Phone: 630.549.6646
Email: Steve@StevenIvy.com
Taxation Issues
...Deferring & Reducing Property Taxes
Reducing Property Taxes
STEVEN IVY P.C. specializes in reducing taxes for both commercial and residential real estate properties. The property tax is the largest single tax in Illinois, and is a major source of tax revenue for local government taxing districts. Only real property is taxed in Illinois. The property tax is a local tax imposed by local government taxing districts (school districts, municipalities, counties) and administered by local officials (township assessors, chief county assessment officers, local boards of review, county collectors). If you believe that your property was overvalued by the county assessor, resulting in high property taxes, our law firm can help you appeal the assessment.
Illinois Property Tax Cycle
The property tax cycle is a two-year cycle. During the first year, a property is assigned a value that reflects its value as of January 1 of that year. During the second year, the tax bills are calculated and mailed and payments are distributed to local taxing districts. This two-year cycle can be divided into six steps.
1) Assessment: Local assessing officials determine most property values; the local county board of review and the Illinois Department of Revenue also have some assessment responsibilities. The chief county assessment officer ensures that assessment levels are uniform and at the legal assessment level by applying a uniform percentage increase or decrease to all assessments in the jurisdiction.
2) Review of assessment decisions: County boards of review determine whether local assessing officials have calculated assessed values correctly. Property owners and local taxing districts may appeal unfair assessments to their local county boards of review and, if the owner is dissatisfied with the board’s decision, the State Property Tax Appeal Board or circuit court.
3) State equalization: The Illinois Department of Revenue equalizes assessments among counties and issues a state equalization factor for each county.
4) Levy: Taxing districts determine the amount of revenues that they need to raise from property taxes, hold any required public Truth-in-Taxation hearings, and certify levies to the county clerk.
5) Extension: The county clerk applies the state equalization factor, calculates the tax rate needed to produce the amount of revenues each taxing district may levy legally, apportions the levy among the properties in a taxing district according to their equalized assessed values so that tax bills can be computed, abates taxes as directed by taxing districts, and prepares books for the county collector.
6) Collection and distribution: The county collector prepares tax bills, receives property tax payments from property owners, distributes taxes to the local government taxing districts who levied them, and administers sales of liens on real estate parcels due to nonpayment of taxes.
Personal Service
The hallmark of our practice is personal service. We work closely with our clients to ensure that their interests are properly protected. STEVEN IVY P.C. is servicing clients in several Illinois counties, including: Cook County, Lake County, DuPage County, Kane County, DeKalb County, Will County, McHenry County and Kendall County. Our clients can meet with us in eight Illinois locations, including: Chicago, Lisle, Northbrook, Oak Brook, Rosemont, Saint Charles, Schaumburg, and Warrenville.
Determining Fairness of Assessment
To determine if a property was assessed fairly, the property owner must know the property’s fair market value, assessed value, and the average percentage of market value at which similar neighboring properties are assessed (i.e., the assessment level). The assessment may be unfair if the property’s assessed value is: 1) not 331/3 percent of its fair market value; not in Cook County (has a classification system); 2) not at the same level as comparable properties in the area; 3) based on inaccurate information, such as an incorrect measurement of a lot or building.
Appealing Tax Assessments in Illinois
Two options are available if the property owner disagrees with the county board of review’s decision, but only one option can be chosen. 1) The decision may be appealed (in writing) to the Property Tax Appeal Board, a five-member board appointed by the governor. The Property Tax Appeal Board will determine the correct assessment based on equity and the weight of the evidence. Taxes must be paid pending the outcome of the appeal; 2) The taxes can be paid under protest and the county board of review’s decision can be appealed directly to the circuit court by filing a tax objection complaint. Taxes and levies are presumed to be correct and legal, but this presumption can be rebutted. The taxpayer must provide clear and convincing evidence.
Real Estate
Tax Deferred Exchange 1031
STEVEN IVY P.C. helps clients take advantage of 1031 tax deferred exchange strategies. We work with development companies, landlords and individual inventors. The 1031 exchange may significantly improve your financial position. Taking its name from Section 1031 of the Internal Revenue Code, a tax-deferred exchange allows a taxpayer to sell investment or business property and replace it with a like-kind property. Capital gains on the sale of this property are deferred or postponed as long as the IRS rules are followed. In theory, an investor could continue deferring capital gains on investment property until death, potentially avoiding them all together. In fact, the 1031 Exchange has been cited as the most powerful wealth building tool still available to taxpayers.