Community

Groundwater Use

TerryD — Mon, 21 Sep 2009 21:21:00 GMT

The Water Resources Department has initiated a public rulemaking process

related to the implementation of provisions in SB 788 for recording exempt

groundwater use with the Oregon Water Resources Department (OAR Chapter 690,

Division 190).

This is to notify you that the public comment period has been extended by

the Department to October 15, 2009 (by 5:00 pm). In addition, the

Department has scheduled public hearings on September 22nd in Salem,

September 29th in Pendleton and September 30th in Bend. Please note that at

each of the public hearings, and prior to the formal hearing, the Department

will provide time for an informal question and answer session to allow

people in attendance an opportunity to ask agency staff questions about the

proposed rules.

The draft rules and Notice of Open Comment Period and Rulemaking Hearing can

be found at http://www1.wrd.state.or.us/cgi-bin/notices.pl?oar_notices

2009 Stimulus Act

TerryD — Wed, 08 Jul 2009 00:08:00 GMT

Recently, I read an article relating to national commercial real estate conditions and the 2009
Stimulus Act. Many real estate owners and developers are negotiating with their lenders to modify
existing debt and the Recovery and Reinvestment Act of 2009 provides some beneficial tax relief.
With tight finance, increased vacancies, downward pressure on rents, owners are looking for relief.
The move to negotiate with lenders for debt relief, including forgiveness, has become a popular
means of capital preservation. However, debt restructuring can result in cancellation of debt
(COD) income for tax purposes, especially when the loan is reduced or the owner pays off the
loan at a discount. Most often, the cancellation is taxed as income at the borrower’s ordinary rate.
Let’s say an owner owes $500,000 on a mortgage and the lender agrees to reduce the principal to
$350,000. Unless there is an exception that applies, the owner will recognize $150,000 of ordinary
income.
The Stimulus Act gives owners an alternative. The new provision allows them to defer COD
resulting from 2009 and 2010 transactions until 2014. The owner must recognize 20% of the COD
in 2014, and in each of the next four years. The new alternative is simpler and has fewer
restrictions.
Applying this new rule to our example, if the principal of a $500,000 mortgage were reduced to
$350,000, instead of immediately paying tax on $150,000 of income, the owner can now defer the
income until 2014 and recognize $30,000 in each year from 2014 until 2018.
Secured and unsecured debts are eligible. Property value isn't considered. The basis of an owner's
property isn't reduced, and he continues to depreciate 100% of his original cost. The property
must be used in the owner's “trade or business”.
Many commercial property owners are now asking their lenders for debt relief. The 2009 Stimulus
Act alternative will allow them to restructure debt on their troubled assets without the punitive
tax consequence as before.
Information gathered from sources deemed reliable, but not guaranteed. It is recommended that
individuals check with all appropriate professionals for legal, accounting, and development advice
Curt Johnson, SIOR

In Case of An Emergency!

TerryD — Tue, 24 Mar 2009 22:18:00 GMT

Every homeowner should set up an emergency plan for their house hold. This plan should include a list of emergency shutoffs and other important items in the house to be aware of in case of an unexpected situation. You may need to find an expert to help locate, repair or maintain some of these shutoff valves and switches. Tag these items and take a tour with your family or anyone who may be at your home. Take the time to explain what these items do and how to operate the controls. Here is a basic list of some of the items to tag, for a more detailed information contact your local utilities, police and fire departments.

• Main electrical disconnect Furnace & Air main switch

• Water main valve or well shut off Emergency release for garage

• Water heater shut off door

• Any gas valves or mains Fire extinguishers

• Air conditioning disconnect Emergency toolbox

Provided by Craig Corrales National Property Inspections craignpi@earthlink.net

Jackson County

TerryD — Tue, 24 Mar 2009 22:09:00 GMT

JACKSON COUNTY INCLUDES 2,801 SQUARE MILES! The counties principal industries are lumber, agriculture, manufacturing, and recreation. Its major points of interest include the Shakespearean Festival, Historic Jacksonville, Southern Oregon University, the Peter Britt Festival, the Rogue River, and many parks. Rural land owners with small acreage (nine acres or less) make up 27% of the rural landownership in Jackson County. Those with 49 acres or less account for 70% of the rural landownership. The natural and cultural history of Jackson County is diverse and fascinating. The landscapes we see today were formed over millions of years by glacial ice migrations, massive floods and red-hot lava flows. The Native peoples, include the Modoc, Shasta and Rogue River tribes who lived in the region now defined by Jackson County. Did you know that acorns were used to produce flour used in bread, puddings and soup. Did you know that Jackson Counties Agricultural has grown to over a 60 million dollar industry and the first commercial orchards were planted in 1885. There are many hiking and riding trips you can take to enjoy the Southern Oregon region. ( information obtained from the Jackson Country Rural Living Handbook).

Watering Tip

TerryD — Tue, 24 Mar 2009 22:06:00 GMT

Landscaping and a healthy lawn impress buyers! Here is a guide to help you with your lawn.

LAWN SPRINKLING GUIDELINES (from the annual water quality report, Medford Water Commission):

This should be a handy reference. For their Lawn Watering Infoline call 541-774-2460

NON-ROTATING SPRINKLERS: ROTATING SPRINKLERS:

May/September: 44 min May/September 115

July/Early August 70 min July/Early August 175

Especially Hot Periods 80 min Especially Hot Periods 200

PROTECT YOUR SOIL WITH THESE PLANTS

TerryD — Tue, 24 Mar 2009 22:02:00 GMT

These plant species are commonly used by farmers in Jackson

County. An improved pasture will consist of a well balanced mixture

of grasses and legumes.

Grasses

• Orchard Grass is a highly productive grass suitable for hay or pasture

on well drained soils. It is not recommended in combination

with tall fescue.

• Tall Fescue is highly productive grass that grows well in a wide

variety of conditions.

• Perennial Ryegrass is a “cool season” grass used in pasture or hay production. It is

compatible with a wide variety of soil conditions.

Legumes

• Ladino White Clover is a long lived highly palatable perennial clover well adapted to

irrigated pasture production in southwestern Oregon.

• Birdsfoot Trefiol is a long-lived, deep rooted legume suitable for hay or pasture in areas

with drainage problems. It is very winter-hardy and tolerant of dry summer conditions.

• New Zealand Winter Clover is a long-lived perennial clover adapted to wet soils and

irrigated land. It is not tolerant of acidic soils.

Nutrient management, based on soil tests results, and irrigation water management are a

couple of easy steps that rural landowners can take to improve forage production on pastures

in Jackson County. Jackson Soil & Water Conservation District, USDA Natural Resource

Conservation, and Oregon State University Southern Oregon Research & Extension

Center are excellent sources of information about these management activities.

Commercial Real Estate

TerryD — Tue, 24 Mar 2009 21:44:00 GMT

I have been asked to comment on the state of the industrial real estate market, particularly noting any trends from 2008 to date

A review of Southern Oregon Multiple Listing Service data indicates that there are presently 23 offerings between 10,000 square feet and 50,000 square feet. The average time on market for those products is 218 days. Since early 2008, one transaction transpired and it is believed to be an acquisition by a junior lien holder protecting their interest. Therefore, there is not much market activity to report.

What is being seen with leasing activity is an increase in vacancy, which should be placing downward pressure on market rates. However, most brokers and property owners continue to quote rates in keeping with historical market conditions. Many potential tenants are asking for rates at half of the offering price. Presumably, negotiations settle somewhere between the ask and offer or a twenty-five percent rental rate reduction. What that does to reduce the overall value of the asset is the same, if not more. A rate reduction has an immediate impact to value of the asset and with current finance and investment markets in turmoil, capitalization rates are increasing in response to real estate risk. Not all that long ago, capitalization rates on high quality long-term letter of credit tenant were as low as 6 ½ to 7 percent. Many of those same assets are now in the market at 8 ¼ to 8 ¾ percent. That equates to a 20% mark down based on the same income stream. Coupled with rate reductions to the income stream, actual values can easily be written down 30%.

I am currently engaged in lease re-negotiations with tenants for property owners. Being keenly aware of these adverse conditions, I have encouraged my clients to be proactive in keeping their projects filled and viable…even if the means reducing rates in the interim. As much as I would like market conditions to be different, that is how I see commercial real estate in southern Oregon over the past year. With that said, what it may mean is that there may be real estate investment opportunities showing positive cash flow positions.

Curt Johnson, SIOR

Importance of Appreciation in Value of Agricultural Property to the IRS

TerryD — Thu, 24 Jan 2008 01:18:00 GMT

The value of farmland in American’s heartland has been appreciating in value even as the value of many other sectors of the real estate market have been declining in recent months. The fact that one’s farm property -- whether used for agriculture, livestock or horses -- is appreciating in value is of importance from an economic standpoint, and it helps one do battle with the IRS in the event of a hobby loss audit.

Under the hobby loss rule if you have losses in connection with any farming activity, whether horses, livestock or agriculture, the IRS may suspect that the activity is engaged in as a hobby rather than a business. Many farms have a history of losses, on and off.

This Factor is called “Expectation That Assets Will Appreciate in Value.” The term “profit” in IRS Regulations encompasses appreciation in the value of assets such as land and/or livestock used in the activity. The leading case on this point is Engdahl v. IRS. The taxpayer’s land appreciated from $83,l46 to $225,000 over a several-year period. The Tax Court held that this in itself was indicative of a profit motive. There are many similar rulings in Tax Court cases.

One important Tax Court case observed: “If losses, or even repeated losses, were the only criterion by which farming is to be judged a business, then a large proportion of the farms of the country would be outside the pale. It is the expectation of gain, and not gain itself which is one of the factors which enter into the determination of the question.”

The appreciation in value of farm property takes on importance particularly in situations where the taxpayer has been unable to show any profit years. Appreciation in value of your farm or ranch property can help prove that you have an honest expectation of making a profit despite a string of losses. The fact that a portion of your farm is used for a residence or other purposes does not preclude the IRS from considering overall appreciation in value.

This element can be crucial if you are audited by the IRS and cannot show any profit years in recent history. Appreciation in value of your farm or ranch property can help prove that you have an honest expectation of making a profit despite a string of losses.

Improvements such as barns, arenas, pastures, fencing, breeding sheds, stalls, storage facilities, irrigation, ponds, lighting, and landscaping all fall within the type of improvements likely to help increase the value of the land itself.

According to tax regulations, the appreciation in the value of the land used in the activity helps to explain a taxpayer’s willingness to continue the venture despite operating losses sustained during a number of years. It is strong evidence that the taxpayer conducted the activity with an honest and actual objective of making a profit.

However, sometimes (perhaps often) the IRS will argue that the farm property -- particularly in horse and other livestock ventures -- is not economically tied up with the land, so that any appreciation in value is largely irrelevant. This position of the IRS, if and when taken, is contrary to many Tax Court cases on the subject.

It is recommended that taxpayers get a formal appraisal of their property every couple of years to help substantiate the fact that their overall venture is doing well because, if the farm were sold, there would be a significant recoupment of past losses. In a formal appraisal, the appraiser should be able to say that the land is used exclusively for the venture, and that the highest and best usage of the land is that of a farm, whether it be a horse farm, cattle ranch, or agricultural activity.

You should also be able to prove that the land was purchased, maintained and improved with the expectation that it would appreciate in value, and that this increase would enhance the overall profitability of your venture.

To recap: If you are engaged in any type of farming venture, whether it be horses, livestock or agriculture, and if you sustain a significant period of losses that you utilize to offset your principal source of income -- it is important to show that you acquired the farm property with the expectation that it would appreciate in value. You should keep documentation to prove the improvements you made to the property. You should have periodic written appraisals of the property, and the appraisals should indicate that the activity is tied up with the land, that the highest and best use of the property is as a farm, whether horses, livestock or agriculture, as the case might be.

Contributed By: John Alan Cohan, Attorney at Law

John Alan Cohan is a lawyer who has served the horse industry since l98l. He serves clients in all 50 states, and can be reached at: (3l0) 278-0203 or via email at johnalancohan@aol.com

Tax Withholding Requirement for Sellers

TerryD — Thu, 27 Dec 2007 00:04:00 GMT

Warning on withholding of funds at closing

This is an update on the Oregon Law (HB2592) that will require an closing agent to withhold funds from seller’s proceeds at the closing of non-Oregon residents or those that will not remain an Oregon resident after closing. Most title companies will provide Oregon Department of Revenue forms, shortly after opening of escrow that must be returned in advance of closing by the seller. If they do not, the closing agency may retain up to 4% of the sales price of the home. If the ODR forms are returned, the withholding may be 4% of the seller’s proceeds. There are potential delays i f forms are not returned or if there is a lack of proceeds to cover the withholding. This information was provided by a title company.

Why use a Real Estate Agent

TerryD — Wed, 13 Jun 2007 00:13:00 GMT

Your Real Estate agent is your “Information Headquarters”. We are able to give you up-to-date information on what is happening in the marketplace and what conditions might affect your personal real estate goals.

A Real Estate agent is more than just a sales person! They act on your behalf as “your” agent, providing you with expert advice and guidance. They strive to make your home buying or selling experience more informed and less stressful.

If you are buying a home, an agent can assist you in the selection process by researching the market and showing you only those homes that meet your specific needs as well as providing you objective information about each property. Once you have settled on your “Perfect Home”, they will help you negotiate the purchase of that home, optimally saving you both time and money. A Real Estate agent will help guide you through the entire closing process and make sure things flow together as smoothly as possible until the front door keys are in your hand.

If you are selling your home, a real estate agent will research both the current market conditions and your home selling goals. They balance how quickly you want to sell your home with the market conditions and present you with the optimal price to list your home at. Your agent will handle all of the advertising of your home to both other agents and the public. We know when, where, and how to advertise your property to obtain the best results. Here at Oregon Opportunities we advertise properties on as many as 20 different websites depending on the property type, as well as many different print ad publications. We do what it takes to get a buyer to your front door and then make it their front door.

In short your Oregon Opportunities team of Real Estate agents with their years of combined experience will be on “Your Side” from beginning to Closing.

Staging Your Home For Sale

TerryD — Wed, 30 May 2007 21:06:00 GMT

Staging a house for sale is a concept foreign to many home sellers. But it has been immensely popular in the San Francisco Bay area where sellers have reaped huge benefits from their efforts. In a recent Inman News article, they said the sellers don't have to fix up their home before selling if the home is priced right. There are basically two reasons why sellers should prepare their home for sale, a sales price closer to the listed price and a quicker sale. A few quick and easy cosmetic improvements ideas that can really make a difference: remove old window coverings and leave them off, remove some furniture, change out olders light fixtures, paint outdated cabinets and change cabinet knobs, and even think about painting the walls a trendy decorator color. The goal of fixing up a ahouse for sale is to get it into move-in ready condition. Fixer-uppers appeal only to certain buyers who usually want a break on the price to compensate for the condition of the property. By sprucing the property up for sale, you appeal to a much broader audience.

Welcome to Oregon Opportunities Blogs

admin — Tue, 27 Feb 2007 11:33:00 GMT

A weblog (blog) is an online journal to share updates, ideas, project status, or anything else you want. Blogs allow everyone to be a contributor rather than just a bystander.

Postings are arranged chronologically and can be categorized depending upon how the administrator has configured the system. You can view a post by clicking on the title from the home page where all users' posts are collectively shown. Once viewing a blog you can read other posts by that person or provide comments on postings.

Creating new posts is quick and easy. If you have the ability to post you should see a link (usually on the left) on your weblog's home page: new post. Clicking on this link takes you into your blogs administration pages for creating new posts.