Save Deconstruction Deductions: Coalition Formed to Protect Environmentally Friendly Demolition Alternative
On: October 31, 2019 | By:
FREDERICKSBURG, Va. and SAN FRANCISCO, Oct. 30, 2019 /PRNewswire/ -- A CPA and an Environmental Activist have teamed up to organize support for the demolition alternative known as "Deconstruction", in which the components of a building are carefully removed by hand to be later donated and reused as opposed to smashed to pieces and sent to a landfill. While this technique creates green jobs, conserves resources and keeps reusable building materials from going to the landfill, it is a labor intensive process that has more upfront costs than using an old fashioned wrecking ball. Fortunately the appraised value of the donation of the reusable building materials that deconstruction makes possible is recognized by the Internal Revenue Service as a legitimate tax deduction as long as it is properly claimed on Form 8283, which is prepared by a specialized appraiser and signed by the nonprofit organization that received the donated building components to make available for the public to reuse.
Unfortunately, the "Deconstruction Deduction" has been misused and abused by poorly trained and under-regulated appraisers. In some cases, donated building material valuations have been intentionally inflated sometimes in coordination with dishonest contractors and even at the insistence of the receiving nonprofit organizations. The problem has become so prevalent that an industry trade group, Build Reuse, has invited a representative of the IRS to address the issue at its annual conference for the second year in a row. Build Reuse's mission is to empower local communities to transform their building material waste into local resources. This year, the annual Build Reuse conference will be in Pittsburgh, PA Oct. 28-30th. The industry now faces the choice of reforming itself or losing the appraised value deduction entirely, much the same as what happened with donated cars a decade ago. IRS audits have started cracking down on the abuse and at least one lawsuit sustained the IRS' position. In situations like this the taxpayer is the one left holding the bag, costing thousands in lost deductions, penalties and fines as a result of potential abuse between appraisers, contractors and nonprofits that promote an overly-aggressive tax scheme.
Ed Dunn, San Francisco, CA is a life-long leader in the environmental movement on the resource conservation side. He has extensive experience operating recycling centers since his father helped start one in the SF Bay area shortly after Earth Day in 1970. In the 1990s, he helped found a building materials reuse yard and directed a pilot deconstruction project on a former army base. He also has a background in public safety, serving in his local fire department for 12 years. Jessica Marschall, Fredericksburg, VA is a CPA of 18 years specializing in tax advisory services for individual and small businesses. Her driving motivation are her five children when advocating for environmental reform, supporting elected officials embracing environmental regulation and sustainability, community organizing for commonsense gun control legislation, universal access to healthcare, and foster-to-adoption law reform. She is also an adjunct professor.
The unlikely duo of Marschall and Dunn hope to pull together enough deconstruction industry stakeholders to reform the deconstruction donation deduction excesses and head off the more draconian solution that looms if the abuse continues unfettered. Controls need to be put in place assuring consumers who chose the donation option are receiving accurate valuations on the appraisals of the used building materials that are salvaged after their homes are deconstructed. They hope to grow a grass-roots movement within the industry to address this problem. Please reach out to Ed Dunn or Jessica Marschall SaveDeconDeductions@gmail.com or request an invite to our closed Facebook Group "Save Deconstruction Deductions."
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