This first curated blog post comes from The Washington Post:
For several years, Detelina Ivanova had been eyeing a rundown house that was for sale on an overgrown, one-acre lot in Vienna, Va. Just 1,200 square feet, the 1950s two-bedroom house with one story and a basement had been vacant for 10 years, sinking into deeper disrepair even as larger new houses were replacing other vintage houses in the neighborhood.
The house itself was not worth repairing, but Ivanova and her husband saw opportunity in the lot. Large and well-located, it was the ideal site for a large new custom home. As soon as the price dropped, Ivanova bought it in April 2015.
She chose Stahl Homes in Vienna to design and build a 7,000-square-foot, Craftsman-style custom house on the property. Of course, to prepare the site for the new house, Ivanova had to clear away the old one. Stahl suggested a way to accomplish that while potentially netting a substantial tax break for the family.
Called deconstruction, it entails taking a house apart, piece by piece, down to the foundation. The majority of what is removed from a house via deconstruction can be recycled or reused. Everything removed from the house and donated to a qualified 501(c)3 charity can be claimed by the property owners on their taxes as a donation at fair market value.
The Ivanova appraisal report documented that her donation had a fair market value of $131,500. The net amount of the donation represented a $51,000 tax benefit. The family received a substantial tax refund.
“For a typical taxpayer who pays approximately 30 percent between state and federal taxes,” says Patrick Smith, president and chief executive of NoVaStar Appraisals in Fredericksburg, Va., “a $131,500 tax deduction is equal to an actual cash value of $39,450.”
Marishane Stahl, who owns the custom home building company with her husband, Mark, says Stahl Homes has bought several houses and replaced them with houses for sale in the past two years; the company has used deconstruction to remove the existing structures at three of the sites. “It’s a great way to salvage material,” Stahl says. “We feel good that there is less waste, plus the tax benefit can be significant.”
The Stahls regularly recommend that their clients look into the benefits of deconstruction.