Replies to This Discussion

Permalink Reply by Dan on June 17, 2012 at 11:12am

The trouble with Ohio CAUV is each county Auditor is free to interpret the rules as they see fit. 88 counties and each may do something different. Ohio needs to clean this up and have one set of guidelines to follow. The Trumbull county Auditor may interpret the law one way and the Ashtabula guy another. I would think you might lose the CAUV on the pad area.

Permalink Reply by Steven Kacerski on June 18, 2012 at 6:51am

Brynmore,

Dan hit the nail on the head with his explanation.  I have been at several seminars this year and the speakers all said the same thing.  Like Dan said, it all depends on how the county auditor interprets what qualifies for CAUV treatment.  They may not change anything if the majority of the activity from the land still relates to farming, they may decide to only reassess a portion of the property (ex. pad area) or an extreme case may be they would not allow CAUV for the entire property.  I'm a CPA and have seen a lot of strange tax law and interpretations over the years, so the last example would not surprise. Just like Kasich wants to "raise revenue" by increasing the oil & gas tax rates, I'm sure the local politicians want a piece of the oil & gas pie as well.  I would recommend having a provision in the lease that would require the oil & gas company to reimburse the landowner for the difference in real estate taxes in case a property loses its CAUV value.

Permalink Reply by Bill Simpson on June 18, 2012 at 10:48am

Steve...

Based on your background and experience what approximate tax percentage does the normal 8-5 person pay on a signing bonus?

I have heard that it is 40% and then I have heard it is what tax bracket you are in. Since I am in a approx 33% tax bracket the bonus would be taxed at 33%.

Your thoughts or opinion if you are allowed to comment or share info.

Thx

Permalink Reply by Steven Kacerski on June 18, 2012 at 4:00pm

Bill,

Yes, it does depend on the Federal and state tax bracket you are in.  Worst case scenario is 41%.  35% Federal and 6% for Ohio.  I have been working with clients doing tax projections factoring in various tax planning scenarios based on their overall tax and financial situation so they have an estimate of the federal and state taxes due so they know how much money to set aside for taxes.  I'm also a farmer and signed a lease this year for my property, so everything I'm working on with clients are things I'm doing for my situation as well.  If you have any specific questions or if I can help, please feel free to contact me. 

 

Steve Kacerski, CPA

Packer Thomas

330-533-9777

Permalink Reply by Teri on June 18, 2012 at 11:01am

I am in Columbiana county and in our situation, a well pad area ( 7 acres ), not only would we loose CAUV, the land would be taxed as commercial.  It is a huge difference.  Some leases allow for payment of this tax by the developer, others do not.

Please do your homework folks.  Call your courthouse. Call a qualified attorney.  Call your accountant.