for the update.

I've lost track. Do you intend to try to claim this as a charitable donation on your 2011 taxes? If so, that is what I'd really like to follow!

I also thought I'd mention..when we got the paperwork from Resort Closings..my husband's name was spelled wrong, our address was spelled wrong, and the county the resort was in was spelled wrong. When I pointed these out the gal handling our case said not to worry about them..she'd change them once we sent it back. Since this was official paperwork which had to be notorized, I insisted she fix the typos before signing. Sloppy work!

craige13 wrote:

Carol - thanks for the update.

I've lost track. Do you intend to try to claim this as a charitable donation on your 2011 taxes? If so, that is what I'd really like to follow!

I will claim this as a charitable deduction to the maximum extent possible - as far as my accountant will let me. I will be sure to take notes about this deduction and pass it on.

annc280 wrote:

I also thought I'd mention..when we got the paperwork from Resort Closings..my husband's name was spelled wrong, our address was spelled wrong, and the county the resort was in was spelled wrong. When I pointed these out the gal handling our case said not to worry about them..she'd change them once we sent it back. Since this was official paperwork which had to be notorized, I insisted she fix the typos before signing. Sloppy work!

Ann - it seems that the quality of the paperwork is dependent about the agent. I will note that the agent that sent me my paperwork did not ask me first about any of that information, but did manage to get everything right except that she left my middle initial out of my name, so I had to sign the papers without my middle initial. I didn't think it was too big a deal, so I didn't worry about it. I'm sorry it wasn't as easy for you -- you were right to make them get it correct.

Please consult an attorney before you sign any paperwork or pay any money. This sounds a lot like the Nigerian Lottery. They spell everything wrong. I got rid of two timeshares this year without getting ripped off by one of these scammers. This is an awful lot of money to be risking on the chance that this company is legit. I doubt very much you will be allowed to write anything off your taxes. The scammers depend on the so called write off to seal the deal. Please be very careful before you sign on the dotted line.

WE RECENTLY DONATED A TIMESHARE TO FLORIDA VETERANS ASSISTANCE PROGRAM. I AM WAITING FOR THE OFFICIAL TRANSFER PAPERS FROM THE COMPANY HANDLING THE TRANSFER. THE RESORT (STEELE HILL DID THEIR PART) SENT ME A CONFIRMATION OF TRANSFER COMPLETION WHICH STATES THE TRANSFER WAS COMPLETED ON DECEMBER 5TH, 2011AND STATES THE NEW OWNERS NAME. EVEN THOUGH I'M STILL WAITING FOR TAX PAPER WORK, I FEEL BETTER KNOWING EVERYTHING IS OFFICIALLY OUT OF OUR NAME AND WE WILL NO LONGER BE FINANCIALLY RESPONSIBLE. THEY DID TAKE A LONG TIME THOUGH, WE BEGAN THIS PROCESS IN AUGUST ALSO WE HAD TO PAY THE 2012 MAINTENANCE FEE OF $516. THAT BOTHERED ME SINCE WE WILL NOT BE OWNERS IN 2012. BUT IT WAS UNFORTUNATE FOR US THAT WE GOT SUCKED INTO THIS THING IN THE FIRST PLACE AND JUST WANTED (IN ALL HONESTY) TO GET RID OF IT. AN EXPENSIVE MISTAKE....GLAD TO BE OUT OF IT AND WILL TAKE WHATEVER TAX BREAK WE CAN GET. THIS CAUSED US SO MUCH GRIEF, WE JUST WANTED OUT.

Just a heads up about Donate For a Cause.

BBB's Charity Reports states that Donate for a Cause does not meet 6 out of 20 standards for Charity Accountability. Not a good sign.

You can see the report here: http://www.bbb.org/charity-reviews/spokane/other/project-philanthropy-dba-donate-for-a-cause-in-bozeman-mt-20893#bbbComments

HI Carol, Just watned to check with you if you had any update on you donation with DFC. I just talked to one of the customer service at DFC today trying to donate my timeshare and they asked me for $2495 closing cost and $160 transfer fee - which does seem in line to what you were told if I ready the complete thread correctly. But obviously I am skeptical of the fees and actually DFC abiltiy to complete the donation considering all the scams going around.

shraddhap wrote:

HI Carol, Just watned to check with you if you had any update on you donation with DFC. I just talked to one of the customer service at DFC today trying to donate my timeshare and they asked me for $2495 closing cost and $160 transfer fee - which does seem in line to what you were told if I ready the complete thread correctly. But obviously I am skeptical of the fees and actually DFC abiltiy to complete the donation considering all the scams going around.

Many of these socalled charities take your timeshare and your $2500+ fee upfront and if they can't sell it it remains in your name ... beware.

Hell to all, My name is Chase, I have a company that consults for HOA boards and Property Management Companies. I understand what everybody is dealing with I see it all to often. The difficulty involved in disposing of a timeshare can be quite frustrating. I will say there are a few companies that do what they say they will however, most do not. I have access to quite a few Resort data bases and I can tell who has paid the fees, who has transferred the ownership and who hasn't. We actually provide some of the same services many of you are looking for along with a multitude of other services. Usually we do this on a much larger bases (the whole association at once) however, if you are looking for somebody to speak with I would be happy to help. I am not saying we don't charge a fee to dispose of a timeshare because we have to. If we didn’t we would be bankrupt in a very short amount of time. Some resorts we cannot except do to the transfer requirements of the particular resort. With this being said, I am not saying we have to do the work for you or you even should use us at all. I am in the business of helping HOA’s and PMC’s however; if I can help some individuals as well we will do so. If you would like proof we are not like every other company, my office is located at a resort and you are more than welcome to speak with them should you contact us. I highly doubt any resort would be willing to let a company be on property if we were a scam. Again, I am willing to offer advice on any issues you may have and if we can help I will. Best of luck to everyone.