Quote:
Originally Posted by l2ridehd
You just need to do the math. Lets say the IRS gets there 16 million in fines. And they have to stop selling these as tax free bonds. I doubt anyone gets 100% of what they want, but assume worst case and they do. So the difference between tax free and taxable bonds right now is very small. So the bond holders get hurt a little bit and future bonds for the rest of the development may not be so attractive. But take the 16 million and assess every home in TV, again worst case. Each home would owe a little less then $300. Probably have to paid over 2 years, so an added assessment of an awful $15 a month with interest for 2 years. My guess would be that will never happen, but even the maximum fine having to paid by the residents, while not great, probably wont change what you have for dinner tonight.
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Good points! but as usual I have questions.
1. Does your approach account for the possibility the IRS will require TV to redeem the bonds and sell new ones at current rates? I think the current bond holders will want a lot to cover their lost profit with the interest rate on the sold bonds probably being a lot higher than the interest rate they would get on current taxable bonds. The bond holders will not want to give up that profit for nothing. If you idea does, please explain. This is one of the issues that I do not understand, how the bonds would be remedied if they are not tax free. How does the IRS calculate how much money they have lost thus far? Redo the tax returns of the people that bought the bonds and figure out what taxes they avoided and then assess that to the bond sellers? Or do they have a statutory fine that based on the value of the bonds.... that would be my guess.
2. If they were forced to redeem the bonds, can the commercial districts sell taxable bonds in this current market with bond interest so low and real estate in so much trouble?
3. Your solution is assess homeowners in TV but is it possible to assess all of the homeowners in TV for this problem? Who ever issued the bonds would probably have to pay, and what would be the source of their revenue? If it Amenities fees, they are capped by the cola which was a point earlier that amenities COULD suffer SOMEWHAT.
4. Was that 16 million dollar claim for all bonds, or just the ones they originally looked at? As I remember, when there was no settlement, the IRS said they were going to look at all of the bonds.
Your point is very good which is this should not be that big of a problem, and my point is you are right so why can they not get is resolved NOW, instead of leaving it hang, and hurting TV. JJ