Current through Register Vol. 63, No. 3, March 1, 2024
(1)
Purchase of a Nursing Home:
(a) New Facility
-- The depreciation basis of a new facility must be the historical cost of
building the facility, including preparation for use, or the purchase price
from an unrelated organization not to exceed the fair market value, including
preparation for use, less salvage value;
(b) Ongoing Facility -- The depreciation
basis of the purchase of an ongoing facility from an unrelated organization is
limited to the lower of the following:
(A)
The allowable acquisition cost of such asset to the first owner of record on or
after July 18, 1984; or
(B) The
acquisition cost of such asset to the new owner.
(c) To properly provide for costs or
valuations of fixed assets, an appraisal by an appraisal expert will be
required if the provider has no historical cost records, or has incomplete
records of depreciable fixed assets, or purchases a facility without
designation of purchase price for the classification of assets acquired. The
appraisal is subject to the approval of the Department. In any case, the
Department may require such an appraisal to establish the fair market value of
the provider assets;
(d) If the
purchase is from a related organization, the cost basis is the lower of the
cost basis of the related organization or the cost basis as determined in
subsections (b) and (c) of this section, less depreciation as determined by the
provisions of these rules.
(2) The depreciation basis of other assets
must be the historical cost to the provider from an unrelated organization plus
set-up costs, less salvage value. In the case of a trade-in, the historical
cost will consist of the sum of the book value of the trade-in plus the cash
paid. In a case where the asset is purchased from a related organization, the
depreciation basis must not exceed the asset's book value to the related
organization as determined under the provisions of this guide.
(3) The depreciation basis of donated assets,
defined as an asset acquired without making any payment for it in the form of
cash, property, or services, must be the lessor of:
(a) Fair market value at the date of donation
adequately documented in the provider's records or by appraisal by an appraisal
expert, less salvage value; or
(b)
If from a related organization, the depreciation basis must be the lesser of:
(A) Fair market value; or
(B) The depreciation basis the related party
had or would have had for the asset under the program.
Stat. Auth.: ORS
410.070
Stats. Implemented: ORS
410.070
