810-27-1-4-.12 Property Factor: Averaging Property Values.
As a general rule, the average value of property owned by the taxpayer shall be determined by averaging the values at the beginning and ending of the tax period. However, the Commissioner may require or allow averaging by monthly values if that method of averaging is required to properly reflect the average value of the taxpayer's property for the tax period.
Averaging by monthly values will generally be applied if substantial fluctuations in the values of the property exist during the tax period or if property is acquired after the beginning of the tax period or disposed of before the end of the tax period.
EXAMPLE: The monthly value of the taxpayer's property was as follows:
January
$2,000
July $15,000
February
2,000
August 17,000
March
3,000
September
23,000
April
3,500
October 25,000
May
4,500
November 13,000
June
10,000
December 2,000
$25,000
$95,000
Total 120,000
The average value of the taxpayer's property includable in the property factor for the income year is determined as follows:
$120,000/12 = $10,000
Averaging with respect to rented property is achieved automatically by the method of determining the net annual rental rate of such property as set forth in Reg. 810-27-1-4-.11(b).
Author: Peter M. Petrillo, Jr.
Authority: 40-2A-7(a)(5) and 40-18-57
History: Filed with LRS March 22, 1994. Certification filed with LRS June 10, 1994, effective date July 15, 1994.
