Did some guy donate a missile silo to charity for the tax writeoff?

Factual Questions
1

I recall reading a story a few years back about some guy in the 'states who owned a missile, or a launch silo for one, or both. As I recall it, he donated it to a local museum or charity, then claimed the original building cost (many many millions) as a tax write-off, meaning he never has to pay taxes again.

I admit it sounds like a ‘wishful thinking’ thing that belongs on snopes.com, but I’m fairly sure some of my ‘facts’ are true, and I’d like to fix it one way or another. (Google has been rather reticent coughing up the goods.)

As you might suspect with an OP like this, I bet my dad it was true; he’s already tried to call me on it when I told him the CEO of Nokia got a 1/4 million dollar traffic ticket in Finland - one more and maybe he’ll believe everything I say! :wink:

2

Well, for one, the part about “never has to pay taxes again” sounds fishy. I may be wrong, but I believe there’s a limit to how many years you can carry over a deduction.

Btw, there is in fact at least one home available built from a converted missile silo. It’s located in upstate New York. http://www.silohome.com/

3

The never have to pay taxes again is flat out wrong. There’s what’s known as the Alternative Minimum Tax, which means that he’d have to pay something tax wise (there’s a thread about it somewhere, terribly complicated, IIRC). Plus, there’s the whole value of the thing. If the guy bought it for, say $25K, but claimed on his taxes it was really worth $25 mil, you can bet the IRS would be on his doorstep with audit forms in their hands. The only way he’s going to be able to deduct something like that is if he can prove that he bought it legitimately at a price far below market value, or that he spent enough money on improvements to the thing to make it worth $25 mill.

As for him buying one and donating it to a charity, that’s entirely possible.

4

I know there are plenty of places one can get a home built in a converted silo… For some reason I think this guy had the actual missile that went with it, and it was much smaller than the ones converted to homes.

I think there are some special rules for values for donated cars (you get at least the blue-book value or something) which is how the number was come up with.

Thanks! If I find the one I’m looking for, I’ll post it here.

5

"In the late 70’s, when most of our nuclear arsenal was converted from liquid to solid fuel, the U.S. Government auctioned off a number of obsolete missile silos and their contents. Mostly the silos got bought by local farmers who converted them for grain storage. I only know what happened to one of the missiles. It was offered at sealed bid auction and a friend of mine, Russell Seitz, bought it. When you bid on something like this, you have to send in a check for 10% of your bid as a deposit. He looked at his bank account, and figured he could spare about $300 that month, so that’s what he sent. When he discovered that he’d won the bid, he had to scrounge up the rest. Now the buyer must pick up the goods himself, but he can request that his purchase be delivered, at government expense, to the nearest military base. Being an undergraduate at M.I.T. at the time, he had the missile shipped to Hanscom Airforce Base, about 12 miles away. He then arranged for a truck, and donated the missile to a local modern art museum (I forget which one). Tax laws were a little different in those days, and if you donated something to an art museum, you could deduct not the just the purchase price, but the original value of the object, which was considerable. Income averaging allowed him to spread the loss'' out over a number of years so that he didn't have to pay taxes for a long time! He was legendary at M.I.T. for quite a while, and acquired the nickname Missile’’ Seitz.

(I didn’t know Russell at the time, I heard the story from members of the MITSFS, and later from Russell himself. My apologies if I have garbled any of the details. Having seen some of the other artifacts he collects, I have no reason to doubt his story. I believe he may also have donated the ``gavel’’ to the MITSFS.)"

https://www.milk.com/wall-o-shame/government_surplus.html

6

And, for once, a zombie gets properly nuked! Welcome to the Dope!

7

That someone reworked the tax myth to be the missile rather than the missile silo isn’t proof of anything.
Seitz is photographed having parts to assemble.
The quirk of the art tax deduction law would be applicable in a different case…

You buy an art work for $500 but it turns out that its worth $200,000. For some reason, you’d prefer the tax deduction rather than have to pay tax on a sale. So you donate it, and get a tax deduction on the $200,000 donation.

Evidence required… that you should have paid $200,000 for the artwork.

Problem with the missile story ? Seitz could not say he *should have paid * the original price.
I dont think he can say it was created as artwork… no one would accept that the gov created the artwork, any one can see that Seitz created artwork by putting the scrap he collected together.

8

Last time I checked, donations to charity are only deductible IF you itemize (which means you don’t get to use the standard deduction, it’s an either-or-not-both kinda thing) AND only deductible up to 50% of your Adjusted Gross Income. A huge donation can cut your taxes approximately by half, perhaps two thirds, but won’t get you to zero.

Example: You earned $40,000 minus one $4,000 exemption gives you an AGI of $36,000. You have $1,500 in deductions, so you take the standard deduction of $6,000 instead. Hence, you owe taxes on $30,000, which comes to about $4,000. But if you donate to charity something big which, by some miracle, you convince the IRS that it’s worth millions even though you only paid a few grand for it, then you can deduct $18,000 that year (50% of your AGI) plus your $1,500 other deductions, so you owe taxes on $16,500, which comes to about $2,000. Basically, you cut your tax bill in half. Your tax bill is NOT zero.

You also have to calculate the Alternative Minimum Tax and see if that’s more. The only way this works out to you owing zero dollars for income tax is if (a) you had lots of other deductions such as excessive medical bills and mortgage interest, or (b) you had lots of tax credits such as the Earned Income Tax Credit.

There are cautionary tales about people who won huge prizes and said “Eh, I’ll just donate the whole thing to charity” and ended up owing more taxes than they could ever pay. If you win a million dollars at a casino and give all the money to charity, you basically end up owing taxes on about half a million dollars, somewhere in the neighborhood of $200,000 debt. And it never goes away, even if you declare bankruptcy.

However, the story about the MIT guy uses the word “loss” in quote marks. Donations and losses aren’t the same thing. Losses aren’t subject to the 50% AGI rule, but they are subject to a whole bunch of other rules. I say this story sounds very fishy. Like when you hear a second-hand story about a 400 lb fish that was caught in Lake Tahoe-- yes there was a fish, yes there was a boat, yes a person on the boat caught a fish, NO it did not weight 400 lb, and NO it wasn’t true that they never had to buy groceries again. I rate this story as “partly true, likely embellished”.

And, if you have a windfall and you want to donate it to charity, consult a tax attorney first. IANAL