Today TaxMama hears from Haley in the TaxQuips Forum, who is working on an Offer in Compromise. “Is there a method for obtaining a fair market value (FMV) for a Time Share property? I would hate to report the full purchase as the FMV on the 433-A, but don’t know any other way to value the property … Insights?”
Naturally, you could go to the trouble of getting a professional appraisal. But that would be as expensive as getting an appraisal on a whole house.
So, here’s what I would do.
1) I would have the client contact the timeshare managers and ask them for a list of sales of customer-owner units similar in size or nature to theirs. Or for listings of units that are for re-sale. (Note: You don’t want listings of sales by the project itself. Those prices would be higher.)
Most likely, this will give you what you need. Look at the most recent sales prices and average them.
2) If they don’t cooperate, look for ads for other units of the same timeshare project on the Web. Print them out.
In either case, attach the printed information from the Web or from the project and explain how you used that information to arrive at your estimate of value.
Remember, any number that goes on the 433 must be backed up by some piece of paper that can substantiate the number. When you make estimates of value – show proof of how you arrived at your estimate, by printing out things of comparable value.
And thanks Haley, I am glad you enjoyed the class. So much to cram into so little time. Join us on Friday. You’ll be able to ask PitBull your questions directly. Jaime Buchwald, president of PitBull is a very high-powered practitioner of OICs.
And remember, you can find answers to all kinds of questions about tax reduction techniques and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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