MR deduction

[bearishgurl]

[quote=flu]BG, you really don’t like to be wrong do you?

Come on. You’re trying argue you are right despite the facts to the contrary and trying to pick a minute wording in every document that clearly indicates that Mello R is deductible and will be deductible until the forseeable future. You’re not an accountant (neither and I) but I’ve definitely have checked with many accountants who have also confirmed this…

“might” is a loosey goosey word. Hell, I *might* win the Powerball lottery….

I think you missed this statement from the IRS.. Let me bold and emphasize for you too…

However, § 1.164-4(b)(1) permits a deduction for assessments to provide local
benefits to the extent that the taxpayer can show they were imposed to repair, maintain,
or meet interest charges for such benefits.

Seriously, it’s ok to be wrong sometimes…We’re all wrong sometimes…[/quote]

I read your bolded statement for IRC § 1.164-4(b)(1).

How are you going to show the FTB that your MR levy was used to “repair, maintain, or meet interest charges” (to “repair” and “maintain” the land within your CFD)?

[bearishgurl]

[quote=flu]Which tax preparer are you referring to? The one that charged me $250/hr or the other one that charged me $150 to answer an email? In both cases, yes I spoke to both of them about recently, and in the brief 1 question 6 word sentence, I did manage to squeeze in the MR question without being unduly billed… 🙂

(Clearly, I’m in the wrong business)…[/quote]

So what did these high-paid “experts” tell you??

[bearishgurl]

[quote=SK in CV][quote=bearishgurl](emphasis added)

The Chief Counsel seems to be stating here that (MR) assessments may be deductible IF

… they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority’s jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges)…

MR isn’t levied “on all properties in the taxing authority’s jurisdiction.” It’s only levied on the properties within CFD’s in which the bonds have not yet been retired.

In addition, MR assessments in CA ARE for local benefits, not “maintenance” because the local jurisdictions (city/county) maintain the public lands within the CFD’s.

However, some of the MR payments service interest charges.

Without further direction from the IRS/FTB, this issue seems like it could be a quagmire for affected taxpayers.[/quote]

The FTB concluded:

“We have removed material from our website that limits the deductibility of real property taxes to taxes imposed on an ad valorem basis.”

Essentially they conceded that based on the IRS letter, MR is deductible.[/quote]

Is that just for the 2012 tax year, until further notice … or forever?

[SK in CV]

[quote=bearishgurl]
Is that just for the 2012 tax year, until further notice … or forever?[/quote]

Until further notice. More complete quote from the FTB:

The letter [from the IRS to the FTB] goes on to state that appropriate revisions to the IRS forms and publications on the subject will be recommended.

Under current law, the deductibility of real property taxes is generally a matter of federal law to which California conforms. As such, the FTB will be waiting to review the revisions to the IRS forms and publications to provide comparable revisions to California tax form instructions. The FTB does not anticipate that these revisions will be made prior to the due date for 2011 tax returns (April 17, 2012). We have removed material from our website that limits the deductibility of real property taxes to taxes imposed on an ad valorem basis. Once the IRS forms and instructions are revised, we will provide revised California forms and instructions that are consistent with the revisions made by the IRS.

I can find no indication any update has been done by the IRS, nor has the FTB issued any new guidance that I can find.

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