Income tax questions
Often, the town wants the tax stretched out over time, to tax future increases in value resulting from betterments and the market success of a project. income tax questions Taxes. A developer often wants the tax paid immediately for just the opposite reason. Each project must be reviewed carefully to plan the events that will trigger the tax in a way that minimizes or delays the impact. Topography, frontage, lot sizes and the like will determine the best timing for payment of the land use change tax - either at once or in increments stretching the liability over time. income tax questions Irs form 8283. Recent controversy over the land use change tax has focused on the impact of betterments. The issue here is whether the value of a road, utility system or other improvements in a project add value to the land for determining the land use change tax. Going back to our Concord example, if the developer installed a $100,000 sewer line to the property, would the valuation be increased to $350,000?Prior to February of 2001, the rules of the Current Use Advisory Board specifically excluded betterments in calculating value. income tax questions Ohio tax forms. In Appeal of Estate of Richard Van Lunen, the New Hampshire Supreme Court upheld the rule excluding betterments from valuation. However, on February 22, the Current Use Advisory Board changed its position and adopted a new rule, Cub 308. 01, stating that valuation shall be based upon ". . . the highest and best use of the land, including the value of all betterments serving the land. " The Current Use Advisory Board also adopted a rule defining betterments, Cub 301. 01, to include roads, water lines, sewage lines, utility lines or other physical improvements. This rules change will create substantially greater tax exposure, and has stirred some controversy. A legal challenge to the rule is expected. In the meantime, great care must be taken in starting work on a project to avoid having ill-timed project expenditures for betterments drive up the land use change tax penalty. There may be one bright spot. Depending on the circumstances, it appears possible that developers may be able to expense the land use change tax and deduct the amount on the federal return in the year it is paid. In Sandy Lake Road Limited Partnership v.
Income tax questions
Help || Tax attorney || Colorado tax forms || Free tax software