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Name:	LakeStone83 -	Reply
Subject:	Tax Question??
Date:	12/22/2008 2:44:15 PM

I recently donated a house to the Alexander City fire department for training. They burned the houses and have them recorded. How would I go about getting a tax receipt for this? They said we could type one up and they would sign it. That's all well and good but what do I include? They really didn't have a good answer.

Name:	lakeplumber -	Reply
Subject:	Tax Question??
Date:	12/22/2008 3:28:50 PM

I'm not really sure about this but try to get ahold of "Maverick" that post here often, I believe that he is a CPA or some kind of $$ man, he might be able to answer this.

Name:	Blue Creeker -	Reply
Subject:	First of all, next time you...
Date:	12/22/2008 4:36:19 PM

...do something of this nature, you might want to have all the business end of it finished up before the match is lit.

Secondly (and to answer your question) you might want to contact city hall and/or the courthouse.

Name:	water_watcher -	Reply
Subject:	Tax Question??
Date:	12/22/2008 7:06:14 PM

You should have had an official appraisal prior to donating if valued over $500, which i assume it was.

Name:	GoneFishin -	Reply
Subject:	Tax Question??
Date:	12/23/2008 12:07:19 AM

I am not an accountant but will suggest a couple of things to you. First, there is a high probability you will be audited by the IRS if you take the deduction.

One question is did the fire and removal actually increase the value of the remaining property. At times, the removal of an old barn will increase the value of the land. Or, the value will be increased cause you can market it without any structure that has little value and had to be torn down to build. I don't believe you can not take a deduction if you gained from the contribution. Possibly, the destruction of the building can be considered as as income based on what you saved by not paying to have it demolished. That gain would have to be deducted from any appraised value placed on the structure.

I agree with the other posters that you should have had it assessed before the fire. It is quite complicated. Seek professional advice before you take a deduction from a CPA who will defend it when you are audited.

Wait and see what Maverick has to say.

Name:	Talullahhound -	Reply
Subject:	Tax Question??
Date:	12/23/2008 7:26:17 AM

We donated our old cabin to the Equality Fire Department. Here is what we did. We hired an appraiser to get an appraisal on the building. Then they used the cabin for the fire training. Then we got a letter from the Fire Department (on their letterhead) saying that we had donated the cabin and that we had agreed that we would not claim an insurance deduction. Thanks fot someone here on the forum, we actually ended up with photos of the cabin burning.
We used this documentation to claim the donation to the Fire Department. And we had no problem with the IRS.

Name:	water_watcher -	Reply
Subject:	Tax Question??
Date:	12/23/2008 7:33:03 AM

Just so you know, under $500 you do not need any support or documentation. So you can safely take a $500 deduction. If the value is higher you need an appraisal ... you can't just develop a value on your own and get someone to sign. The appraisal has to be based on market value and what a willing buyer would have paid. If you know someone in the real estate business, they can probably give you something official that estimates the value, then get the fire dept to sign that they accepted your donantion for training purposes. The difficult part is if you kept the land. Although the building has its own value.

The IRS rarely audits a return based on charitable contributions unless they are extremely excessive compared to your income.

Name:	mcintpa -	Reply
Subject:	Tax Question??
Date:	12/23/2008 10:29:31 AM

If the deduction claimed is greater than $500 a description of the property must be filed with the IRS (i.e. in your return).

If the deduction taken is more than $5,000 a qualfied appraisal must be completed and attached to your tax return.

http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000170----000-.html

this is the link for IRC Section 170 dealing with charitable contributions. Go about two-thirds of the way down the page to Section 170 (f) (11), and you will find your answer in legal form- along with more info on what the IRS defines as a qualified appraiser.

Name:	Talullahhound -	Reply
Subject:	Tax Question??
Date:	12/23/2008 7:05:02 PM

Our cabin was appraised at the time at $30K. We had our paperwork in order and we had no problems with the IRS.

Name:	Maverick -	Reply
Subject:	Tax Question??
Date:	12/23/2008 7:18:10 PM

The best advice I can give you is to hire a tax professional and have them write an opinion letter if they state such is tax deductible -- then have then specifically state what you need in writing in order to deduct such on your tax return and if you are audited they will pay any penalties, interest, etc if the deduction is disallowed.

This is a very GRAY area and if the NON-CASH charitable deduction is outside the norm of your income bracket I can almost guarantee you, your return will have a high probability of being kicked out by the IRS computers for a review. As the IRS has 3 years from the date the return was to be filed or was actually filed which ever is later, to request additional documentation.

What I will say is if you do not have in writing that you are unequivocally transferring 100% of your rights in the property to the fire department to do with such as these please then you have not given up your rights in the property and the deduction will be disallowed.

Also there are Limits as to What You Can Deduct within the year of Donation -- The tax deduction for charitable contributions generally is limited to 50% of your adjusted gross income (AGI). The deduction for appreciated property is limited to 30% of your AGI if you choose to deduct the fair market value of the property or 50% if you choose to deduct the basis of the property. The 30% limit also applies to charity donations of property to certain organizations, such as veterans' organizations, fraternal societies, nonprofit cemeteries, and certain private nonoperating foundations, and to donations of property for the use of an organization. A 20% limit applies to gifts of capital gain property to or for the use of an organization subject to the 30% limit. Contributions in excess of the limit can be carried forward for up to 5 years.

So long story short -- SEEK TAX ADVICE as this is a very complicated tax matter and has a high probability of the IRS seeking additional documentation surrounding the NON-CASH charitable contribution.

Name:	Ulysses E. McGill -	Reply
Subject:	I agree with Mav
Date:	12/24/2008 12:10:41 AM

My wife has a tax and accounting business and when I suggested she give advice on this she said it was a bucket of worms (given the posted information), and an accepted opinion letter would be needed from the IRS. It would cost some money to make this situation bullet proof, and even then it may be a loser depending on the details.

Name:	Swimmer27 -	Reply
Subject:	Tax Question??
Date:	12/24/2008 8:39:34 AM

A freind told me recently that he tried to donate an old trailer to the local fire department and they wouldn't accept it. Apparently there is and issue wih formyldahyde (sp) in them whci becomes a liability for them to burn. It iis the same with some older buildings that contain asbestos. Just proof once again that no good deed goes unpunished.

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