Quote:
Originally Posted by Mr.Kris
Interestingly, from all of the publicly available documents I have reviewed, for the first time it appears the IRS is deemphasizing the original argument of whether the Issuer is a political subdivision and whether its debt is issued on behalf of a State or local governmental to the argument that under the 10% rule the bonds meet the private security or payment test. In other words, the argument is being moved from the subjective, i.e. is the issuer a government entity, to the objective, i.e. 10% rule. It's easier, in my opinion, to win an objective argument.
If you have been following this as deeply as I have, I would like much to hear from you and see your analysis. If you want to talk about your grandkids or dirty politicians not so much.
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Yes, as I recall, initially the IRS was making such broad arguments that, if sustained, could have resulted in all bonds issued by Florida CDDs being taxable. That would have had major implications for the municipal bond market. Now, the IRS seems to be relying on a narrower rationale that would limit the taxability of CDD bonds to those issued by The Villages Center Districts.