I guess the first thing is that I would look at why he is crying. Yes, he is upset because he wanted to play with the toy and you made him give it back to his friend. But also, he is confused. At 18 months he doesn't yet understand why he can't have it now and why he has to give it back, so he is crying because he is angry, confused, frustrated at this perplexing situation. I would think that rather than a time-out, which doesn't help him learn any social skills or how to occupy himself while waiting for another turn, you could try redirecting him to another toy or activity that will take his mind off the toy he wanted. Even singing a song or reading a book can distract him enough to make him forget...at least long enough until it is his turn.