Can I Deduct Taxes on a Time Share Mortgage?

Property Taxes

• You can deduct property taxes on a time share, just as you would any other residential property. If you and the other owners divide up the property taxes -- each week of time you own means you pay one week's worth of taxes -- you can only claim the share you actually pay. Even if you don't itemize your deductions, you can claim a deduction for property tax on your 1040.
  
  

Sales Taxes

• If you paid a state real-estate sales tax when you bought your time share, you can also write that off on your federal income taxes. Unlike property tax, sales tax deductions are only available if you itemize deductions rather than taking the standard deduction. If you claim state income taxes as an itemized deduction, you can't claim sales tax as well. The federal government originally set this deduction to expire in 2009, but extended it through 2011 instead.
  
  

Non-Deductible

• Property tax is only deductible if it's assessed equally on all property in your taxing district. If it's a special tax created to pay for benefits accruing to your time share, such as street lights or sidewalks on your road, you can't write it off. Fees for trash pick-up and other services don't qualify as a deduction, even if they're mandatory. If you pay transfer taxes such as documentary (doc) stamps, you can't write them off on income tax either.
  
  

Rentals

• If you rent out your time share for all or part of your ownership period, the tax treatment changes. If you rent out 50 percent of your ownership, for instance, you can claim half the property tax as a personal deduction and take half off your rental income. The IRS has a formula for determining whether a time share property is primarily a personal vacation home or primarily a rental. If it's primarily a home, you can only deduct rental expenses, including the rental share of taxes, off your rental income, not off your regular income.