Well, every once in a while you have a piece of property that is actually worth something, but the old run-down building or house on top of it, makes it impossible to do anything with. Getting permits to demolish stuff can be as aggravating as getting permits to build something sometimes. Of course, if you have the blessings of some of the local municipal higher ups and a little political influence, you can make at least some headway.

Okay, with that in mind let me tell you an interesting story. Donated an old farm type house (very old) to the fire department for training, took the donation gift deduction and got a property tax deal, they burnt down the place, at least 15 times in practice. Finally there was nothing left, and the fire department tilled under all the ash. Great, got rid of the place, without demolishing permits and didn't have to haul away any junk. Good deal right?

Well, here is the final score; got the commercial zoning change, the property was re-assessed and now there is no junky home on the property, so the property, well, it's suddenly worth more. No problem right, next year, higher property taxes, but gonna build on it anyway, but that is only half the issue. What other issues need to be addressed, it's a done deal right?

Ah, but now that the property is worth more creating a capital gain, so that negates the "donation gift" that was taken and deducted last year. Since it was a gain and no longer a gift, which in reality is true, the gift was made in order to gain. It's just unfortunate, would have been nice to have the cake and eat it too!