In "Scharf v. Commissioner", the US Tax Court established that donating property for use in firefighting training exercises provides a valuable service to the community. If the receiving fire department is not for-profit, the donation can be considered a tax-deductible donation (the fire department will destroy the home via a controlled fire).
How can a taxpayer determine the Fair Market Value of the donated structure? Is a home appraisal (which itemizes the value of land and "improvements" separately) sufficient for determining the Fair Market Value of the structure to be donated?
- The remaining structure will be demolished at home owner's expense following the fire department's training.
- Item 8 of this Forbes article does a nice job of summarizing the life and times of the home-burning deduction.