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Contact Information:
Edward S. Kisscorni, CPA
290 Suncrest Court, SW
Grandville, MI 49418

Office: 616/233-0667
Cell: 616/443-6730
Fax: 616/233-0667

Blog: www.EdKisscorni.com/Blog1
Email: Ed@EdKisscorni.com
 



 



 

 Blog 
Friday, March 11 2011

The Tax Tribunal's Determination of True Cash Value Was Supported by the Evidence

In New Michigan, L.P. v. City of Norton Shores, Michigan Court of Appeals, No. 294678, March 3, 2011, the Michigan Tax Tribunal's determination that the highest and best use of a taxpayer's property for the local property tax years at issue was as an existing 58-unit apartment building was supported by competent, material, and substantial evidence, and the Tribunal satisfied its duty to make an independent determination of true cash value.  The evidence that the taxpayer chose to operate the 58-unit apartment building jointly with another apartment complex, and that a sale of either property required a change in operations, did not establish that the Tribunal erred in determining the highest and best use of the property.

There was no doubt that the taxpayer purchased the two apartment complexes at the same time and operated the two properties as a single economic unit.  However, because there was also evidence that each property could function and be sold separately, and that each had features that would attract different pools of buyers, the Tribunal did not commit an error of law or adopt a wrong principle by declining to apply a unitary approach to valuation.  Although it was possible that the taxpayer could sell the properties together, or that a prospective buyer could desire to make a single purchase without assigning value to each parcel, the court could not conclude that the taxpayer established the type of value-enhancing influences that would require the Tribunal to apply a unitary approach.

The Tribunal found that the taxpayer's evidence lacked sufficient reliability to determine a value for the 58-unit apartment building under the income-capitalization or sales-comparison approach. Therefore, the Court of Appeals found the Tribunal was correct in looking to the cost approach and using some comparable sales information to evaluate the accuracy of the cost approach to determine the value of the 58-unit apartment building.

Posted by: Ed Kisscorni AT 02:37 pm   |  Permalink   |  0 Comments  |  Email
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