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Respondent also determined, for both offers, petitioner’s
equity in assets, on the basis of petitioner’s submitted
information, statements from third parties, and a review of
public records. Respondent determined the value of petitioner’s
home to be $342,096 for the first offer, on the basis of a
valuation by the Broward County Property Appraiser. For the
second offer, respondent determined the value of petitioner’s
home had increased to at least $610,000, because a similar home
with a tax assessment lower than petitioner’s home had sold for
that much in the same development. The combination of
petitioner’s equity and earnings multiple resulted in a
determination that petitioner’s reasonable collection potential
(RCP) exceeded both the amount of the offer and the outstanding
tax liability for both offers.5
5 The calculations can be summarized as follows:
First Offer Second Offer
Equity in home1 $20,688 $41,746
IRA 2,000 1,809
Cash on hand 5,738
Net value of assets 22,688 49,293
Monthly income $1,400 $3,108
Less: Expenses (433) (2,423)
Disposable income 967 685
Multiple x 48 x 48
Value of income 46,416 32,880
Reasonable collection 69,104 82,173
Tax liability 26,266 38,165
OIC 16,209 2,200
1 Value based on 50 percent ownership for first offer and 25
percent ownership for second offer.
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Last modified: May 25, 2011