The Trainer
APPEALING PROPERTY TAX ASSESSMENT; HANDLING CHILD-CARE EXPENSES
In this month's feature, we discussed how to hire a tax appeal consultant to challenge your site's property tax assessment. Appealing a tax assessment helps you comply with HUD rules, and if you win, you can save your site a considerable amount of money. HUD recognizes that assisted sites are often overvalued, so HUD requires you to review each tax assessment and, if appropriate, file an appeal.
In our article about income calculations, we focused on how to handle a resident's child-care expenses in special circumstances. Child-care expenses are deducted from household income up to the amount of the member's earned income, but part-time work and student status can make calculating the allowance tricky.
TRAINER'S QUIZ
INSTRUCTIONS: Each of the questions below has only one correct answer. On a separate sheet of paper, write down the number of each question, followed by the answer you have chosen—for example, (1) b, (2) a, and so on. The correct answers (with explanations) follow the quiz. Good luck!
QUESTION #1
Filing a tax assessment appeal is a prerequisite for getting HUD's approval for a rent increase to cover a tax hike. True or false?
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True.
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False.
QUESTION #2
Which qualification is most important to look for in a tax appeal consultant?
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J.D.
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MAI.
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MFA.
QUESTION #3
If you end up suing the local tax authority to get your assessment reduced, you should never hire the law firm recommended by your tax appeal consultant. True or false?
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True.
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False.
QUESTION #4
Jane Jones has a 5-year-old son. She pays for 45 hours of child care at the rate of $10 per hour, for a total of $450 per week. Of the 45 hours, 35 hours of child care allow Jane to work at her job, where she makes $350 a week. And 10 hours of child care allow Jane to attend nursing school classes. What is Jane's total child-care allowance?
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$450.
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$350.
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$400.
QUESTION #5
Jim Smith lives with his mother, who isn't employed, and his 3-year-old son. Jim pays for child care while he works as a gas station attendant. Is the household entitled to a child-care allowance?
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Yes.
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No.
QUESTION #6
Sally Green is a full-time student with a 4-year-old daughter. She pays $100 a week for child care while she attends classes for 46 weeks of the year. She pays another $50 per week for child care so that she can work part time for all 52 weeks of the year. She earns only $100 per week. Sally isn't the household head, co-head, or spouse. How much of her child-care expenses can be included in the household's child-care allowance?
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$5,080.
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$4,600.
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$7,000.
ANSWERS & EXPLANATIONS
QUESTION #1
Correct answer: a.
According Handbook 4350.1, paragraph 23-5, HUD won't approve a rent increase to cover a tax hike unless you've appealed the assessment.
QUESTION #2
Correct answer: b.
An MAI indicates that the consultant is certified as a “member of appraisal institute” by the American Institute of Real Estate Appraisers.
QUESTION #3
Correct answer: b.
If the tax appeal consultant has a longstanding relationship with a law firm, that firm may be in the best position to represent you since the firm advises the consultant on legal issues and helps the consultant put its case together. But you should ask about the law firm's fees, its track record in winning cases, and whether it has been involved in any misconduct, before agreeing to hire it.
QUESTION #4
Correct answer: a.
Jane's work-related child-care expenses equal $350 (35 hours x $10), and her school-related child-care expenses are $100 (10 hours x $10). Since her child-care expenses are capped at the amount of money she earns a week, her total child-care allowance is $450 per week.
QUESTION #5
Correct answer: a.
HUD says you may not assume that a household member like Jim's mother is available or capable of providing child care; only the household can determine that. So Jim is entitled to an allowance for his child-care expenses while he is at work.
QUESTION #6
Correct answer: a
The $100 per week Sally pays for child care during the 46 weeks per year that she attends school adds up to a total annual expense of $4,600 ($100 x 46 weeks). This amount can be included in full in the household's child-care allowance. The $50 per week she pays for child care during the 52 weeks per year that she works amounts to $2,600 ($50 x 52 weeks). This amount can't be included in full in the household's child-care allowance, because it exceeds the $480-per-year cap on work-related child-care expenses for full-time students. Therefore, the household's child-care allowance is $5,080 ($4,600 + $480).