CCH Tax Day Report
For Ohio property tax purposes, the sale of a property, which a taxpayer acquired from his brother acting as a pension fund trustee, was based on an arm’s length transaction because the sale price was negotiated on the basis of an appraisal report and exceeded the appraised market value. Generally, a certified appraisal report can be used to show that the purchase price in a sale between related parties reflects the fair market value. In this case, the taxpayer met his burden of proof by submitting a certified appraisal report that valued the property two months before the sale. The county failed to provide any evidence that the taxpayer shared his brother’s interest in reducing the pension fund’s losses, nor did the county challenge the brother’s testimony that the parties negotiated the sale price on the basis of the appraisal report and agreed on a price that exceeded the appraised market value. Accordingly, the sale was considered an arm’s length transaction which reflected the fair market value. In addition, by not raising them before the Board of Tax Appeals (BTA), the county waived arguments that the sale lacked recency for purposes of the arm’s length transaction finding and that remand to the BTA was required because the county had an appraisal that should have been considered.
Emerson v. Erie Cty. Bd. of Revision, Ohio Supreme Court, 2014-1794, March 14, 2017, ¶404-601