Discussion Archives:Construction Costs as Charitable Contribution

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Discussion Forum Index --> Advanced Tax Questions --> Construction Costs as Charitable Contribution


Discussion Forum Index --> Tax Questions --> Construction Costs as Charitable Contribution

Nittiaj (talk|edits) said:

11 November 2007
LLC donates raw land to a township. LLC than pays contracts 500K to construct a facility on the land, now owned by a charitale organization. Any contribution deduction for the 500k?

Smokeytax (talk|edits) said:

12 November 2007
I think yes (subject to the limits if the LLC is being taxed as a C corporation).

You will definitely want a letter of acknowledgment from the organization and/or township.

Dennis (talk|edits) said:

12 November 2007
The wording of the OP is awkward. If the LLC has donated the land under an agreement specifying the right to build and the annual rent cost the building itself would be a leasehold improvement and I would question deductibility of the raw land.

WesR (talk|edits) said:

12 November 2007
Hi if the LLC donated the land (FMV deductible if long term) and then built the bdlg($500k cash deductible)I dont see why you would not get a charitable deduction for everything to the extent of your AGI limitations. Also you will have to get the land a qualified appraisal. bye

Dennis (talk|edits) said:

12 November 2007
Client donates land, subject to use restriction at little or no cost, builds and occupies his complex and Wesley wants to deduct the whole pie in year one. Oink.Image:Oink.jpg

Nittiaj (talk|edits) said:

12 November 2007
Sorry if I was unclear. TPer is donating the land to the township, the township is leasing the land to a tax-exempt org that assists disabled children, and then the TPER has agreed to build a facility on the land for the tax-exempt org to house disabled children.

Dennis (talk|edits) said:

12 November 2007
In which case Wesley's advice is appropriate.

WesR (talk|edits) said:

12 November 2007
Hi Dennis makes up his own facts and assumes all others oink. I made up mine "if" to get the deduction. :) NITTIAJ see what happens when you are unclear? Yet I dont see any "subject to use restrictions". Seems to me he gets to deduct the land to the town and the cost to build to the TE org. OINK again dennis. bye

WesR (talk|edits) said:

12 November 2007
Hi Dennis we were writing at the same time so accept your thoughts post comments. love the decals. bye image:oink.jpg
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