Anonymous wrote:It's still an open question. There's an IRS advisory opinion from the 1970s that people use as the basis. A court case a few years disallowed the deduction, but only because the taxpayer didn't do the appraisals correctly. The court never reached the question of whether the deduction was proper. We donated our house in Fairfax County in 2008 and took the deduction. The 3-year audit period has now passed.
There's a 2012 Tax Court case disallowing the deduction based on Virginia law. I wouldn't try it in Virginia. Donate the house's materials to a deconstruction firm and take your deduction that way.