Mann v. United States: Lost Opportunity to “Salvage” A DeductionMann v. United States: Lost Opportunity to “Salvage” A Deduction

The scarcity of land for residential use in urban and suburban areas makes relocating more difficult than building a residence on undeveloped land. It may be more practical, though possibly more expensive, to buy a new residence in a desired neighborhood with the goal of destroying it and building a new one. Some taxpayers got the idea of donating a building about to be demolished to firefighters for their training and taking a charitable deduction for the value of the building, known as a “demolish and construct” strategy. But this didn’t always work out as planned. Let’s examine that strategy as well as one of “deconstruct and construct,” in which taxpayers missed the opportunity to claim a deduction.

Deconstruct and Construct

In Scharf ...