Chapter 18 - Taxes Affecting Real Estate Flashcards
Adjusted basis
The owner’s original cost plus buying expenses and capital improvements.
Ad valorem
According to the value; in proportion to worth.
Assessed value
The value of a property for tax purposes.
Boot
Additional capital or personal property included in a like-kind exchange.
Capital gain
Profit from the sale of property.
Depreciation
A key deduction when calculating taxable income from investment property because it reduces taxable income without requiring a cash outlay.
Exempt (property)
Property that is excluded from taxation, including property belonging to churches and nonprofit organizations.
Green Belt Law
Legislation designed to protect farmers from having taxes increased just because the land might be in the path of urban growth.
Immune
Real property that is owned by a unit of government and is not subject to taxation.
Just value
The fair and reasonable value based on objective valuation methods for property tax purposes.
Mill
One one-thousandth of a dollar or one-tenth of a cent.
Partially exempt
Property subject to taxation, but the owner is partially relieved of the burden.
Special assessments
One-time taxes levied on properties to help pay for a public improvement that benefits the property.
Taxable value
The nonexempt assessed value that is determined by subtracting the applicable exemptions from the assessed value.
Tax shelter
The shielding of income or gain from payment of income taxes.
