Tax Appraisal Reports

[wyecoyote]

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]

Ryan,

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

 

[john mello]

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]

And we wonder wny the tax code is so large? This is the sort of stuff that keeps CPAs in business.

Roger

 

[wyecoyote]

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]

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]

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]

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.