R3: Property Taxation

Question 1

De minimis safe harbor

Answer 1

• $5,000 expensed per fixed assets if the company has audited financial statements (AFS)
• If no financial statements, then $2,500 per item (If more than that, none of it is deductible)

Question 2

Step-up or down basis

Answer 2

Inherited property “steps up” to the basis equal to the FMV at date of valuation