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Old 05-04-2010, 07:26 AM
 
512 posts, read 1,221,348 times
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hi,
i have a friend who's interested in donating a small house in fairfax county to the fire departement for the day (training) before the domolition.

Has anyone had any experience with this?
what are the benefits?
what are the tax benefits (if any) if you're in the 25% tax bracket lets say?
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Old 05-04-2010, 11:22 AM
 
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I don't know but a friend of mine did that a long time ago and the fire department really appreciated it -- as did her kids who got to watch the fire!
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Old 05-04-2010, 12:49 PM
 
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I lloked into this a year ago when we were demolishing our teardown. The tax rules have been changed and this is no longer deductible as a donation.
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Old 05-05-2010, 08:48 AM
 
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I just got off the phone with the IRS. after asking a hundred questions, they said that yes, you could make that donation....and if the fire department gives you a letter saying that you've donated the property to them, and if you have an appraisal of the donation, you can claim it as a deduction.....up to half of the gross income.....and you can claim the rest next year (can do this for no later than 5 years after donation).

everything i've read online has suggested that you can't do this....

but talking to our accountant/tax man as well as the IRS directly, suggests that we can.

any thoughts?
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Old 05-05-2010, 12:35 PM
 
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Are you giving the property to the Fire dept, transferring the deed to them, or just letting them burn down the house on your property? There's a big difference. BuildinginVA let the fire department burn down a house on his property. He was not donating the house to the fire department. If you are giving the property to the fire department, for them to own forever, it would seem like that would be a legitimate charitable donation and could then be deducted from your taxes. If you are simply letting them burn down a house on your property, I am not sure if that is deductible, although it seems like a good way to get rid of an unwanted house to build a new house. Seems like it would be cheaper for you to do it that way too.
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Old 05-05-2010, 01:06 PM
 
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Quote:
Originally Posted by Denton56 View Post
Are you giving the property to the Fire dept, transferring the deed to them, or just letting them burn down the house on your property? There's a big difference. BuildinginVA let the fire department burn down a house on his property. He was not donating the house to the fire department. If you are giving the property to the fire department, for them to own forever, it would seem like that would be a legitimate charitable donation and could then be deducted from your taxes. If you are simply letting them burn down a house on your property, I am not sure if that is deductible, although it seems like a good way to get rid of an unwanted house to build a new house. Seems like it would be cheaper for you to do it that way too.

Cost is not an issue here. it will not cost any more or any less to demolish and haul away the house, with or without the burn.

we are not giving them the deed. that makes little sense if you think about it...although i understand your logic. if you give them the deed, then where would you build the house since you've given away the land and the house?
The IRS said that as long as the organization (fire department) gives you a letter saying that the house was donated to them, it would count as a donation. they said, "you're not giving the IRS the deed....so we won't know, or won't care if the fire departement asked for the deed or not.....all we care about is that a qualified organization (such as a police departement or a fire department says that you have donated to them)"
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Old 05-05-2010, 01:28 PM
 
3,164 posts, read 6,122,374 times
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You are donating the house, but not the property that it sits on. Got it. Who determines the value of the house? Or if has any value, without the land that it sits on? In other words, how will you know how much to deduct from your taxes?
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Old 05-05-2010, 01:43 PM
 
512 posts, read 1,221,348 times
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Quote:
Originally Posted by Denton56 View Post
You are donating the house, but not the property that it sits on. Got it. Who determines the value of the house? Or if has any value, without the land that it sits on? In other words, how will you know how much to deduct from your taxes?
I was told that you have to get an appraisal 'before' the "donation". appraisal of the house (since that's being donated)....not the land+structure.

I asked if the county tax assessment can be used....she told me to check with the county. I think the safest thing to do would be to get an independent appraisal though.
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Old 05-05-2011, 07:20 AM
 
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Wink very iffy deduction

the tax court case is called Rolfs v. IRS, decided Nov. 4, 2010. it basically holds that the deduction is worthless because the house becomes worthless when you convey it with the restriction that it be burned down by the fire dept. within 60 days. No one would purchase a house without the accompanying land that contains those restrictions/conditions. A good lawyer could probably draw up the conveyance that doesn't contain those restrictions but then you'd have to trust that the Fire Dept. would decide to do the burn right away and waive any residual legal rights that it had. It sounds complicated, at best, and could result in tax penalties. It might be best to just salvage serviceable items from the home, donate to Habitat for Humanity, or some other legitimate charity, and then pay the $12,000 for demolition.
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Old 05-05-2011, 07:31 AM
 
Location: Richmond va
1,541 posts, read 3,992,241 times
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This sounds like a better idea to me


Quote:
Originally Posted by Quality1 View Post
the tax court case is called Rolfs v. IRS, decided Nov. 4, 2010. it basically holds that the deduction is worthless because the house becomes worthless when you convey it with the restriction that it be burned down by the fire dept. within 60 days. No one would purchase a house without the accompanying land that contains those restrictions/conditions. A good lawyer could probably draw up the conveyance that doesn't contain those restrictions but then you'd have to trust that the Fire Dept. would decide to do the burn right away and waive any residual legal rights that it had. It sounds complicated, at best, and could result in tax penalties. It might be best to just salvage serviceable items from the home, donate to Habitat for Humanity, or some other legitimate charity, and then pay the $12,000 for demolition.
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