[laceylady]

I am a CPA and have also done taxes for nine years. The excerpt below is from IRS Pub 527 regarding rentals. It tells me you cannot deduct the bond but can deduct the bond interest and can deduct the CDD payment, if I understand correctly what each is for.


Local benefit taxes. In most cases, you cannot deduct charges for local benefits that increase the value of your property, such as charges for putting in streets, sidewalks, or water and sewer systems. These charges are nondepreciable capital expenditures and must be added to the basis of your property. However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits.