Saturday, February 07, 2009

Two Different Types of Property


Seems like we should have these cleared up for future purposes
While there are variations, these are pretty good definitions in most states.

RP - Real property

Real property is generally property that has been:

1. permanently
2. affixed
3. to other real property (like land and buildings) and
4. integrated into the value or use of that real property.

Factors that that are considered for item 4 include whether the additional property extends the life, or increases the value of the existing real property. One test that I've seen used, which is pretty good, is: if the building was purchased, would the new owner probably retain the addition, or would they probably tear it out?

TPP - Tangible personal property

Tangible personal property is property that is perceptible to the human senses (tangible), and is not real property. See above.

Note that, in general with lots of exceptions and variations, sales of real property are not taxable, but that sales of tangible personal property are, by default, taxable.

And then there's a third type of property: intangible personal property.

The Sales Tax Guy

See the disclaimer - this is for education only. Research these issues thoroughly before making decisions.

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