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Golf equity membership - capital loss?

Cerritos, CA |

Many years ago, I purchased an equity membership in a golf club. Along the way I also paid an assessment to finance the construction of a new clubhouse. Now, I would like to leave the club, but the sales list is far too long. Just “walking away” is not an option. However, for a relatively nominal fee, the club will allow me to convert my current equity membership into a non-equity membership. This would allow me to just “walk away” after one year if I choose with no penalties. Of course, I forfeit my “equity” in the club. Seems to me, I am effectively selling my equity membership back to the club for $0 and purchasing a non-equity membership for $x. Can my original purchase amount and/or assessment (for new clubhouse) be considered a capital or personal loss for tax purposes?

Attorney Answers 1

Posted

This of course is better answered by your accountant. You should though have your agreement looked at by an atty to see what if anything can be done to minimize your losses here.

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