What Is Property Inventory?
Property Inventory is a written tally of all of a taxpayer's personal property. This inventory will also denote how much was paid for each item and when, along with each item's current market value. Property inventories are generally used by taxpayers to calculate gain or loss on sale of property, as well as to report losses of property to insurance companies.
Understanding Property Inventory
Property inventory is often called Real Property Inventory or RPI for short. When property inventories become too large for one person to manage on their own, a software program or third-party property asset manager may be utilized to track and maintain the property inventory. However, individuals can also initiate and track their own property inventory in an informal or more formal way with their own structures. Property inventories can be especially helpful to track assets, losses, costs, and information over a period of time for analysis.
Property Inventory is something that every taxpayer would be wise to keep in order to facilitate tax and insurance reporting. This inventory should be updated periodically and kept in a safe place, such as a bank deposit box. Keeping an online inventory is also a convenient way to track one's property inventory. Property inventories should include important updates such as if items or structures need to be repaired on the property, what updates need to be made, and what assets or losses the property holds. For example, if there was damage to the property or outbuildings, that would need to be noted as part of the overall value of the property.
Example of Property Inventory
Property that is part of a property inventory or RPI could include land and anything that is permanently affixed to that land, such as buildings, installed systems within those building, any systems within the land itself, such as irrigation or canals, and building equipment. Property inventory can also include roads, parking facilities, fences, utility systems, or structures.
If a property inventory is being managed by an outside organization or assets management team, they will track property information as part of a database and include identifying details such as the property name, address, book value, classification codes as applicable, and descriptions along with future outlook predictions, such as building replacement estimates, projected update costs, and a list of any critical repairs that need to be done by priority level. If the property inventory contains federal property, they must also adhere to General Service Administration Federal Management Regulation.