1. (1) As a general rule the average value of property owned by the taxpayer shall be determined by averaging the values at the beginning and ending of the tax period. However, the Commissioner of Revenue may require or allow averaging by monthly values if such method of averaging is required to properly reflect the average value of the taxpayer’s property for the tax period.
2. (2) Averaging by monthly values will generally be applied if substantial fluctuations in the values of the property exist during the tax period or where property is acquired after the beginning of the tax period or disposed of before the end of the tax period. Example: The monthly value of the taxpayer’s property was as follows: January .................................................................................……………… $2,000 February ...............................................................................……………… 2,000 March ...................................................................................……………… 3,000 April .....................................................................................……………… 3,500 May ......................................................................................……………… 4,500 June ......................................................................................……………… 10,000 $25,000 July ......................................................................................……………… 15,000 August ..................................................................................…………….. 17,000 September..............................................................................……………. 23,000 October..................................................................................……………. 25,500 November..............................................................................……………. 13,000 December .............................................................................……………. 2,000 $95,000 TOTAL $120,000 The average value of the taxpayer’s property includable in the property factor for the income year is determined as follows: $120,000 ÷ 12 = $10,000
3. (3) Averaging with respect to rented property is achieved automatically by the method of determining the net annual rental rate of such property as set forth in Rule 1320-06-01-.28 (b).

Authority: T.C.A. §§ 67-101(2), 67-1-102, and 67-4-2012. Administrative History: Original rule certified June 7, 1974. Repealed and refiled July 22, 1977; effective August 22, 1977. Amendments filed June 28, 2016; effective September 26, 2016.