VOCAL Neighbors

Another bum rap for landmarking

One of the big items that gets touted by the pro-preservation societies is that if you are in a confirmed historical building, and donate your building facade to them, you can get a charitable tax deduction. Theoretically, it could be as high as 10%, which is viewed as corresponding to the diminution in value of your home as a result of the easement you donated to the preservation society. (Of course, like all charitable deductions, this one is inherently limited by all of the other limitations in the tax code on the availability of Schedule A itemized deductions, disappears if you are subject to the alternative minimum tax, etc.)

Guess what? Not only is the IRS starting to really crack down on these things from a valuation perspective, BUT, if you are already in a landmarked district, you CANNOT get a tax deduction at all. I'll try to publish a link to the IRS letter rulings as soon as I can find a good one, but if you are in a district that is already landmarked, the IRS perceives that you have nothing of value to donate anymore. From their perspective, you were already limited in what you could do with the property by virtue of being in a landmark district, so the charity gets nothing of any further value. So you get no charitable deduction, and have put an easement on your property for nothing.

posted by The Grants @ 2:49 PM