It depends. If the timeshare was strictly used for personal purposes (not rented, etc) then you don't really have to report the sale since a loss will not be allowed to offset other income.
- To clarify, did you receive a Form 1099-S (sale of real property) or Form 1098 (mortgage interest payments)?
- If there was no Form 1099-S then you do not need to report the sale.
However you do have the option of amending your return so that the IRS sees the result and doesn't ask you to pay tax on the proceeds later on when they reconcile the documents with your return. You must indicate when asked that it was used for personal use.
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