[Advogado]

Originally Posted by gomoho

If I am not mistaken the question about the value of the assests by the IRS has been resolved in favor of the developer - that he actually was paid less than they were worth at the time. I'm sure you'll correct me if I am wrong.

Since you asked, I will correct you. I am afraid you are mistaken, mislead by an article in the Daily Sun.

As confirmed by Janet Tutt, herself, when questioned at a POA meeting (and as later reported in the POA Bulletin): The valuation question has NOT been resolved. The under-payment calculation you cite was merely an argument made by the Center District's attorney in a letter to the IRS. The Daily Sun then reported his argument as fact, even though it has not been agreed to by the IRS. You can read the attorney's letter at districtgov.org.

Now, maybe the attorney's calculation will turn out to be right; I won't even try to get into the proper way to calculate an arm's-length price of a future income stream (which can be manipulated by using different discount rates). In any event, whatever I (or any of us) think about it really doesn't matter at this juncture) since the IRS is taking the position that the bonds would be taxable no matter what the valuation of the underlying assets sold to the Center Districts by the Developer.

The point is that, despite what the Daily Sun claimed, there is no publicly available information that the valuation question has been resolved in favor of the Developer/Center District. But to me the central thing that we should be watching is how this darn thing gets resolved, and trying to make sure that the resolution doesn't prejudice the residents. It is not easy to do this when our local paper either doesn't report, or distorts, the facts.

Morals regarding the above: (1) Be very skeptical l about what you read in the Daily Sun about the IRS investigation and about the Developer in general. (2) The POA Bulletin will be the most reliable source of information, but also look at the documents at districtgov.org. (3) Thank Lauren Ritchie of the Orlando Sentinel for keeping a spotlight on this (even though she gets some of her facts wrong).

[EdV]

Again for the record, it Does Not Matter what he was paid, with regard to the IRS matter at this point in time. You folks are really beating the death out of that poor horse!

[LndLocked]

Originally Posted by EdV

Again for the record, it Does Not Matter what he was paid, with regard to the IRS matter at this point in time. You folks are really beating the death out of that poor horse!

You are correct Ed ... for the purpose of determining if or not the district qualified / qualifies to sell "tax free" bonds per the determination by the IRS (and perhaps ultimately the court(s) ) as a "public" district is the heart of the matter.

Nor does it matter if or not TV residents like the current system of VCDD control. Because that is not pertinent to the issue for the same reason.


However, it should be of great interest to all TV landowners that "The Developer" was paid a fair and not inflated price for the amenity's purchased with these bonds. IF they were inflated, then a far greater % of amenity fee revenue is going to retiring the bonds than it should be. Resulting in less funding for upkeep and improvement.

[mickey100]

Originally Posted by Geewiz

Remember - this is Gary's structure. I assume when everything is done and if money is owed - he will pay. But, if not, everyone bury him in law suits. You can Litigate anyone for anything and win or lose the cost to Tv in reputation and the literal cost to handle each suit will be substantial. I assume he will figure all of this in and pay anything he owes. He's a smart gUy.

Wouldn't that be wonderful if he did pay. I have a feeling, though, he won't. Would love to be proven wrong. We'll see.

[manaboutown]

Originally Posted by mickey100

Wouldn't that be wonderful if he did pay. I have a feeling, though, he won't. Would love to be proven wrong. We'll see.

Aren't the central districts which are funded by Villagers amenities fees paying?

[LndLocked]

Originally Posted by Advogado

Since you asked, I will correct you. I am afraid you are mistaken, mislead by an article in the Daily Sun.

As confirmed by Janet Tutt, herself, when questioned at a POA meeting (and as later reported in the POA Bulletin): The valuation question has NOT been resolved. The under-payment calculation you cite was merely an argument made by the Center District's attorney in a letter to the IRS. The Daily Sun then reported his argument as fact, even though it has not been agreed to by the IRS. You can read the attorney's letter at districtgov.org.

Now, maybe the attorney's calculation will turn out to be right; I won't even try to get into the proper way to calculate an arm's-length price of a future income stream (which can be manipulated by using different discount rates). In any event, whatever I (or any of us) think about it really doesn't matter at this juncture) since the IRS is taking the position that the bonds would be taxable no matter what the valuation of the underlying assets sold to the Center Districts by the Developer.

The point is that, despite what the Daily Sun claimed, there is no publicly available information that the valuation question has been resolved in favor of the Developer/Center District. But to me the central thing that we should be watching is how this darn thing gets resolved, and trying to make sure that the resolution doesn't prejudice the residents. It is not easy to do this when our local paper either doesn't report, or distorts, the facts.

Morals regarding the above: (1) Be very skeptical l about what you read in the Daily Sun about the IRS investigation and about the Developer in general. (2) The POA Bulletin will be the most reliable source of information, but also look at the documents at districtgov.org. (3) Thank Lauren Ritchie of the Orlando Sentinel for keeping a spotlight on this (even though she gets some of her facts wrong).

Per a memo dated 6/12 Janet Tutt said the the IRS reviewed and changed it's earlier valuation and that TV landowners received a bargain.

http://www.districtgov.org/images/IR...%206.12.13.pdf

[Advogado]

Originally Posted by EdV

Again for the record, it Does Not Matter what he was paid, with regard to the IRS matter at this point in time. You folks are really beating the death out of that poor horse!

Per the second paragraph of my last post, I am in violent agreement with you. However, the validity of the purchase price is very relevant in other contexts, as evidenced by the class action suit against the Developer. Thus, if you will excuse the pun, equating it to a dead horse may be overkill.

[gomoho]

Originally Posted by LndLocked

Per a memo dated 6/12 Janet Tutt said the the IRS reviewed and changed it's earlier valuation and that TV landowners received a bargain.

http://www.districtgov.org/images/IR...%206.12.13.pdf

So.... propaganda or truth??? I don't know who to believe anymore.

[Geewiz]

I would like to thank the mod for deleting my post and the one I was responded to. I don't like me when I get nasty and it is my weakness that I will respond when baited. Again, all cheers to the mod.

[Advogado]

Originally Posted by LndLocked

Per a memo dated 6/12 Janet Tutt said the the IRS reviewed and changed it's earlier valuation and that TV landowners received a bargain.

http://www.districtgov.org/images/IR...%206.12.13.pdf

If you read that memo carefully, Ms. Tutt does not say that the IRS has agreed to the adjustments. I suspect that the matter is still not resolved, although I would be happy if it has been. Again, the only public document, of which I am aware, substantiating the "bargain" claim is the letter from the District's tax attorney to the IRS. I have seen no IRS reply to that letter. If one existed,it presumably would be on the districtgov.org website. Maybe somebody can ask Ms. Tutt about it at the POA meeting next week.

[downeaster]

I have followed this thread fairly closely with great interest. One item does not seem to have been discussed. That is the bondholders. There was some mention of mutual funds but nothing definite.

Is it possible to obtain the name (s) of bondholders?

Are we to believe mutual funds would invest blindly in tax free bonds without making certain they were valid?

Is it conceivable the bonds were purchased by a smaller entity? Maybe a private sale?

A lot of tax free money has been made by someone. Now are the bondholders are going to be told it wasn't tax free? Will they be liable to pay the tax along with penalties?

There have been many intelligent and thought provoking posts on this thread. I would like to hear your thoughts on my questions.

[nitehawk]

So whats the big deal----issue more bond to pay the ruling against the villages - and start all over again - let the residents buy them. call them kool aid coupon bonds

[Advogado]

Originally Posted by nitehawk

So whats the big deal----issue more bond to pay the ruling against the villages - and start all over again - let the residents buy them. call them kool aid coupon bonds

Why it's a big deal has already been explained numerous times in this thread, in the POA Bulletin, and in various newspaper (other than the Daily Sun) and magazine articles. It's nothing to joke about.

[EdV]

Originally Posted by Advogado

Per the second paragraph of my last post, I am in violent agreement with you. However, the validity of the purchase price is very relevant in other contexts, as evidenced by the class action suit against the Developer. Thus, if you will excuse the pun, equating it to a dead horse may be overkill.

I did not mean to imply that the manner in which the VCCDD spends the amenity funds is of no importance to the residents. Quite the contrary. If anything, that should be the subject of a separate thread topic.

I was simply trying to get us back on topic and focused on the direction that the IRS is headed with their investigation and what effect it might have on the residents of TV.

[Advogado]

Originally Posted by downeaster

I have followed this thread fairly closely with great interest. One item does not seem to have been discussed. That is the bondholders. There was some mention of mutual funds but nothing definite.

Is it possible to obtain the name (s) of bondholders?

Are we to believe mutual funds would invest blindly in tax free bonds without making certain they were valid?

Is it conceivable the bonds were purchased by a smaller entity? Maybe a private sale?

A lot of tax free money has been made by someone. Now are the bondholders are going to be told it wasn't tax free? Will they be liable to pay the tax along with penalties?

There have been many intelligent and thought provoking posts on this thread. I would like to hear your thoughts on my questions.

Here is a very interesting article that partially answers some of your questions:Billionaire Morse

It sets forth some very interesting information, of which I was not previously aware, e.g.:

At least $955 million of Morse�s fortune comes directly
from money paid to him from the issuance of tax-free municipal
bonds � including the bonds ruled taxable by the IRS, according
to data compiled by Bloomberg from an analysis of 38 bond-offering statements since 1992.

Wow, our tax dollars (or, more precisely, tax subsidies or loopholes) at work. It makes you think that Congress ought to be taking a close look at who, if anybody, should be able to issue tax-free bonds. Maybe there is something to be said for eliminating them altogether, an idea that is currently being kicked around in Congress.