Quote:
Originally Posted by SALYBOW
I agree with Gracie. "EVERYWHERE the house market is taking a bath. It is less affected here than in most places....at least now. HOWEVER who knows what will happen to our home values if some of our own residents keep trashing this area and the developers. I challenge you to find any place in this country that is more solid than this place as an investment."
I am wondering how a new bond could be issued to people who have already paid for their home with cash or with a mortgage. We were told what the bond is at that time. Can they really come back and say that we now have to pay another one. It sounds to me, and I don't really know much about bonds etc, that this is between them and the IRS. The developer may be able to pass this on to new buyers, but can they apply it to us retroactively?
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Sally,
It is not the bond you paid. It is a separate bond used to finance the acquisition of amenities by the CDDs. At issue are the price these assets were valued at as well the degree of independence of the CDDs from the developer. It is the tax status of the bonds that are in question. If the assets are found to have been improperly valued (i.e. the developer "overcharged" the CDDs) and/or it is determined that the CDDs are really run by the developer, then the ability to issue tax-free bonds will be in jeopardy.
Tax free bonds carry a lower interest rate than taxable bonds with a comparable risk. So, it gets complicated in a hurry and, as there is no precedent, we don't know the outcome and speculation is really just that.
One thing for sure - the IRS doesn't issue determinations based on the size of the deficit.