Interesting -- in that case the ruling was no deduction at all was allowed. That goes farther than my answer. Although the tax court was severely split (9-8) so it might end up being reviewed again.
I think the maximum deduction would be the FMV or basis of the structure, certainly not the value of the training exercise. And if the taxpayer received a benefit (i.e. the land was cleared off so they could rebuild something better) then there might be no deduction allowed at all.
See here for more on this case,
<a rel="nofollow" target="_blank" href="
http://taxprof.typepad.com/taxprof_blog/2012/06/tax-court-.html">http://taxprof.typepad.com/taxprof_...>
<a rel="nofollow" target="_blank" href="
http://www.ustaxcourt.gov/inophistoric/pateldivision.tc.wpd.pdf">http://www.ustaxcourt.gov/inophisto...>
