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(506) 2223-1327                        Published Monday, Nov. 19, 2012, in Vol. 12, No. 230                          Email us
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                Rica real estate


Shaky valuation method to cost expats more on taxes
By Jay Brodell
editor of  A.M. Costa Rica staff

The unusual way that Costa Ricans appraise property is coming to haunt expats who own dwellings here.

At a time when some properties are selling at give-away prices, the finance ministry has set new assessment values based on the rising price of construction materials.

That means a higher value that might put more homes into the luxury category where the owners have to pay an extra annual tax and opens the way for municipalities to adopt these values for local taxes.

The Dirección General de Tributación, the tax agency of the Ministerio de Hacienda, released the new value without any fanfare. The decree ended up in an obscure part of the La Gaceta official newspaper Thursday.

The edict continues the government's reliance on the appraisal system called replacement cost new less depreciation. This is in wide use in Costa Rica even though many appraisal texts call this unreliable except in special cases.

In this system the appraiser measures the area of a structure and tries to determine based on current prices how much the cost would be to replicate it. Once the estimated cost new is determined, the appraiser applies a deduction for actual depreciation, that is the wear and tear, and the statutory depreciation, that is the amount the government will allow.

This system of appraisal appeals to the Costa Rican sense of order and allows them to ignore what may be the actual market value of a property.

The true value of a property is what someone will pay to buy it, and the more reliable market data approach compares a property to recent sales of similar structures that actually have taken place.

Under the government system, a 400-square-meter concrete home in a San José slum would have the same value as one sitting on a hill overlooking the Pacific Ocean in a community like Dominical or Tamarindo. The government tries to compensate for this by issuing estimated values for square meters of land in different parts of the country, but the adjustment seldom is sufficient to offset the replacement cost approach.

The Tributación edict also includes hotels, whose struggling owners will have to pay the same luxury tax as homeowners. But hotels are a business, and appraisers generally try to evaluate an ongoing commercial enterprise by its income and profit. The income approach to value would clearly report that the McDonald's fast food operation on the downtown pedestrian mall is worth much more than the value of its bricks and mortar. And that approach also would say that a southern Costa Rica hotel that is standing empty and unused is worth far less than the cost of constructing it.

The decree appears to increase the square-meter value of dwellings as much as 40 percent. That
Do-it-yourself guide
to figuring tax base

By the A.M. Costa Rica staff

Want to do your own appraisal?

The depiction of the method in the Tributación manual of assessment looks more complex than it really is.

depreciaton

This is the way to determine depreciation. D is depreciation and it is determined by adding x, the actual age, over estimated useful life (n) to the square of the actual age and the square of the estimated useful life. Tributación lists the useful life ranging from 40 years for a concrete prefabricated structure to 100 years for adobe.

Then the whole thing is divided by 2.

According to this formula a 24-year-old adobe structure would have 15 percent depreciation due to age. Windsor Castle would have no value under this formula.

valuation

Finding the actual value (VA) is even more interesting. The depreciation found previously is multiplied by the replacement cost new (Vn)  and then everything is multiplied by a fudge factor E, the estimated condition of the property.

means some homeowners whose properties were not subject to the luxury tax in the past are now.

Most expats will need help with the tax assessment. The declaration of value, which the homeowner must make, is good for three years. Since the tax is three-years-old, those who have been paying the tax based on 2009 figures must report a new value based on the new data issued by Tributación.

The declaration can be submitted via the tax agency's electronic system. Or it can be handed in on Form  D-179. In any case, the math to determine the value of a dwelling or a hotel or a condo is challenging.

The good news for some homeowners this year is that the threshold for paying the so-called luxury tax has increased from 100 million to 111 million colons or about $224,470. In part this is due to the increased value of the colon against the U.S. dollar. That includes the estimated value of the lot. Condo owners also have to include their proportional share of the common areas.


Editor Brodell has conducted a number of property appraisals in his long career. He has been admitted as an expert witness on the value of newspaper properties in a U.S. state court.



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A.M. Costa Rica's professional directory is where business people who wish to reach the English-speaking community may invite responses. If you are interested in being represented here, please contact the editor.


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Alert issued on vehicle scam
using online classified ads


By the A.M. Costa Rica staff

Prosecutors said Friday that at least 50 people have been victimized in the past few weeks by the same online scam.

The scam purports to sell a used car online for a cheap price. It asks for people to make cash payments in advance.

Officials recommended that persons buying cars online be extra cautious and that they not make cash payments in advance to cover the shipping cost, according to a press release from the Ministerio Público.

Investigators would not specify the Web sites where the scammers posted.

Prosecutors from the Fiscalía de Fraudes said that the scam starts on a classified advertisement Web site, where scammers post a picture of a car, a price lower than the market value, a fake foreign phone number and an email. These are probably Web sites where the ads are free and posted automatically so that the scammer has no contact with a real person.

Since the phone number does not work, victims have contacted the scammer through email.

The report explained that the supposed owner of the car took an international road trip but cannot register the car in the country where he or she has arrived. The lower price is supposed to compensate for shipping costs and taxes.

In order to cover those shipping costs the crook asks for an advance payment and names a fake shipping company that the crook says he or she will contact, prosecutors said. The scammer then has the victim transfer the money abroad through Western Union or MoneyGram.

Officials said that the scammer also asks the victim to scan the money transfer receipt and send it by email to the scammer to make collecting the money easier.

Prosecutors gave three recommendations to persons that shop for cars online. They said that shoppers should be cautious in general of cheap deals that seem too good to be true, get advice from experts that have experience in the car market and not pay cash in advance.


Firm wins excellence award
for second year in a row


By the A.M. Costa Rica staff

A local manufacturer received high honors from the Cámara de Industrias de Costa Rica at an annual business awards ceremony Thursday.

The company, Productos de Espuma S.A., or just Prodex, won the highest award for general excellence for the second year in a row, according to a press release from the chamber.

Additionally the chamber of industries gave Prodex awards for being the top business in leadership and strategic planning, customer focus and market innovation as well as technology.

The annual award is actually part of an evaluation process called Programa a la Excelencia that businesses enlist the chamber to perform. The evaluations show participating businesses how they can improve. The chamber gives out awards based on these evaluations and improvements made as a result.

Prodex makes plastic thermal reflectors and polyethylene packing materials. It says that 75 percent of its products are exported.

44 businesses participated this year in the program and the awards process, the fifteenth year of the program.


Immigration police grab
fake identity documents


By the A.M. Costa Rica staff

The investigation unit of the immigration police is handling a case of fraud which involves persons making false documents in an apartment in San Sebastián, San José.

Two suspects who have the last names Castillo Rojos and Solis Picado were arrested for distributing fake work permits and cédulas, according to a release. 

The cédulas were sold to foreigners for 65,000 colons each and work permits for 45,000 colons each.

According to the immigration agency, investigators were anonymously alerted about the activity, and began looking into the apartment laboratory during the end of September.

Driver's licenses and permits for carrying weapons, were also found in the laboratory.

Unknown is who exactly bought the documents, said an immigration spokesperson.

 
Find out what the papers
said today in Spanish


By the A.M. Costa Rica staff

Here is the section where you can scan short summaries from the Spanish-language press. If you want to know more, just click on a link and you will see and longer summary and have the opportunity to read the entire news story on the page of the Spanish-language newspaper but translated into English.

Translations may be a bit rough, but software is improving every day.

When you see the Summary in English of news stories not covered today by A.M. Costa Rica, you will have a chance to comment.

This is a new service of A.M. Costa Rica called Costa Rica Report. Editor is Daniel Woodall, and you can contact him
 HERE!
From the Costa Rican press
News items posted Monday through Friday by 8 a.m.
Click a story for the summary













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A.M. Costa Rica Third News Page
San José, Costa Rica, Monday, Nov. 19, 2012, Vol. 12, No. 230
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People get
bridges, too


People are getting bailey bridges of their own. The minispans bridge spots dangerous for pedestrians in Porvenir and Aguas Zarcas, both in San Carlos. They resemble the big ones that the Consejo Nacional de Vialidad puts up when a road washes out. Bridges cost from 5 to 6.5 million colons ($10,000 to $13,000), including site work.
bridge for people
Consejo Nacional de Vialidad photo









The Laboratorio said that 2005 was the year with the fewest quakes of 4.5 or more in 39 years. That year saw 59 earthquakes.
4.5
                earthquakes

Bulk of the recent quakes are not the fault of the tectonic plates
By the A.M. Costa Rica staff

Central Valley residents felt a sharp shock at 10:40 p.m. Sunday when the seventh significant earthquake of the day made itself known.

This one was estimated to have been a kilometer southeast of  Dulce Nombre de Cartago, and the magnitude was estimated by all three monitoring agencies at 3.8.

Another significant quake Sunday was at 2:23 a.m. about 9 kilometers west of Hacienda Murcielago de la Cruz in northwestern Costa Rica. That was estimated at a 3.6 magnitude. There also was a 3.4-magnitude quake Sunday at 8:16 a.m. a kilometer northeast of Sandalo de Golfito in southern Costa Rica, said the Observatorio Vulcanológico y Sismológico de Costa Rica.

The Laboratorio de Ingenieria Sismica reported a 4.3-magnitude quake Friday about 6 kilometers (less than 4 miles) south southwest of Yolillal de Upala in northern Costa Rica. That was at 10:36 p.m.

The Laboratorio also reported a 3.9-magnitude quake about 6.6 kilometers southeast of Pittier de Coto Brus, also in the southern part of the country at 7:32 a.m. Saturday.

Despite the proliferation of quakes, the Red Sismológica Nacional said that many are the result of local faults and not a result of the Cocos tectonic plate grinding against the lighter Caribbean plate.

The 10:36 p.m. Friday quake was so deep at 177 kilometers, about 110 miles, that it was hardly felt, said the Red Sismológica. By contrast a flurry of three quakes less than four kilometers deep were felt last week in Escazú even though the magnitudes were less.

Before the weekend flurry of quakes, the Laboratorio calculated that there had been 140 quakes of 4.5 or better this
earthquakes
Red Sismológica Nacional graphic
 Of eight earthquakes last week on two (in blue) were caused
 by tectonic plates, said the Red Sismológica.


year in Central America, including three greater than 7.0 magnitude within 72 days. That includes the Sept. 5 quake off the coast of the Nicoya peninsula.

That is unusual because only 1876, 1983 and 1992 were years in which there were two quakes of that magnitude.

The year with the most quakes in Central America was 1992, said the Laboratorio. That was the year of the devastating earthquake in Nicaragua, and there were 235 quakes.

The Laboratorio said that 2005 was the year with the fewest quakes of 4.5 or more in 39 years. That year saw 59 earthquakes, the Laboratorio said.

The region averages 114 quakes of 4.5 or better per year.

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A.M. Costa Rica's Fourth News page
San José, Costa Rica, Monday, Nov. 19, 2012, Vol. 12, No. 230
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Medical
                vacation promo

Rejection of magistrate
brings avalanche of backers


By the A.M. Costa Rica staff

The roof seems to have fallen in on lawmakers who voted Thursday to fire a sitting magistrate.

The magistrate, Fernando Cruz Castro, sits on the Sala IV, the constitutional court, and has been a key figure in a number of controversial decisions.

A coalition led by the Partido Liberación Nacional fielded the 38 votes required to reject reappointing Cruz to another eight-year term.

The reasons given were thin, and the left-leaning Asociación Nacional de Empleados Públicos y Privados called them pathetic and said that the decision was an end to judicial independence. Magistrates seldom have been deposed in Costa Rica.

A number of developments may keep Cruz in his job. A march is planned by supporters for Thursday. Three persons already have filed appeals with the same Sala IV. And lawmakers today might be asked to reverse the vote. Several supports have questioned the technicalities relating to the vote with an eye towards finding that the lawmakers made a fatal error under the rules of the Asamblea Legislativa.

Cruz has been described as independent.

Rodrigo Arias, the brother of the former president and a presidential candidate himself, issued a denial Friday that said the negative vote for Cruz was not a maneuver on his part.

No one disputes that the legislature has a legal right to reject a magistrate although some question the philosophy of how that policy was developed.


General Cañas Autopista
to be opened fully today


By the A.M. Costa Rica staff

Highway workers were supposed to open the westbound land of the Autopista General Cañas at 5 a.m. today after a rush job over the weekend of back filling a construction site.

This is where the road washed out and bailey bridges were installed. After a series of events worthy of a television soap opera, workmen were able to put down asphalt over the weekend. The eastbound lanes already had been brought back into service.

By midday Sunday the road was ready except for white lines.

This is where a spillway washed out and created a big hole in the westbound lanes. So officials decided to put both east and westbound lanes on bailey bridges and excavate completely the ground underneath. Workmen installed concrete arches and were about to finishing that part of the job when an 84-ton self-propelled crane tried to cross one of the two bridges on the eastbound lanes. That weight is about twice the maximum for the temporary steel structures.

What followed was a day and a half of trying to get the large vehicle off the span. Then the damaged span was disassembled and fill dirt put in to bring the soil up to highway surface.

Then the procedure was repeated for the westbound lanes.

All the while motorists suffered delays and detours.


Tax inspectors visiting
businesses in northern zone


By the A.M. Costa Rica staff

Tax inspectors are making the rounds in Alajuela, Heredia and San Carlos.

The Dirección General de Tributación said that 61 inspectors are visiting businesses to provide information and to check on their legality.

The inspectors will be checking on the facturas or receipts issued by the companies but also their health permits and business licenses, Tributación said.

If any businesses still owe tax money, that fact will be brought to the owner's attention, too, the agency said.


Correos clerks accepting
money for postal boxes


By the A.M. Costa Rica staff

Here's one item that has not increased this year: Correos de Costa Rica still is charging 10,000 colons, about $20.60, for a postal box.

The agency said Friday that cashiers are ready to take the money from the 51,348 clients who now have boxes at the various postal offices. The fee is for all of 2013.

If the box holder fails to pay by Jan. 31, the price goes up 50 percent. Customers can lose the box if they do not pay by the end of March.

Correos de Costa Rica also said that 20,000 more boxes are being put into service at the agency's 117 offices. These can be rented for a first-time fee of 20,000 colons, the agency said.

Individuals need a cédula or other valid identification. Corporate clients need to have the personaría juridica of the company and a copy for the initial purchase, the agency said.


Bright lights at night seen
as depression invitation


By the A.M. Costa Rica wire services

A new study suggests that exposure to bright lights in the evening hours may increase the risk of depression and learning difficulties.

According to researchers at The Johns Hopkins University in Baltimore, steady exposure to bright lights at night produced signs of depression and learning disabilities in a group of laboratory mice.

It is well known that day and night rhythms can affect human metabolism, including psychological functions.  Biologist Samer Hattar says this is a condition known as seasonal affective disorder, or SAD, where some people become depressed during the winter season when days grow shorter in the north.  SAD is often treated successfully by having patients spend time in front of special lamps called light boxes, whose full spectrum bulbs simulate natural daylight.

Hattar’s team also believes depression and learning deficits can set in for so-called "night owls" -- people who stay up very late and -- because they tend to sleep in late -- do not see much morning light.

That is a reaction the researchers saw in their study of mice exposed to a cycle of three-and-a-half hours of light followed by three-and-a-half hours of darkness.  Hattar says the cycle did not deprive the mice of sleep, just altered their wake-sleep cycle.
Your links to a great vacation
or retirement

Periodically we like to feature our tourism and retirement experts on the news pages for the benefit of our overseas readers.

Vacation, travel and hospitality

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view from the house
An evening View from George’s Puriscal home
The Relocation/Retirement tour with the
 *HIGHEST SUCCESS RATE
OF RELOCATION*
 (as reported by the moving companies)

Visit many rental options to actually experience the price/amenity options available in more of the areas chosen by Expats for security, comfort, and quality of life. Meet many Expats who are willing to share their experiences and how the tour has value long after the “lust” wears off. Ask the others what you get for your money,
   and then compare the quality of accommodations, quality, quantity and variety of food and drink to measure the best value for your money.
See how to choose a Retirement tour video by past guest!
http://www.vimeo.com/5656822
Learn how others “talk the talk” and learn who really can “walk the walk”
Please visit my Web site  to contact my references.
George Lundquist, retirement, relocation columnist, Guide & Developer/Builder. george@glundquist.com

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Costa Rica Fishing Experts
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Christopher Howard’s Costa Rica Starter Kit!
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Costa Rica’s #1 Time –Tested Relocation/Retirement Tours
Christopher Howard's Award-winning Combination Relocation/Retirement Tour.  NO other retirement tour offers MORE options...MORE areas visited, MORE information and a LONGER fact-filled tour for your money. Winner of the 2010 

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A.M. Costa Rica's
Fifth news page
Cat trees
San José, Costa Rica, Monday, Nov. 19, 2012, Vol. 12, No. 230
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High
                  season

Medical
                vacations in Costa Rica

Distinctive Korean dance
seen as big tourism draw


By the A.M. Costa Rica wire services

The South Korean pop song and music video "Gangnam Style" has gone viral worldwide. And now the South Korean tourism industry is hoping to cash in on the song's international success.

Alexis Martinez, 14, is in a tour group that is learning the dance made famous by South Korean musician Psy in his video Gangnam Style. Martinez says even back home in Texas the song is a big hit.

"It was basically my whole school knew about it, it was crazy," said Martinez.  "There was a flash mob in our school that did it, the Gangnam Style."

"Gangnam Style" is one of the most viewed videos ever on the Internet.  It has ranked high on music charts in Asia, Europe and North America. And is what many say is South Korea's most successful cultural export.
 
For those reasons, some believe "Gangnam Style" can be used to import many foreign visitors and money.

"I think Gangnam Style is bringing up Korea's brand value," said Je Sang-won, who heads the Korea Tourism Organization's Halyu, or Korean Wave, division. "It has attracted more Western fans and made them interested in Korea.  We did a survey in Los Angeles and found 70 percent of respondents said they wanted to visit Korea after they saw the video."

Out of the streets of Gangnam, which is the part of Seoul south of the Han River, businesses are using Psy and his song to help sell products.
 
And some other merchants say ever since "Gangnam Style" went viral, they have seen an increase in foreign shoppers.  
 
Kwon Da-na runs a clothing shop in Gangnam's trendy Apgujeong neighborhood.

"Sometimes there are more foreign customers than Korean shoppers coming to my store.  When I turn on the Gangnam Style song and open the door, some people come in off the street.  They smile a lot," she noted.

South Korea expects to see more than 10 million foreign visitors this year.  And according to the Korea Tourism Organization, Korean pop music, known as K-POP, is one of the country's biggest draws. And now thanks to Psy, the KTO plans to use Gangnam Style to attract more foreign tourists.
 
Tourist Alexis Martinez says the "Gangnam Style" dance is one that anyone can learn.  And cool is what "Gangnam Style" is all about.


New Anglican church leader
faces difficult challenges


By the A.M. Costa Rica wire services

The newly appointed Archbishop of Canterbury, the spiritual leader of the global Anglican Communion, faces major challenges in uniting the faith’s increasingly divided church. For church members in Africa  where more than half of Anglicans live opinions vary about how Justin Welby will weather the storm.

Welby will take up his new position as the archbishop of Canterbury early next year. It will be a remarkable undertaking for a man who began his career in the oil industry before becoming a parish priest in the Church of England. He has only been a bishop for one year.

South African theologian Barney Pityana said many African Anglicans in his region do not know anything about Welby.

“There is a little bit of apprehension over the appointment of somebody with so little episcopal experience,” said Pityana.

The trouble, he said, is that the Anglican Communion, with its 80 million members, is at a complex and crucial point in its history.

Issues that have dogged the church for the past decade continue to threaten Anglican unity, dividing liberals, many in North America, and conservatives, many based in Africa.

The split between liberal and conservative regions set in after the United States consecrated its first openly gay bishop. Since then, disputes over homosexual priests and same-sex marriages have become a major stumbling block.

Welby has said he agrees with the Church of England bishops’ position in opposition to gay marriage. On the other hand, he supports the ordination of women, another, though lesser, issue of controversy.

The archbishop also comes from the church's evangelical wing, which analysts say should stand him well in Africa. Pityana said that building a bridge between the two sides, however, will not be easy.

"Clearly any archbishop has got to be a master diplomat, has got to be somebody who can really balance out a variety of interests and pushes and pulls in the Anglican community. In this time, I would imagine there is a schism in all but name," said Pityana.
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ALAJUELA – SERENE LIVING – MONTHLY $800 TO $1,200
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BEACHFRONT, OFF-SEASON HOUSE/CABIN RENTALS
Playa Zancudo is located in the southern Pacific side of CR, out of Golfito and across from Puerto Jiménez.   Beautiful, long, sandy beach with a tranquil community of Ticos and expats. Phone and fast Internet.  Prices vary from length of time, to size of house. A one-month house rental might be $1,400, and reduced to $900 per month for 3 months.  Cabins, which have Internet and bi-weekly maid service are considerably less, and have kitchens and internet and other services. For info:  loscocoscabins@gmail.com.
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BBC news feeds may be found on Page 7 HERE!

Some of our other titles:
A.M. Panama
A.M. Colombia
A.M. Guatemala
A.M. Honduras
A.M. Havana
A.M. Nicaragua
A.M. Venezuela
A.M. Central America
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A.M. Ecuador A.M. San Salvador
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A.M. Costa Rica's
sixth news page


San José, Costa Rica, Monday, Nov. 19, 2012, Vol. 12, No. 230
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Latin America news
Sea still holds many secrets
as cataloging continues


By the Cell Press news service

At least one-third of the species that inhabit the world's oceans may remain completely unknown to science. That's despite the fact that more species have been described in the last decade than in any previous one, according to a report published online in the Cell Press publication Current Biology that details the first comprehensive register of marine species of the world — a massive collaborative undertaking by hundreds of experts around the globe.

The researchers estimate that the ocean may be home to as many as one million species. About 226,000 of those species have so far been described. There are another 65,000 species awaiting description in specimen collections.

"For the first time, we can provide a very detailed overview of species richness, partitioned among all major marine groups. It is the state of the art of what we know — and perhaps do not know — about life in the ocean," said Ward Appeltans of the U.N. Intergovernmental Oceanographic Commission.

The findings provide a reference point for conservation efforts and estimates of extinction rates, the researchers say. They expect that the vast majority of unknown species — composed disproportionately of smaller crustaceans, molluscs, worms, and sponges —will be found this century.

Earlier estimates of ocean diversity had relied on expert polls based on extrapolations from past rates of species descriptions and other measures. Those estimates varied widely, suffering because there was no global catalog of marine species.

Appeltans and colleagues including Mark Costello from the University of Auckland have now built such an inventory. The World Register of Marine Species is an open-access, online data base created by 270 experts representing 146 institutions and 32 countries. It is now 95 percent complete and is continually being updated as new species are discovered.

"Building this was not as simple as it should be, because there has not been any formal way to register species," Costello says.

A particular problem is the occurrence of multiple descriptions and names for the same species — so called synonyms, Costello says. For instance, each whale or dolphin has on average 14 different scientific names.

As those synonyms are discovered through careful examination of records and specimens, the researchers expect perhaps 40,000 supposed species to be struck from the list. But such losses will probably be made up as DNA evidence reveals overlooked species.

While fewer species live in the ocean than on land, marine life represents much older evolutionary lineages that are fundamental to our understanding of life on Earth, Appeltans said. And, in some sense, the data base is only the start.

"This data base provides an example of how other biologists could similarly collaborate to collectively produce an inventory of all life on Earth," Appeltans said.








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