Agenda Packets - 1998/03/02 - Laserfiche WebLink

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SILVERVIEW ESTATES GENERAL PARTNERSHIP SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROJECTION ASSUMPTIONS FOR THE PERIOD COMMENCING JANUARY 1, 1998 Ilk AND ENDING DECEMBER 31, 2012 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Property and Depreciation Property and equipment are capitalized for income tax purposes . Maintenance and repairs are charged to expense. The combined property' s Construction Costs are $7 , 133,585 . Finance, closing costs and other organization forecastedare atprojeted$686c000 ,at $257 ,000 . Capitalized land improvementsare The allocation between land, buildings and personal property is estimated as shown below. COMBINED PROJECTS Life Cost $ 879 , 000 Land Improvements Land 15 . 0 years 686 ,000 Building 27 .5 years 6 , 145,585 7 . 0 years 109 ,000 Personal Property. 30 . 0 years 222, 000 Finance Costs Organization Costs 5 . 0 years 35, 000 4101Under the Internal Revenue Code, a partnership may recover the cost of depreciable real property under the Modified Accelerated Cost Recovery System (MACRS) . Under MACRS, depreciable residential real property placed in service after December 31, 1986 may be depreciated over a 27 . 5-year period using the straight-line method. The Code provides that depreciation of residential real property over a 27 . 5-year period and commercial real property over a 39 year period is subject to adjustment upon audit by the Service . However, the Servicemy challenge the allocation of the cost between real property, personal property, and land. A successfulwouldaffect challenge timingsrtneand ramount of la for depreciation claimed Partner' s taxable income or loss . Depreciation of personal property placed in service after December 31, 1986 is computed over, a seven-year recovery period using the 200% declining balance method, switching to the straight-line method to maximize the deduction. that Ih shouldt ion dallowed understates state law may beadopted substantR and be ally lower the deprecia than the amounts reflected in the projection. SUMMARY OF SIGNIFICANT PROJECTION ASSUMPTIONS The accompanying financial projection assumptions f20o2 the bapedid iso lI commencing January 1, 1998 and ending December 31, information provided by the General Partner of the Partnership. The projection is presented on the tax basis of accounting. Accrual accounting methods have been used in preparing the projections . ( 3)