IRS doesn't like Herbstreit burning down his house.

In my view, this would fall under the category of an in-kind donation.

 

A decent analogy. However, there is a glaring difference between the two situations: He ALREADY was getting a big financial benefit and had a big financial incentive to do this even without the deduction. That ain't the case when you throw out old clothes.

Unlike removing a house, throwing out old clothes is not something that would've cost you much time and money to do yourself. The Fire Department didn't just take the thing from him, they effectively put tens of thousands of dollars in his pocket by doing something for free that he otherwise would've paid out the ass for.

So he was already coming out way ahead in this deal. The deduction did not create the financial incentive to do this, as it does in typical charitable donation cases like the old clothes example, instead that incentive was already there. Claiming the deduction was an attempt to take an extra benefit for it, and at 330K, a rather excessive one.

 

I guess I don't have a problem with the deduction, but it should be equivalent to the value of the donation or a preset amount. I doubt the FD got $330K worth of training out of it, plus they are out the expense of oxygen, fire staring materials, payroll/overtime, etc. I think the deduction should be a set amount, regardless the value of the house. You donate, you get to take $50K, something like that.

 

For volunteer firefighters, structured burns are the best way to learn. Considering these men and women don't get paid salaries and don't get paid training like many cities and counties do for their paid firefighters, having a house to burn courtesy of a generous donation is absolutely worth any amount of tax deduction that the owners get out of the donation.

My father has been a volunteer firefighter for 30 years and runs several of these exercises per year. It's not like they just set a match and let it go. They take hours upon hours out of their weekends to get as many different scenarios going as possible to allow their firefighters to learn and experience what a blaze is going to be like in different conditions. What if it's arson? What if there's a ton of trash or other obstacle blocking a doorway? How to rescue someone on the first floor, second floor, attic, basement. How to vent properly, how not to vent, how to do any number of things that we can't possibly think of. How does a fire spread in one part of a house versus another part?

There's no question in my mind that they got $330k of training out of the deal. And if I were the instructors in Ohio that received a house like this to work on, I'd be overwhelmed with the generosity.

 

IATS

 

So learning how to put out fires and possibly save a life isn't worth $150,000 to you?
Wow indeed.

 

So the guy's going to tear it down anyway, and build something new there, and so he "gives" the house to the fire department, which then burns it to the ground, and he gets six figures in return?

Fuck. Where do I sign up?

 

But he still has to pay to have the debris hauled away.
He's donating the house for a public service. They're not sprinkling lighter fluid on it and roasting marshmallows.

 

Possibly save a life?

Right... not worth it.

 

Release the ... apologists

 

Yes, save a life. I don't know where you live, but in my town we have structure fires. Sometimes it's house fires. I don't know exactly how many, but I'm guessing in a city the size of Columbus, Ohio, they have at least a couple dozen house fires a year. Not all of those happen at 2 p.m. when no one's at home.
Learning how to attack those type fires and move around in a burning house might mean the difference between life and death. If it saves one life, isn't that worth the price?

 

But the hauling expense is not one he's making out of charity. It's one of the expenses he would've incurred anyways. The only difference is by doing it this way his bill's a helluva lot cheaper because he's only paying the hauling expense after the Fire Department took the house down for him.

Bottom line: he'd be getting more than 6 figures back in his pocket by claiming a "charitable" deduction for an act that cost him absolutely nothing he wouldn't have spent anyways PLUS put thousands of dollars back in his pocket by sparing him the expense of tearing it down himself.

That, my friends, is making out like bandit.