R15-2D-606. Averaging of Monthly Property Values

The Department may require or allow averaging of monthly values if that method is required to properly reflect the average value of a taxpayer’s property for the tax period. The Department shall not require the averaging of monthly values if that method has a de minimis effect on a taxpayer’s Arizona tax liability for the tax period. 1. Averaging of monthly values will generally be required 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 is 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 Subtotal $25,000 Subtotal $95,000 Total $120,000 The average monthly value of the taxpayer’s property includable in the property factor for the income year is $10,000 (120,000 divided by 12). 2. Rented property is averaged by determining the net annual rental rate of the property.