I found an article written by a CPA (
https://www.redweek.com/resources/articles/tax-aspects-selling-timeshare) with the following example:
Example:Assume that you purchased a week for $7,000, your purchase closing costs were $500, you sold the week for $8,500, and various selling expenses were $1,300. In addition, a review of the annual budget information you received from the resort indicates that the HOA apportioned $650 of your total maintenance fees to capital reserves during the four years you owned the week.
The cost would be $8,150 ($7,000 + $500 + $650). The net loss on sale would be $950 ($8,500 - $8,150 - $1,300). As explained above, generally, that loss would not be deductible.
Based upon this, the total capital reserves taken out during all the years of ownership adjust the cost to reduce any capital gains profit.