Ad valorem
- property taxes
- charged in relation to the value of the property taxed (Assessed value x tax rate = actual tax)
County assessor
Is the elected official responsible for determining assessed values and preparing the tax roll.
Change in ownership statement
-Anyone who acquires an interest in real property must file this with the county recorder or assessor within 45 days of the date the transfer is recorded.
Morgan property taxpayer’s bill of rights
Requires the county assessor to allow inspection and copying of documents related to an assessed property, including an auditor’s work papers.
Property tax year
-Runs from July 1 through the following June 30
Special assessment
- Can be imposed on real property for a specific local purpose, such as street construction or repair
- it appears as a separate entry on the property tax bill
- are made on an ad valorem basis and are liens on the property until paid
- Acquire approval of two-thirds of voters
Benefit assessment
- Aka local assessment, levy based on other than assessed value, special benefit assessment, or special assessment
- differs from s special assessment in that it’s tax base is only the properties benefited
- not a deductible tax for federal and state income tax purposes
- considered a nondeductible assessment to finance a property improvement, rather than a deductible assessment to finance maintenance.
Mello-Roos community facilities act
- a special form of property assessment
- law expanded the type of facilities and services that could be provided by improvement bonds and also eliminated the requirement that improvements specifically benefit individual properties
Minimum sales tax charged in California
7.5% of gross receipts
Sales tax
-Owed by retailers of tangible personal property regardless of whether the tax was paid by a customer
Use tax
-is charged to the purchaser for storage, use, or other consumption of certain purchased or leased tangible personal property.
Gift
-is a voluntary transfer by an individual of any type of property for less than full consideration
Adjusted gross income
Is the taxpayer’s total income
Taxable income
Is found by taking allowed exemptions and deductions from adjusted gross income
Tax bracket
Is the tax rate applicable to a taxpayer’s taxable income
Ordinary income
Is included in adjusted gross income for tax purposes and includes wages, business income, profits, interest, dividends, rents, and royalties, among other items.
Capital asset
-is all property except business inventory or other property held for sale in the ordinary course of one’s business
Basis
-Generally is its cost when acquired, also known as book value
Adjusted cost basis
-the result of property ‘s basis reduced by the amount of depreciation already claimed, but it also can be increased by the cost of any improvements made.
Capital gain
-is the difference between the sales price of a capital asset less selling costs and its adjusted cost basis.
Tax credit
-is a direct deduction, not from income but from tax owed.
Recovery property
-buildings used in business or for rental or other income-producing activities
Tax deferred exchange
-the properties exchanged must be of like kind in nature or character.
Installment sale
-a taxpayer sells property and receives payments over a term that extends beyond the present tax year.
