Client inherited two residential buildings in Santa Monica. One has a FMV that is double the other. The values for land and improvements on the real estate bills are way below FMV. If I try to use percentages to arrive at land value the one with a low FMV comes out to be 57% and the other 37%. This does not seem right to me. How do CA tax professionals handle this?
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CA Tax Professionals..??
Very Carefully!!
No Seriously...
On a Land Sliding Scale....
Sorry - couldn't resist.. Very long week.. Glad it's Friday.
No clue - Opposite side of Country in good ol.... Jersey...
Best of Luck...
Originally posted by Kram BergGold View PostMatthew Jones
Tax Preparation
Computer Consultant
Tax Season is here!
Make sure everything is working, extra ink or toner is available, Advil in top drawer!
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Many areas in CA with the same zip code might have way differing values. I would not let that throw you. I was in Santa Monica yesterday and I can tell you I drove through two areas vastly different in value.
You could use the tax bill as a guide for land vs improvements then apply them to an appraisel amount for each property. I've called brokers or rental mgmt companies for this FMV information in the past when no appraisel was available. Some were very helpful to me and FMV info was right on target. Keep this documentation for your files, if ever asked how you arrived at FMV. I was once and they accepted it.Comment
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Not in CA
Here in CT the land values are far above 50% of appraised values for anything but the newest buildings. If the inherited properties are likely to be demolished or totally renovated, then the land is the bulk of their current value. Talk to realtors familiar with those areas and those types of properties. If a lot of money is at stake, urge your clients to get formal appraisals.Comment
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FMV and the realtors...
Good info.. I'd add one more.. I've done this in the past.....
Contact a commercial Realtor. Inform them that you inherited the properties and you are trying to determine what to do.. It was a (good) surprise but you're not sure if you are up to the challenge and may sell the properties. They can perform a market analysis and provide FMV current values. I actually received a full report with comparison values from two different perspectives.. This was a few years ago. I'll talk to my realtor (one of my clients) and see what she thinks.
With the markets the way they are I'm sure you'll find a realtor willing to jump on this for you. Assuming you are charging the client you can always throw the realtor a bottle for their time and effort while you decide if you are going to sell.
Originally posted by DTS View PostMatthew Jones
Tax Preparation
Computer Consultant
Tax Season is here!
Make sure everything is working, extra ink or toner is available, Advil in top drawer!
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Contact the attorney that handled the Trust or Estate
The only thing the IRS or California will accept [If audited] is a formal appraisal. This should be done by a cetified appraiser.If your client was the successor trustee? Then have him get an appraisal for you. It is our job to prepare an accurate tax return and not to determine FMV, right? Have a good one BobComment
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SFBOB is on point, advise your client to pay the price for a certified appraisal. As much as our profession overlaps with real estate appraisals, law, and many other professions, we need to exercise professional judgement and advise our clients accordingly.Dave, EAComment
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Appraisal
Your taxpayer or successor trustee (in California) can contact the Probate Court even if there is not a Probate Estate and request that a Probate Referee/Appraisor - appraise the property - their fees are reasonable and they provide a very nice appraisal package.
Here is a link that might help http://probatereferees.org/
I have had several of my clients use this process - even though the estate was not subject to probate.
SandyComment
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