- quote -

This ploy apparently passed a tax court case a while back.
However I strongly suggest you have local ltax counsel
review all the issues in your area and dot every I and cross
every T as to your making a bonafide donation of the
structure at FMV (fully appraised in writing by the book )
of the structure etc.

You may be able to convey the structure but not the land so
as to not trigger two extra pounds of property conveyance
issues--then again it may be necessary to convey the whole
place--too many technical quirks for me to guess. GIVEN that
this move is sure to attract IRS attention it is essential
that you follow every step in the book!

Your donation is essentially the FMV of the structure.
(Hopefully not a negative value) but in an area where a
$120,000 home million home is a teardown it may make sense
to explore the options. Caution, if the plot is worth
$500,000 empty and $400,000 with the home it may be counter
productive to donate the whole thing. And if you donate it
for X and your kid buys it back for Y, prearranged, the IRS
may think its a sham--wouldn't you?

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stigney[at]sbcglobal.net wrote:

- quote -

Are you willing to go through the paperwork with legal fees
to deed just the house over to the fire department? If so,
that might would qualify as a charitable contribution and
therefore partially deductible. An allied question would
be "is the fire department willing to go through the
paperwork also transferring title?"

But just to let them come in and do you a favor by getting
rid of all that wood and materials, SOME might say, would be
income to you, since you saved the money you would have
spent on demolition and cartage.

Happy New Cheer$,
Harlan Lunsford, EA n LA

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I want to build a new house on my exsisting lot which
currently has my primary residence on it. If I raze my
current house by allowing the local fire department to burn
it down or a police department to conduct practice on it,
can I claim a deduction?

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