This is an extremely common question in this day and age with the tumbling economy and more and more people finding it extremely difficult to sell their timeshares even at bargain basement prices. The short answer to this question is "yes but...".
While it is certainly POSSIBLE to donate your timeshare to charity and get a tax deduction, what most people dont realize is that the charity has to be able to sell your timeshare for a profit in order for the charity to actually receive anything of value as its rare that the charity will actually USE the timeshare themselves. The profit is in reselling the timeshare and thus you can claim a small deduction if this happens.
The problem is that if you have been unsuccessful in selling your timeshare, a charity isnt likely to be very successful either, and may flat out turn out down on the spot if they dont feel they can sell your timeshare for at least a reasonable amount of money.
Also its important to note that fees may apply to these donations as even charities cannot transfer timeshare ownerships and complete other closing documents for free.
TPlease be wary of organizations that claim hyperinflated "values" of your timeshare as amounts you can claim on your taxes! Your timeshare donation is always FAIR MARKET VALUE, and nothing more. If you are unable to sell your timeshare for a single dollar, regardless of what someone tells you your timeshare is worth, the fair market value of your timeshare is essentially nothing! Claiming these outrageous values on your taxes will result in a very bad experience for you should you ever get audited. Also note that every organization I have ever heard of that offers these extremely valuable "appraisals" have charged a fee for said item. Of course it is in their best interests to tell you the highest amount they think you will believe, if they told you the truth, there would be no way you would pay them for said service.
When a charity actually sells your timeshare, they must file form 8282 with the IRS and submit a copy to you as well showing the actual sale price of the timeshare (remember, charities do not "take" timeshares, they merely sell them on your behalf). It is here where a huge "appraised" value that is significantly different than the actual sale price can certainly put a huge red flag on your return!
Donation is only an option if you truly are trying to be charitable and have a week with some value that you wish to help a charity out by giving them the ability to sell it for you and keep the proceeds of the sale. Donation of your property because you have been unable to sell it yourself is always a poor idea, and in all cases will simply end up costing you more money out of your pocket.
Furthermore TUG has two existing documents to provide more details on both the tax deductions applicable to you, and the actual options for donating your timeshare to charity. These articles are located here:
and this guide for owners who are just looking to get rid of an unwanted Timeshare:
Note: for additional questions you can get help and advice from owners 24 hours a day on the free:
TUG Timeshare Owner Discussion forums