Home › Forums › Housing › State tax deductibility of all Mello-Roos charges threatened beginning tax year 2012
- This topic has 49 replies, 11 voices, and was last updated 12 years, 2 months ago by
no_such_reality.
-
AuthorPosts
-
February 21, 2012 at 2:15 PM #738427February 21, 2012 at 2:17 PM #738428
CoronitaParticipant[quote=bearishgurl][quote=UCGal]Sure you couldn’t legally deduct mello roos in the first place… but most folks did.
Now the state will be able to look at your itemized bill since you have to provide that info along with your parcel number.
For those of us that live in non HOA areas… it seems like it might apply to various bond measures as well…[/quote]
Upon reviewing my tax bill, it appears the voter-approved school and CC bonds ARE part of the ad valorem portion of a property tax bill and thus ARE and will CONTINUE to be deductible.
Following UCGal’s example, she is correct.
For example – from my bill:
FIXED CHARGE ASSMTS: PHONE
CWA WTR AVAILABILITY 858-522-6900 10.00
VECTOR DISEASE CTRL 800-273-5167 5.86
MWD WTR STANDBY CHRG 866-807-6864 11.50
MOSQUITO SURVEILLANC 800-273-5167 2.28Acc to the FTB website, a total $29.64 of the tax bill of my primary residence will not be deductible beginning next year.
I do not live in a MR-encumbered CFD, either.[/quote]
And it will be fun to watch a computer figure out when one county calls something “voter approved school bond” or something else “ad valorem” in one way, and anothe county calls it something else, and there is no “code” or “key” that computer system can parse universally.. Meanwhile, if this hodgepodge “system” is put in place and operational by next year, it would be even more fun seeing a bunch of tax filings incorrectly flagged, in person audits being requested, and then finding that their aren’t enough auditors to go through what most likely are correct reporting by filers (because after all, it costs money to hire more auditors…probably more so than how many people actually incorrectly file intentionally)… Lol, this is gonna be fun to watch.
The state is better off trying to audit businesses more carefully and finding real tax cheats…But our government always loves to try to find pennies when it’s losing boatloads!
February 21, 2012 at 2:26 PM #738429UCGal
Participant[quote=flu][quote=bearishgurl]I just ran across this (1/9/12) article:
(emphasis added)see: http://economy.ocregister.com/2012/01/09/state-targets-property-tax-payers/101799/%5B/quote%5D
No need for emphasis here. Everyone here already knows this BG.[/quote]
I’m confused flu…
Here you say everyone already knows this – when she posted an article saying a new computer system will be online this year to get the prop tax data from the counties.Then in other posts you say they will never do it because they’re broke and won’t get the system together.
I assume the prop tax data will be like other tax data reported by employers, brokerage firms, banks, etc… sent directly from the county to the state (and fed)… Done electronically. Presumably they’ve defined the interfaces so that the reporters (counties) can all transmit the data exactly the same. Maybe that’s a leap – but it sounds like this has been in the works for a while.
Are you saying the computer program to accept this data from the counties won’t happen? Or are you saying everyone already knows it will be done (see above).
You can jump all over Brian for being inconsistent… but he’s consistently inconsistent. It throws me for a loop when you’re inconsistent, flu, because usually you maintain the consistent view.
February 21, 2012 at 2:27 PM #738430briansd1
Guestflu, your assertion is that CA homeowners will continue to deduct mello roos because the state doesn’t have the resources to crack down.
You can’t say that I lied without obviating your own argument.
February 21, 2012 at 2:30 PM #738431CoronitaParticipant[quote=briansd1]flu, your assertion is that CA homeowners will continue to deduct mello roos because the state doesn’t have the resources to crack down.
You can’t say that I lied without obviating your own argument.[/quote]
I’m refuting your statement that you said until you’ll start paying your internet/out of state purchase sales taxes once folks start reporting their prop tax correctly.
Well, most folks are going to start to report their taxes correctly because the risk versus reward of not doing so is not there… So you gonna start paying your internet taxes now?
February 21, 2012 at 2:32 PM #738432bearishgurl
Participant[quote=flu]And it will be fun to watch a computer figure out when one county calls something “voter approved school bond” or something else “ad valorem” in one way, and anothe county calls it something else, and there is no “code” or “key” that computer system can parse universally.. Meanwhile, if this hodgepodge “system” is put in place and operational by next year, it would be even more fun seeing a bunch of tax filings incorrectly flagged, in person audits being requested, and then finding that their aren’t enough auditors to go through what most likely are correct reporting by filers (because after all, it costs money to hire more auditors…probably more so than how many people actually incorrectly file intentionally)… Lol, this is gonna be fun to watch….[/quote]
flu, no matter what colors or fonts they use, each CA county follows the same format in their tax bills:
A typical CA property tax bill is set up like this:
Parcel #: 111-1111-11-0000
Assessed value: $200,000
In this example, $2,040 is deductible property tax.
Description Tax Rate/Phone Tax Amount Total
County Wide 1% 2,000.00
College Gov .020% 40.00
Total Tax on Net Value (Ad Valorem) $2,040.00Community College 800-111-1111 190.00
Mello–Roos/CFD 800-111-1112 800.00
Water Fees 800-111-1113 10.00
Total Direct Levy/Special Assessments $1,000.00Total Property Tax $3,040.00
The Total Tax on Net Value is the only part that can be deducted on an income tax return.
see: https://www.ftb.ca.gov/individuals/Real_Estate_Tax_Deduction/index.shtml
Check your own tax bill and spot check one on in RIV or any other county to see for yourself.
February 21, 2012 at 2:44 PM #738433SK in CV
Participant[quote=flu]You’re missing the entire point. Where is the state going to come up with the money to build this “system”. Hello???? We’re in the red, which budget is this going to come from?
][/quote]
I’m not sure why you think this would be a tough system to build. The tax returns with the property tax deduction requires a parcel number. Each of the less than 60 counties in the state provide the FTB with data related to each parcel. Tie the deductible taxes to the tax return. Send out a notice when there’s a variance. Done.
Not exactly that simple, because property owners don’t always pay 2 bills a year. Sometimes 1, sometimes 3, sometimes more if they’re delinquent. But I don’t think it’s all that difficult. Just one more compliance check. It will pay for itself in the first year.
February 21, 2012 at 2:59 PM #738435no_such_reality
Participant[quote=flu]
Well, most folks are going to start to report their taxes correctly because the risk versus reward of not doing so is not there… So you gonna start paying your internet taxes now?[/quote]
They, FTB, also have a suggested use tax level by income level.
I can seem them, ftb, trying to bully people into paying by making the payer disprove havIng bought. Onus is on FTB but most payers wI’ll opt easy path.
No problems though the state board of equalization has a 50 page document outlining the exemptions to use and sales tax
And an 88 page document for the rules on taxes for paying the nanny or baby sitter.
So paying nothing invites an audit,an audit invites a pissuing match and paying something invites a rectal exam
I love our FTB
February 21, 2012 at 3:00 PM #738434CoronitaParticipant[quote=UCGal][quote=flu][quote=bearishgurl]I just ran across this (1/9/12) article:
(emphasis added)see: http://economy.ocregister.com/2012/01/09/state-targets-property-tax-payers/101799/%5B/quote%5D
No need for emphasis here. Everyone here already knows this BG.[/quote]
I’m confused flu…
Here you say everyone already knows this – when she posted an article saying a new computer system will be online this year to get the prop tax data from the counties.Then in other posts you say they will never do it because they’re broke and won’t get the system together.
I assume the prop tax data will be like other tax data reported by employers, brokerage firms, banks, etc… sent directly from the county to the state (and fed)… Done electronically. Presumably they’ve defined the interfaces so that the reporters (counties) can all transmit the data exactly the same. Maybe that’s a leap – but it sounds like this has been in the works for a while.
Are you saying the computer program to accept this data from the counties won’t happen? Or are you saying everyone already knows it will be done (see above).
You can jump all over Brian for being inconsistent… but he’s consistently inconsistent. It throws me for a loop when you’re inconsistent, flu, because usually you maintain the consistent view.[/quote]
I meant to say that everyone knows reporting mello-ruse (sic) as property tax deduction is not correct. There’s been countless articles, discussions about this.
As far as the other part. I heavily doubt any reliable system is gonna be in place. They were talking about this in 2011. There is not going to be county to state electronic feeds, otherwise they wouldn’t be asking each person to send in their property tax bill. And that electronic feed is absolutely needed.
The analogy would be the 1099 form. You don’t send in 1099 forms because the IRS/FTB can already obtain that information electronically. And any information that needs to be reported but not sent electronically by the financial instituation is subject to accuracy issues…That’s why for the longest time, things such as wash sales and options/derivatives were more or less reported on an “honor system”, because the they don’t appear in a 1099 form, and without a explicit audit, there would be no electronic way (in the past) to verify if you complied with wash sales rules or reported profits from derivative trading correctly or for that matter reporting gains on stocks for which you had multiple multiple transactions throughout years and years of ownership For example, if one traded 1 stock 100 times in a 10-15 year interval, with varying purchase prices and sale prices, it’s nearly impossible for a computer to figure out if the same purchase shares were used more than once simply because the purchases were never reported to the IRS and never tracked. Option/derivative transactions were never reported to the IRS (and to my knowlede still aren’t)…And wash sales are can’t be t if you don’t have the buy history in the system. The system depended too heavily on the filer to accurately report.
The issue with dealing with the property tax bills is going to be exactly the same. Because again, it’s depending on the information that the owner sends in.
Even if the majority of the people won’t be sending in fake forms, just dealing with the different taxonomy within the country of what is ad-valorem and what isn’t going to be trivial…Because there isn’t a common dictionary or code to indicate what is or is not.My understanding of how this hodgepodge system probably will work is “everything above a certain line” is going to be classified as deductible, everything below a certain box is going to be generally considered not taxable… Hope it’s consistent.
February 21, 2012 at 3:10 PM #738437ltsddd
Participant[quote=flu][quote=UCGal][quote=flu][quote=bearishgurl]I just ran across this (1/9/12) article:
(emphasis added)see: http://economy.ocregister.com/2012/01/09/state-targets-property-tax-payers/101799/%5B/quote%5D
No need for emphasis here. Everyone here already knows this BG.[/quote]
I’m confused flu…
Here you say everyone already knows this – when she posted an article saying a new computer system will be online this year to get the prop tax data from the counties.Then in other posts you say they will never do it because they’re broke and won’t get the system together.
I assume the prop tax data will be like other tax data reported by employers, brokerage firms, banks, etc… sent directly from the county to the state (and fed)… Done electronically. Presumably they’ve defined the interfaces so that the reporters (counties) can all transmit the data exactly the same. Maybe that’s a leap – but it sounds like this has been in the works for a while.
Are you saying the computer program to accept this data from the counties won’t happen? Or are you saying everyone already knows it will be done (see above).
You can jump all over Brian for being inconsistent… but he’s consistently inconsistent. It throws me for a loop when you’re inconsistent, flu, because usually you maintain the consistent view.[/quote]
I meant to say that everyone knows reporting mello-ruse (sic) as property tax deduction is not correct. There’s been countless articles, discussions about this.
As far as the other part. I heavily doubt any reliable system is gonna be in place. They were talking about this in 2011. There is not going to be county to state electronic feeds, otherwise they wouldn’t be asking each person to send in their property tax bill. And that electronic feed is absolutely needed.
The analogy would be the 1099 form. You don’t send in 1099 forms because the IRS/FTB can already obtain that information electronically. And any information that needs to be reported but not sent electronically by the financial instituation is subject to accuracy issues…That’s why for the longest time, things such as wash sales and options/derivatives were more or less reported on an “honor system”, because the they don’t appear in a 1099 form, and without a explicit audit, there would be no electronic way (in the past) to verify if you complied with wash sales rules or reported profits from derivative trading correctly or for that matter reporting gains on stocks for which you had multiple multiple transactions throughout years and years of ownership For example, if one traded 1 stock 100 times in a 10-15 year interval, with varying purchase prices and sale prices, it’s nearly impossible for a computer to figure out if the same purchase shares were used more than once simply because the purchases were never reported to the IRS and never tracked. Option/derivative transactions were never reported to the IRS (and to my knowlede still aren’t)…And wash sales are can’t be t if you don’t have the buy history in the system. The system depended too heavily on the filer to accurately report.
The issue with dealing with the property tax bills is going to be exactly the same. Because again, it’s depending on the information that the owner sends in.
Even if the majority of the people won’t be sending in fake forms, just dealing with the different taxonomy within the country of what is ad-valorem and what isn’t going to be trivial…Because there isn’t a common dictionary or code to indicate what is or is not.My understanding of how this hodgepodge system probably will work is “everything above a certain line” is going to be classified as deductible, everything below a certain box is going to be generally considered not taxable… Hope it’s consistent.[/quote]
I couldn’t see anywhere in the article that says tax filers need to send in a copy of their property tax bills. It does, however, mentioned that tax filers might need to have a copy of the property tax – and I assume – so that when they do their taxes they’ll know what is deductible and what’s not.
As some others pointed out, this is not as complicated for the state to implement and enforce. It’s far less complicated than the wash-sale rule. Stocks and mutual funds are much more complicated – you could buy/sell any amount at anytime, dividends, splits, reverse splits, etc…
February 21, 2012 at 3:14 PM #738436CoronitaParticipant[quote=SK in CV][quote=flu]You’re missing the entire point. Where is the state going to come up with the money to build this “system”. Hello???? We’re in the red, which budget is this going to come from?
][/quote]
I’m not sure why you think this would be a tough system to build. The tax returns with the property tax deduction requires a parcel number. Each of the less than 60 counties in the state provide the FTB with data related to each parcel. Tie the deductible taxes to the tax return. Send out a notice when there’s a variance. Done.
Not exactly that simple, because property owners don’t always pay 2 bills a year. Sometimes 1, sometimes 3, sometimes more if they’re delinquent. But I don’t think it’s all that difficult. Just one more compliance check. It will pay for itself in the first year.[/quote]
Technically it’s never tough. Logistically, to do something across 60 counties in such a short period of time is the tough. It’s not the actual work to push the data, it’s everything else you need around it. Security, scalability, reliability,etc,etc,etc..Not to mention agreement across 60 counties on the protocol, a good part is just on how this data is going to be represented.Then also there’s the logistics of who does what and who pays what at the county and state level.
Also, do the counties have the resources to do this, being that they are in red too?
February 21, 2012 at 3:24 PM #738438all
ParticipantThere are exceptions. In particular, “Maintenance, repair, or interest portion of local benefit tax” are deductible as long as you can document what part of the local benefit tax was used for ‘maintenance, repair, or interest’.
February 21, 2012 at 3:27 PM #738439CoronitaParticipant[quote=captcha]There are exceptions. In particular, “Maintenance, repair, or interest portion of local benefit tax” are deductible as long as you can document what part of the local benefit tax was used for ‘maintenance, repair, or interest’.[/quote]
Have fun guys sorting this out with the FTB!
February 21, 2012 at 3:29 PM #738440sdrealtor
Participant[quote=briansd1][quote=flu][quote=briansd1]As some people might say, enforce the laws already on the books.[/quote]
Brian, have you started paying sales tax for all the things you buy on amazon? Or are you still not reporting that, like the last time you admitted?[/quote]
No I don’t pay use tax on stuff I buy online… But if the state had some way of enforcing it, I will.
I think that Amazon has agreed to start collecting taxes on CA sales sometimes later this year.
http://articles.latimes.com/2011/sep/08/business/la-fi-amazon-tax-20110908I now do most of my shopping in Philadelphia where there’s no sales tax on clothing, and in Delaware where’s there’s no sales tax at all.[/quote]
Did you get a Dallas Sucks! T shirt yet?
February 21, 2012 at 3:31 PM #738441ParticipantLets see $800 MR x state tax rate. Guess I will skip happy hour tonight to make up for that one. Next!
-
AuthorPosts
- You must be logged in to reply to this topic.