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Tax Appraisal Reports

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wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Have a HO that wants an appraisal for tax purposes is adding a swim spa, office, and excise room. Currently halfway through completion. Wants the appraisal with a retrospective opinion of value (day prior to work began) and prospective opinion of value (or "as-is" and "as complete"). The HO's CPA state that she may be able to write off the difference of cost vs. actual market added value on her taxes. For those that have completed something like this, is it easier to complete on a URAR, 2055, or as a narrative style for reporting content. What additional questions should be asked of the CPA? First one that I can think of do they need an extration for the opinion of market value for the addeded items?

Thanks in advance.

Ryan
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Ryan,

IMHO the CPA is 'all wet' .. however, Get Paid!
 

john mello

Freshman Member
Joined
Feb 12, 2002
Professional Status
Certified General Appraiser
State
Massachusetts
The effective date should be the "valuation date" that is used by the local taxing authority for the fiscal year in which the new improvements will be assessed as part of the real property.

Is the CPA's rationale for trying to recognize the cost vis. market value increment an unrealized capital gain??? The CPA's explanation for this recommendation would be very interesting... somewhat dubious...
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
And we wonder wny the tax code is so large? This is the sort of stuff that keeps CPAs in business.

Roger
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
The CPA's thinking is that they can depreciate the cost vs actual market value. ie.. cost equals $50,000 contributory market value of the new swimming pool, new office, and new work out room equals say $10,000. (Do not know for sure yet). The CPA thinks that they can depreciate the $40,000 on taxes.

Ryan
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Ryan,

Perhaps at time of sale, but (like holding a stock that has gone down in value) would suspect that it would require a transaction to establish the loss ..
Sounds like a newbie CPA to me .. or a 'con' ..
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
Cash up front. You are doing 2 1/2 appraisals +-.

Depends on the property. USPAP is going to require a cost approach. 1004ab.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
1004 or narrative. Get the $$ up front, just in case the HO or CPA come to their senses when you are 3/4 of the way done.
 
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