Your clients, John and Ashley Jackson, recently purchased property in Denver, Colorado. The Jacksons paid $4.5 million dollars for the property. There is an existing, modest house on the property that was built in 1951. The Jacksons purchased the property for the land (and location) as opposed to the existing house. The Jacksons would like to demolish the house and build a large, multi-million-dollar house on the property. Rather than paying a contractor $75,000 to demolish the existing house, the Jacksons are considering donating the house (but not the land) to the Denver Volunteer Fire Department with the stipulation that the fire department will quickly burn it down as part of its firefighter training program.
write a letter to the client whether or not they can deduct the donation of the house on their federal income tax return.
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