Discussion Question 1-9 Conversion of Tax-Exempt Realty to Commercial Status and

Question

Discussion Question 1-9 Conversion of Tax-Exempt Realty to Commercial Status and Effect on Ad (LO. 4) The Adams Independent School District wants to sell a parcel of unimproved land that it does not need. Its three best offers are as follows: from the State's Department of Public Safety (DPS), $2.3 million; from the Second Baptist Church, $2.2 million; and from Baker Motors, $2.1 million. DPS would use the property for a new state highway patrol barracks; Second Baptist would start a church school; and Baker would open a car dealership. If you are the financial adviser for the school district, which offer would you prefer? Select "Yes or No", whichever is applicable. a. Baker Motors. Commercial properties (for example, car dealerships) are often subject to higher property tax rates, including the school district's ad valorem tax. SelectYesNo b. DPS. State-owned properties are often subject to higher property tax rates, including the school district's ad valorem tax. SelectYesNo c. Second Baptist Church. The church would be subject to the same tax rates as the school district. Therefore, the school district would receive the same amount of its ad valorem tax as it does currently. SelectYesNo

Explanation / Answer

yes no yes yes

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