Lured by the prospect of free demolition, homeowners around the country sometimes offer their houses to the local fire department for training purposes. The department burns down the house, clearing the way for the owner to build a bigger and better home.
In court cases in Ohio and Wisconsin, the IRS is arguing that because such houses are already slated for demolition, donating them for fire training isn't an act of charity. ...
Steven Willis, a professor at the University of Florida who studies income tax law, said a charitable deduction can be no greater than the value of whatever was donated, and a house given to a fire department has negative value, since the owner was going to have to pay somebody to get rid of it.
"The whole idea of a charitable deduction is that you give something to charity and you don't get anything back, right?" said Paul Caron, a tax scholar at the University of Cincinnati. "When you give $100 to the Catholic Church, you don't get anything for that $100."
The IRS maintains in court papers in the Wisconsin case that the homeowners do not qualify for a deduction because they are donating only a "partial interest" in their home, rather than the entire property. The agency also says homeowners are letting firefighters only use the property, not donating it in full.