The URL can be used to link to this page

Home My WebLink About5.F.9. Burmahi Land Donation Tax CITY OF SHAKOPEE Cr; r n Memorandums TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Burmahi Land Donation Tax DATE: June 5, 2012 Introduction: The Council is asked to authorize payment of base -level property taxes payable for the year 2012 for a 3.25 acre parcel of land set for donation by Burmahi, Inc. Background: For the past several months, the Council has been kept apprised of a potential of 3.25 acres of land, comprised of three parcels north of First Avenue and east of the motel on Bluff Avenue. The donation is being made by Burmahi, Inc. The Council has previously authorized closing work to take place. A Donation Agreement has been negotiated, and the closing on the parcel is set for the later part of the week of June 4 In discussing the Donation Agreement, the donors have asked for consideration by the City to pay all of property taxes for taxes payable 2012. Typically, when a land sale takes place, the seller is responsible for the prorated part of the taxes up to the date of sale, and the sales price reflects that cost; the buyer accepts the tax payment for the time after that. In this case, as a donation, there is no exchange of money. In consideration of this and the overall value of the donation, the donor has asked that that the City pay all of the taxes payable for 2012. Note that this would be for the taxes payable for 2012 only. The donor would be responsible for any delinquent taxes or interest owed. Budget Impact: Taxes payable for the three parcels combined were $18,320, or $1,527 per month. Under the typical scenario, the donor would have been responsible for approximately $7,633, the City approximately $10,687. If agreeable to the Council, the City would pay the additional $7,633, although the City will receive back its normal prorated 30% share of the property taxes of what is paid. If acceptable to the Council, the recommended source of funding for all property taxes would be from the General Find unallocated line item. There is approximately $50,000 available in that. Assuming the land transfer is completed by June 30, 2012, the property will become tax exempt on January 1, 2013. Recommendation: In consideration of the donation of the parcel to the City, I recommend that the City Council authorize payment of the 2012 base taxes levied on the 3.25 acre parcel being donated by Burmahi, Inc. Relationship to Visioning: This supports Goal D. Action Required: If the Council concurs, it should, by motion, authorize payment of the base level property taxes payable in 2012 for Lots 2, 3 and 4, Block 1, Halo 2 Addition, Shakopee, Minnesota, at the time of closing of the donation of said land to the City. 4jUS Mark McNeill City Administrator �� LAWRENCE PaxxHURST, P.A. \ � Certifzed Public Accountants and Business Advisers 1055 East Wayr.ata Boulevard • Suite 305 • Wayzata,MN 5539� 95�•475•997� ' 95�•475•��74 FAx www.parkhurstcpa.com Februazy 21, 2013 City of Shakopee Mark McNeill 129 Holmes Street S Shakopee, MN 55379 RE: Burdette Stief Land Donation Dear Mark: Enclosed are five copies of form 8283 in regards to Burdette Stief's Land Donation. Could you please sign all five copies, keep the copy that is stamped client copy for your records and return the remaining four signed copies to us in the enclosed postage paid envelope. We appreciate your assistance with this matter. If you have any questions feel free to contact me at 952-475-9970 or via email at lparkhurst@parkhurstcpa.com. Sincerely, LL.CtiLf/h� Lawrence Parkhurst,PA C2t850 02l21I2013 9:19 AM �� . � h � � � � , Form $283 � ,� Noncash Charitable Contributions ,��;� OMB No.1545-0908 �Ra� �a�embar zoiz> ► Attach to your tax return if you claimed a total deduction DapaRment of the Treasury of over 5500 for all contributed property. Atlachment Intemal Revenue Service ►Information about Form 8283 and its se arate instructions is at www.irs. ov/form8283. saq�e��a Na. 155 Name(s) shown on your income tax ratum Identifying number BURMAHI INC. 41-0912246 Note. Figure the amount of your contribution deduction before completinq this form.See your tax return instructions. Section A. Donated Property of$5,000 or Less and Certain Publicly Traded Securities—List in this section only items (or groups of similar items) for which you claimed a deduction of$5,000 or less. Also, list certain publicly traded securities even if the deduction is more than $5,000 (see instructions). il��tt I `'' Information on Donated Pro e —If ou need more s ace attach a statement. (b)If donated property is a vehicle(see instructions), (c)Descri tion of donated ro ert (a)Name and address ot the P P P Y � donee organ¢ation check the box. Also enter the vehicle identification (For a donated vehicte,enter tha yaer,make,madel,condilion,and number unlass Form 1098-C is attached milea e,unless Form 1098-C is attached. A B C D E Note. If the amount ou claimed as a deduction for an item is$500 or less, ou do not have to com lete columns e , ,and (d)Date of the (e)Date acquired �f)How acquirad (g)DonoYa cost (h)Feir markel value (I)Method usetl to dalarmine contnbulion by donor(mo.,yr.) by donor or adJusted basis (see instructions) the fair market value A B C D E p�1'� I� !; Partial Interests and Restricted Use Property—Complete lines 2a through 2e if you gave less than an entire interest in a property listed in Part I. Complete lines 3a through 3c if conditions were placed on a contribution listed in Part I; also attach the required statement (see instructions). 2a Enter the letter from Part I that identifies the property for which you gave less than an entire interest ► If Part I� applies to more than one property,attach a separate statement. b Total amount c�aimed as a deduction for the property listed in Part I: (1) For this tax year ► (2) For any prior tax years ► c Name and address of each organization to which any such contribution was made in a prior year(complete only if different from the donee organization above): Name of chantable organization(donee) Address(numbar,street,and room or suile no.) City or town,state,and ZIP code d For tangible property,enter the place where the property is located or kept► e Name of any person,other than the donee organization,having actual possession of the property► 3a Is there a restriction,either temporary or permanent,on the donee's right to use or dispose of the donated Yes No property? __ _. _ . b Did you give to anyone(other than the donee organization or another organization participating with the donee ` organization in cooperative fundraising)the right to the income from the donated property or to the possession of the properry,including the right to vote donated securities,to acquire the property by purchase or otherwise,or to designate the person having such income,possession,or right to acquire?,. c Is there a restriction limitin the donated ro e for a articular use7 .. _ For Paperwork Reduction Act Notice,see separate instructions. Forrr,8283�Re� iz-zo�z� DAA 02650 02/21/2013 9�.16 AM ,Fcrrr�8?�93 Rev. 12-2012 Pa e 2 Name(s)shown on your income tax retum Identifying number BURMAHI INC. 41-0912246 Section B. Donated Property Over$5,000 (Except Certain Publicly Traded Securities��ist in this section oniy items(or groups of similar items)for which you claimed a deduction of more than$5,000 per item or group(except contributions of certain publicly traded securities reported in Section A).An appraisal is generally required for property listed in Section B(see instructions) ;Part I ::> information on Donated Property—To be completed by the taxpayer and/or the appraiser 4 Check the box that describes the type of property donated: a Art"(contribution of$20,000 or more) b Qualified Conservation Contribution c � Equipment d Art*(contribution of less than$20,000) e X Other Real Estate f n Securities g Collectibles" h Intellectual Property i U Vehicles j Other 'Art includes paintings,sculptures,watercolors,pnnts,drawings,ceramics,antiques,decorative arts,textiles,carpets,silver,rare manuscnpts,histoncal memorabilia,and other simllar objects. "Collectibles include coins,stamps,books,gems,jewelry,sports memorabilia,dolls,etc.,but not art as defined above. Note. In certain cases,you must attach a qualified appraisal of the property.See instructions. 5 (a)Descriptlon ol donated property(if you naed (b�It tangible property was donated,9ive a brief summary of Ihe overall (c)Appreised fai� mora space,attach a separete statement) physical conditqn Of the propeRy al�he time o(lhe gift market velue A VACATSD LAND-1ST AVENUS EAST SHAKOPBE MN SATISFACTORY 970,000 B C D (d)Date acquired (e)How ecquired by donor (�Donofs cost or (g)For bargain sales,enter See instructions by donor(mo.,yr.) adjusted basis emount received �h)Amount claimed as a (i)Average trading pnce detluclion of secuntiea A O1 Ol 93 PURCHASE 250, 015 B C D !;;:i:i�!�Itt<:I�>:':!!':: Taxpayer(Donor) Statement— List each item included in Part I above that the appraisal identifies as having a value of$500 or less. See instructions. I declare that the following item(s)included in Part I above has to the best of my knowledge and belief an appraised value of not more than$500(per item). Enter identifying letter from Part I and describe the specific item.See instructions.► Signature of taxpayer(donor)► Date► 'p�i'C Itl;:i; Declaration of Appraiser I declare that I am not the donor,the donee,a party to the transaction in which the donor acquired the propeRy,employed by,or related to any of the foregoing persons,or married to any person who is related to any of the foregoing persons.And,if regularly used by the donor,donee,or party to the transaction,I performed the majority of my appraisals during my tax year for other persons. Also,I declare that I perform appraisals on a regular basis;and that because of my qualifications as described in the appraisal,I am qualified to make appraisals of the type oi property being valued.I certify that the appraisal fees were not based on a percentage of the appraised property value.Furthermore,I understand that a false or fraudulent overstatement of the property value as described in the qualified appraisal or this Form 8283 may subject me to the penalty under section 6701(a)(aiding and abetting the understatement of tax liability).In addition,I understand that I may be subject to a penalty under section 6695A if I know,or reasonably should know,that my appraisal is to be used in connection with a return or claim for refund and a substantial or gross valuatio�misstatement results from my appraisal.I affirm that I have not been barred from presenting evidence or testimony by the Office of Professional Responsibility. Sign Here Signature� Title� Date� Business address(including room or suite no.) Identifying number 3144 HENNEPIN AVENUE STE 202 City or town,state,and ZIP code MINNEAPOLIS MN 55408 I��rt IV Donee Acknowledgment—To be completed by the charitable orqanization This charitable organization acknowledges that it is a qualified organization under section 170(c)and that it received the donated property as described in Section B, Part I,above on the following date► Furthermore,this organization affirms that in the event it sells,exchanges,or otherwise disposes of the property described in Section B,Part I(or any portion thereo�within 3 years after the date of receipt,it will file Form 8282,Donee Information Return,with the IRS and give the donor a copy of that form.This acknowledgment does not represent agreement with the claimed fair market value. Does the or anization intend to use the ro e for an unrelated use? ► Yes No Name of chantable organlzation(donee) Employer identification num ber CITY OF SHAKOPEE Addrass(number,street,and room or suite no.) City or town,state,end ZIP wde 129 HOLMES STREET SOUTH SHAKOPEE MN 55379 Authonzed signalure � �� / Title n ��L'.�-- �,�� ,,��1•�� C'_I I 4' �" 0�� Date 1J /U ��lC � ( .� DAA Fortn 82 3(Rev.12-2012)