50 Ind. Admin. Code 29-3-7
Authority: IC 6-1.1-4-42
Affected: IC 6-1.1-4-42
Sec. 7.
Where there is a negative net operating income, therefore, producing an assessed value of zero (0), the assessing official shall first ensure that all income and expense information is accurate. Where, despite a review of the information, the assessed value is still negative or zero (0), the assessing official shall determine the market value-in-use that results in a liability of five percent (5%) of the adjusted gross income, as illustrated by the following example:
Assuming a 12% Overall Capitalization Rate
Assuming $300,000 in Expenses
Gross Income = $500,000
Less Golf Cart Income = <$150,000>
Less Pro Shop Income = <$50,000>
Adjusted Gross Income = $300,000
Less Expenses = <$300,000>
Net Operating Income = $0
Multiply Adjusted Gross Income by 5% = $300,000 × 5% = $15,000
Divide above result by 12% Overall Capitalization Rate = $15,000/12% = $125,000 Assessed Value
50 IAC 29-3-7