Which, If Any, of the Following Transactions Will Decrease a Taxing

question 22

Multiple Choice

Which, if any, of the following transactions will decrease a taxing jurisdiction's ad valorem tax revenue imposed on real estate?

• A) A tax holiday is granted to an out-of-state business that is searching for a new factory site.
• B) An abandoned church is converted to a restaurant.
• C) A public school is razed and turned into a city park.
• D) A local university sells a dormitory that will be converted for use as an apartment building.
• E) None of the above.

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Definitions:

Intragroup Transfer

Transactions between companies that are part of the same corporate group, such as the sale of goods or services, transfer of assets, or sharing of resources.

Inventories

Quantifiable goods or materials held by a company for the purpose of sale in the ordinary course of business, production, or use in creating goods and services.

Depreciable Asset

An asset that decreases in value over time due to use, wear and tear, or obsolescence and can be written off against income.

Useful Life

The estimated period over which an asset is expected to be usable by an entity, or the number of production or similar units expected to be obtained from the asset by an entity.