IRS doesn't like Herbstreit burning down his house.

If the suit is still worth $500, then you do.

 

There are also charities you can donate an old vehicle to who will then auction it off to raise money for said charity. With the proper documentation you can deduct the amount of money the vehicle is sold for at auction.

 

That used to be a LOT easier than it apparently is now. Used to be you could donate a car and automatically get the Blue Book value, regardless of what it sold for at auction. Now you actually have to wait for the car to get sold, which can take many months. And because it's at auction, you're probably going to get a fraction of that Blue Book value.

Doesn't stop a lot of people advocating for it though.

Known to the chattering class on Harvard Square as Hughie Louie Dewey...

 

I wasn't real worried about Blue Book value on the truck we donated. And, as I recall, it only took a couple of months for the car to be auctioned and the paperwork to be sent to us.

 

Throwing out clothes in the trash has become incredibly costly.

The bags are like 17 cents.

 

The only thing Herbie did wrong was he claimed the wrong value of his deduction. The deduction itself is perfectly legit.

 

I studied the Tax Code in law school and while there might be a reason for a small deduction, taking a deduction for the full amount of the property and the house is ridiculous. The fact that it took the IRS 20 years to figure it out is our loss.

The principle of charitable is foregoing a benefit for the charity. Did herbstreit really lose $330,000 by allowing them to burn his house down? No. There was an inherent land value that he never relinquished.

As for the structure, yes he lost that but what did he really lose? It supposed to be the fair market value of what was lost, what was actually gained by the fire department? No its not the value of the experience, its the value of what it would have cost to do the exercise.

 

At some point, Herbstreit probably had an appraisal completed that said the house was worth X amount of dollars while the land was worth Y amount of dollars. Appraisals are not an exact science but he better have some research to back up the value of the deduction.

Just because someone buys a house for $330K, it doesn't mean the value of the structureencompasses the entire sales price.