Client rented his time share for the first time in 2018. Client then sells timeshare, can he take the loss on the sale?

[nmr12354]

Client owned timeshare since 2002. In 2018 he rents it for the first time, then decides to sell it. Can he take the loss?

[TaxMonkey · Accepted solution]

Loss basis in a rental is the lower of adjusted basis or FMV on the day converted to rental. Given that there was as short time between conversion and sale it seems unlikely there is deductible loss.