Real Estate Principals and Practices

Instructor: Jan E. Beran, Esq.

Taxes and Assessments
Ch. 15 Jacobus
I.   Real Estate Tax:  aka ad valorem tax (according to value).
     A.   Assessment:  the value of the property for tax purposes.
     B.   Equalization
     C.   Tax Rate and Mil Levy.
          1.   Budget (example). . . . . . . . . . . . . . . . .$300,000.00
          2.   Assessment roll . . . . . . . . . . . . . . . $10,000,000.00
          3.   Tax Rate (Budget ÷ Assessment roll) . . . . . . . . . . . 3%
               Options to expressing rate:
                    (1)  Mill levy . . . . . . . . . . . . . . . . 30 mills
                         1/1,000 of a dollar of valuation.
                         1 mill = 1/10 of a cent
                    (2)  $/$100 (per hundred). . . . . . . . . . . . . . $3
                    (3)  $/$1,000 (per thousand) . . . . . . . . . . . .$30
          4.   Equalization.
          5.   Tax Bill
     D.   Payment:
          1.   Payable in advance
          2.   Payable in arrears
     E.   Enforcement
     F.   Notification of Sale
II.  Property Tax Exemptions
     A.   Government property
     B.   Charitable property (churches, hospitals)
     C.   Homestead (elderly and disabled)
     D.   Property Tax Exemption Incentives
III.      Special Assessments.
     A.   Improvement districts (Sanitary, Street, Sidewalks)
     B.   Bond issues
     C.   Apportionment
IV.  Income Tax Issues:
     A.   Capital Gain
          1.   Basis:
          2.   Realized gain (loss)
     B.   Reporting sales:
     C.   Installment method of reporting gain
     D.   Property Tax Deduction on Itemized Statement
V.   Conveyance Taxes:
     A.   Federal (ended 1968)
     B.   State presently $1.75 per $1,000 or part thereof of value