Tax Update Blog: Permalink
« Previous · Tax Update Blog Home · Next »
TAX COURT POPS NELIGH, NEBRASKA REAL ESTATE BUBBLE
September 30, 2005
Forget Manhattan, London or Tokyo. If the tax return filed by a Nebraska LLC is to be believed, the world's hottest real estate market was Neligh, Nebraska. The partnership bought 30 acres there for $75,000 in May 1997. 17 months later they donated it to a religious order and claimed a $475,000 fair market value charitable deduction.
Hottest real estate market of the 1990s?
The Tax Court cooled that market down yesterday, ruling that the value of the property was $76,200 on the date of donation. The Tax Court found the IRS appraiser, the county assessor, and the actual sale price 17 months earlier better indications of value than the taxpayer's appraisal.
Interestingly, no penalties were assessed, even though the tax law provides a 40% penalty for gross valuation overstatements. That means the taxpayer appraisal was at least good enough to fend off the penalties.
Cite: Wortmann, et. al. v. Commissioner, T.C. Memo 2005-227
Bookmark: del.icio.us • Digg • reddit
Tax Updates
Subscribe to Tax Updates
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not neccesarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
Search Tax Updates
Friends and Neighbors
Economics Nerds
Hard-Core Tax Nerds
Gigablogs
Insurance Folk
Goners
Legislation
Tax Update Data Feeds
Comments
I'm sorry, but is there 30 acres anywhere in Nebraska worth $475k?
Posted by: thc | October 1, 2005 12:34 AM
I wouldn't give a nickel for Lincoln if the mighty Cyclones win there today. I have my doubts, though.
Posted by: Joe Kristan | October 1, 2005 9:02 AM