Quote:
Originally Posted by Muncle
Either I'm getting it wrong or some folks have the situation a bit confused. The way I understand it, party A (developer) built/created at his expense and sold a series of items to party B (the Village Center Development District or the Sumter Landing Community Development District). In order to get funding for this purchase, party B now issues bonds on the bond market. Party A is now out of the deal entirely, whether he made a profit or not, whether he declared the sale and paid taxes or not.
A point that I think some people get confused on here is that these bonds issued by party B have nothing to do with the individual residents and have no connection to the bond associated with individual residences. i.e., the phantom $12, $15, $17, $20K that seems to be added to your purchase price.
The new bonds were issued for the sole purpose of funding the initial purchase party B made from party A. The point of contention now is whether party B has the authority to issue tax-free bonds and whether these bonds in particular qualify to be tax-free. From this point on, it is lawyerville.
Am I totally off base?
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I do not believe you are off base. The only point I would add is the party A created at his expense and then sold at a profit to party B.
My thoughts were that if party A paid taxes would that then help decide if the bonds would be tax free or not. But as was noted that would be logic and we are talking about the IRS.