Quote:
Originally Posted by Advogado
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.
|
That seems to be the case as the board of the VCDD is "elected" (appointed) by the Developer as the Developer is the only landowner of the District and, therefore, the only qualified voter.
What I don't understand is why tax free bonds were issued in the first place if they were not really tax free? It was done in the open. At the time everyone thought it was a great idea. I remember the first orientation I attended years ago (before IRS involvement) Pete Wahl (then District Manager) explained the process in great detail.
Those purchasing the bonds must have felt they were making a sound investment.