IRS gets its way

[TVMayor]

Read the article in the Village News "VCCDD, AAC hoping to refinance bonds to lock in lower interest rates"

Besides saving money on interest rates, the move also could help with the district’s long-running dispute with the Internal Revenue Service by converting older tax-exempt bonds to taxable bonds. SNIP

[Bizdoc]

Well, now we know who will blink first...

[justjim]

IRS marches to the beat of its own drum ( their interpretation of the tax codes) so I doubt if this will change anything.

[manaboutown]

Looks like someone read the writing on the wall. I had to chuckle when I read the news. The rational given was 'interest rates are low now'. Well, they were substantially lower than they are now a couple of years ago yet no action was taken then!

All in all it is a good business decision IMO, getting the issue resolved and moving on.

How much has been spent on legal fees so far?

[janmcn]

If the VCCDD thinks that refinancing these bonds from tax-free to taxable bonds will help them with their long-running dispute with the IRS, why didn't they do it years ago?

[TVMayor]

If the VCCDD thinks that refinancing these bonds from tax-free to taxable bonds will help them with their long-running dispute with the IRS, why didn't they do it years ago?

Because maybe the owner of the high interest rate tax free bond had a say in this action and he wanted to get the high interest rate as long as he could.

[OurHappyHome]

Who held the bonds

[Bavarian]

I have en offers to sell Villages Tax Free Bonds recently. But I don't want 20 year bonds. Interest may go up and I want the cash available to buy the higher yields

Same with all these other high interest bonds, mature in 2035.

[Bonanza]

[QUOTE=manaboutown;920005]Looks like someone read the writing on the wall. I had to chuckle when I read the news. The rational given was 'interest rates are low now'. Well, they were substantially lower than they are now a couple of years ago yet no action was taken then!

All in all it is a good business decision IMO, getting the issue resolved and moving on.

How much has been spent on legal fees so far?[QUOTE]

Last I heard, we (the residents) have spent over $700,000 for the developer's law suit.

[rubicon]

Villages Lake-Sumter Inc. (VLSI) financial plan for building TV allowed them to essentially finance it with residents' money and to profit handsomely while maintaining a continual flow of income in perpetuity. There was no question that the IRS inquiry carried merit because it was always clear what the requirements were to effect interest free bonds. The issue that no one seems to care about is what caused the District to deal in such a manner leaving residents exposed? I believe the IRS spelled it out clearly in their filings.

The issue now is all that matters and if the information is correct that the District is going to refinance with low interest rate bonds what does that mean for residents? Does VLSI have an obligations here? Many residents will chalk this up as good business but I pause and ask but for whom?

Cést la vie

[Goldwingnut]

The bonds in question are for the commercial areas NOT the residential areas that the residents are paying the development bonds on when they purchase a home. The bonds and the operating expended (i.e legal fees) for the commercial areas are a separate business interest and do not directly affect the residents. Note here I said "directly" as there is indirect benefit. Having used tax free bonds lowers the cost of development in the commercial areas and attracts more and better merchants to our area, of which we all benefit.
Ask yourself this, could or would our government have done as much good for the people of TV and the surrounding areas had it received the amount of money in question? My observations of government spending would say no.
While few of us are privy to the balance sheet of TV (myself included), I am pretty confident that they are trying to make the best business decisions they can. Having taken the time to read quite a few of the publicly available documents out of personal curiosity, my opinion is that the volumes that've been written represent a mountain of money in legal fees that is likely coming to the point of diminishing returns for TV. The government will of course continue spend a dollar to collect a dime on this matter.
The resident's money is not at risk here, only the developer's. If you have a problem with the developer making a profit don't live here. Sell your house and move. When you do sell your house, every penny of profit you make on it be sure you give it to the responsible party for that profit, the developer, or at the very least give it to charity and don't forget to pay the IRS the taxes on the profits.

[iaudit]

The bonds in question are for the commercial areas NOT the residential areas that the residents are paying the development bonds on when they purchase a home. The bonds and the operating expended (i.e legal fees) for the commercial areas are a separate business interest and do not directly affect the residents. Note here I said "directly" as there is indirect benefit. Having used tax free bonds lowers the cost of development in the commercial areas and attracts more and better merchants to our area, of which we all benefit.
Ask yourself this, could or would our government have done as much good for the people of TV and the surrounding areas had it received the amount of money in question? My observations of government spending would say no.
While few of us are privy to the balance sheet of TV (myself included), I am pretty confident that they are trying to make the best business decisions they can. Having taken the time to read quite a few of the publicly available documents out of personal curiosity, my opinion is that the volumes that've been written represent a mountain of money in legal fees that is likely coming to the point of diminishing returns for TV. The government will of course continue spend a dollar to collect a dime on this matter.
The resident's money is not at risk here, only the developer's. If you have a problem with the developer making a profit don't live here. Sell your house and move. When you do sell your house, every penny of profit you make on it be sure you give it to the responsible party for that profit, the developer, or at the very least give it to charity and don't forget to pay the IRS the taxes on the profits.

The legal fees associated with the IRS lawsuit are being paid with money from our amenity fees. The developer sold the recreation facilities to the central district for the right to collect amenity fees. The central district issued the tax free bonds in question to make this purchase. The resident's money is definitely at risk here

[Dr Winston O Boogie jr]

The bonds in question are for the commercial areas NOT the residential areas that the residents are paying the development bonds on when they purchase a home. The bonds and the operating expended (i.e legal fees) for the commercial areas are a separate business interest and do not directly affect the residents. Note here I said "directly" as there is indirect benefit. Having used tax free bonds lowers the cost of development in the commercial areas and attracts more and better merchants to our area, of which we all benefit.
Ask yourself this, could or would our government have done as much good for the people of TV and the surrounding areas had it received the amount of money in question? My observations of government spending would say no.
While few of us are privy to the balance sheet of TV (myself included), I am pretty confident that they are trying to make the best business decisions they can. Having taken the time to read quite a few of the publicly available documents out of personal curiosity, my opinion is that the volumes that've been written represent a mountain of money in legal fees that is likely coming to the point of diminishing returns for TV. The government will of course continue spend a dollar to collect a dime on this matter.
The resident's money is not at risk here, only the developer's. If you have a problem with the developer making a profit don't live here. Sell your house and move. When you do sell your house, every penny of profit you make on it be sure you give it to the responsible party for that profit, the developer, or at the very least give it to charity and don't forget to pay the IRS the taxes on the profits.

Excellent post. Good information.

[Bogie Shooter]

Bonds are not for the commercial areas..........see post #12.

[Mr.Kris]

Based on paragraph 4.1(e) of the Deed of Restrictions, it appears that, homeowners are liable through a continuing lien on their property.

Now there is a caveat here:

I have not read all deeds, but in the majority the use of the homeowners property as collateral appears in 4.1(e). Yours may cited in a different paragraph.