Discussion:Houses donated to fire dept for practice
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Houses donated to fire dept for practice
| 30 December 2005 | |
| I have a client who let the local fire department use two properties for training. He obtained appraisals from a local real estate company and a thank you letter from the fire department. Is this deductible as a charitable contribution? If so, what else is needed? Looks to me like it is, and would need to complete Form 8232 (I think that's the right number...). Anything else? Thanks. | |
| 30 December 2005 | |
| Probable yes:
Elegibles: Federal, state and local government .IRS Pub 78 need to be cheked--Orlando | |
| 31 December 2005 | |
| If the fire department is either a governmental entity or a 501(c)(3) organization, the Tax Court has approved such a deduction. | |
| 31 December 2005 | |
| Thanks for the feedback. This is my first time here, and I appreciate it. | |
| 1 January 2006 | |
| Presumably, the fire department burned both properties to the ground. In many cases, burning the property to the ground would actually increase the value of the property as a whole; however, the deduction is still allowed. | |
| 2 January 2006 | |
| The deduction of appreciated property is the FMV at the time of the donation. If client donated only the structures (and not the land for continued use by the fire department), then the appraisal would have to state the FMV of the structures separately from the FMV of the land to be a valid appraisal for deductibility purposes. (Unless, of course, the appraisals you mention were for the structures only.)
If the appraisal was not reported that way, then I would get the same appraiser and see if s/he could revise the report to show the constitution of the FMV between land and structures at the time of the original appraisal. That is, the appraiser should not take into account any factors that have occurred since the time of the original appraisal. Further, the current year deduction is limited to 30% of the taxpayer's AGI. | |
| 15 August 2006 | |
| What happens when the fire department doesn't burn the structure to the ground? In my case, the fire department decided the weather wasn't conducive for burning so they did other destructive training instead? Lots of framing, sheetrock, kitchen, bathroom, flooring, ceiling, roof, plumbing, and wiring damage, but the structure is still standing. Someone might be willing to pay to salvage a few of the remaining unbroken pieces (windows, light fixtures, door, etc). A builder might even be able to resurrect the structure at great cost. At what point could I claim the structure as a total loss? What sort of documentation would the IRS want for me to back up that claim. I got an appraisal before donating the structure. Do I need pay for a second appraisal now that the fire department is finished with the structure? | |
| 15 August 2006 | |
| There are other discussions pertaining to this issue. Speaking as a fire commissioner, this is a service our department charges for, not a donation. | |
Green hunter (talk|edits) said: | 15 August 2006 |
| P -
I am confused - your client allowed the fire department to use his property, was teh property completely destroyed? Also what was the taxpayers basis in this property, is there any? I imagine that the structure was of limited worth why would you other wise allow someone to destroy the property. Personally, I would need more background because my conclusion is that the taxpayer (assuming the FD qualifies) does not have any basis for a CC. | |
| 15 August 2006 | |
| One consideration is disposal cost. In New York, for example, construction debris is classified as hazardous waste and tipping fees can be huge. Burning reduces volume considerably. In this case Rickiep should give the firmen another shot at it. | |
| 16 August 2006 | |
| Green Hunter - 800 sq ft house on 8000 sq ft house on 7th ave up the street from my office in Kirkland, WA. A few houses up the street is a home built about 3 years ago that sold for $1,500,000. Maybe the 800 sq ft house is worth $20k and the lot it sits on is worth $600k. It could well be that the house will be torn down to construct a new house, but if it has value, it can be contributed. Charitable contribution of appreciated capital gain property may give the deduction, even if the basis is less than the current FMV. | |
| 12 October 2008 | |
| Question-- we sold our house to a developer -- we allowed the fire department to use the house for training purposes before we transferred ownership (as approved by the buyer). The fire department did not burn - but, knocked down walls, windows, doors etc.. We live in Oregon and I am confident from the case law that this is a valid charitable contribution. However, how do we determine the value if the house was not burnt down? We are trying to do anything to reduce the amount of capital gains on our sale -- house bought at 475K -- sold 1.85 million. Any advice is welcome. | |
| 12 October 2008 | |
| Guettlers:
1) this site is for Tax Professionals, not Do It Yourselfers. As such you should seek the advice on the Turbo Tax website. 2) You already seem to have made up your mind, so our telling you that you are wrong won't be taken well. 3) If you have made this much money on a transaction, why are you so cheap that you want free advice from a website discussion board instead of customized advice from someone who knows your complete situation? | |
| October 12, 2008 | |
| LOTS of discussion in this thread
http://www.taxalmanac.org/index.php/Discussion:Donation_of_House_to_Fire_Department | |
RoyDaleOne (talk|edits) said: | 12 October 2008 |
| "We live in Oregon and I am confident from the case law that this is a valid charitable contribution. However, how do we determine the value if the house was not burnt down?"
Based on the foregoing statement of understanding the case law, extracting the methodology to determine the deduction should be no problem. Also, I would not presume to know enough to help. | |
| 13 October 2008 | |
| Since I almost wound up donating my house again to the fire department for training purposes this morning and I doubt seriously that I couldn't get a charitable contribution for it, you won't either Guettlers. So, Kevinh5 is correct.
If you look at the link Belle provided, it has everything you need to know. Also, Riley2 has all the answers as well. Now, if this information is not enough for you and you would like the link to the Turbo Tax website, go to the page where you ask a question and you will find a link to the Turbo Tax website when you click, "I am not a professional" or whatever it says. It's right there. Tom | |
| 13 October 2008 | |
| Tom is quite the Iron Chef in the kitchen.
| |
| 13 October 2008 | |
| Seems we were making some bacon in the oven via the Alton Brown method ("Good Eats" on the Food Network. Excellent show by the way.) When I took the pan from the oven (to save the bacon grease I call this liquid gold. It's great for making french fries), my hand started to get a slight burn as the kitchen towel was a little too thin. I dripped some bacon grease on the oven burner and it started a small fire which eventually grew a little bigger. Of course, I shut the oven door and the fire died for lack of oxygen after about three minutes, but boy did the smoke pour out like you wouldn't believe.
Set off the smoke detector, of course. No fire department this time as I canceled the alarm. Vented the house, had to go to church later, as I was overcome by smoke inhalation. You just can't make this stuff up folks. Tom | |
| 13 October 2008 | |
| "...had to go to church later, as I was overcome by smoke inhalation."
a reference to fire and brimstone, perhaps? | |
| 13 October 2008 | |
| Pretty much, Kevin.
The good Lord was sending me a message. Tom | |
| October 13, 2008 | |
| I remember the old tub of lard that was saved for cooking other stuff. Tom, using bacon grease for frying other food is not healthy. (Just looking out for your best interests.) | |
| 30 July 2009 | |
| This is an old thread but here is a new story on the subject. Short version: You can't take a deduction. | |
