A Nevada county assessor has determined that a newly constructed commercial building has a replacement cost of $1,200,000, with accumulated depreciation of $200,000, and the underlying land has a full cash value of $300,000. A real estate investor asks her Nevada-licensed broker what the property's assessed value will be for tax purposes. Which of the following correctly states the assessed value?
Correct Answer
A) $420,000
Step 1 — Determine taxable value: Under NRS 361.227, taxable value = (Replacement cost of improvements − Depreciation) + Full cash value of land = ($1,200,000 − $200,000) + $300,000 = $1,000,000 + $300,000 = $1,300,000. Step 2 — Apply the 35% assessment ratio: Assessed value = $1,300,000 × 35% = $455,000. Wait — this yields $455,000, which is option C. Let me recheck the numbers: ($1,200,000 − $200,000) = $1,000,000 improvements; $1,000,000 + $300,000 land = $1,300,000 taxable value; $1,300,000 × 0.35 = $455,000. The correct answer is C ($455,000).
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