50 IAC 29-3-7 True tax value and zero or negative assessments

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