City assessment for street, curb & gutter, and storm sewer

[JON]

I agree with both

if for completely new - capitalize - as land improvement and if it is repairs or maintance deduct it. Here in the land of 10,000 taxes Cities are forced to issue statements to help with residential - Wayazta and Maple Grove.. I do not think it makes a difference between commercial and residential, treatment should be the same. Although the deduction for the homeowner is additional real estate taxes - commercial when do the new repairs and maintenance rules get involved???

[Kram BergGold]

Added to Basis

Ok, many of us agree you add to basis. Does it not stand to reason, if you add to basis and it is for business, that you depreciate it.

[Gary2]

Ok, many of us agree you add to basis. Does it not stand to reason, if you add to basis and it is for business, that you depreciate it.

Not necessarily, because land is not depreciable. And the value of whatever improvement was done by the municipality benefits the parcel, regardless of what buildings are constructed there. So if you have a small business with the basis allocated as $50K land and $50K building, then the town paves the dirt road, hitting you with an assessment but doubling the property value, so you turn around and sell it to another person, are they going to split the basis as $100K land and $100K building? No, because the value of the structure didn't change. They need to allocate it as $150K land and $50K building. They can tell this because the vacant lot next to you went up in land value by the same amount.

[JON]

If the taxpayer pays to have the road paved and gutters put in

would you just add the costs to land and not depreciate them. In either case if in a business (land not held for resale) - I would call all land improvements and depreciate. In either case the taxper is paying for the improvements.