[Peachie]

Interesting...

http://www.orlandosentinel.com/commu...5008648.column

[jojo]

Peachie, This is interesting if a bit disconcerting. Would you post the link to the follow up article? Should spark some thoughtful responses from our TOTVers.

[tkret]

H-mmmmm

[Peachie]

I've sent another, PM, JoJo. There should be another article from the Orlando Sentinel in a few days and I'll try to find that and post it also. Perhaps if someone in this crowd receives the OS online, they'll post the link for the followup article.

[Shirleevee]

Peachie,

Ummm......very interesting. I'd like to see the follow up article. Thanks for posting.

Shirleevee

[Cassie325]

HHHmmmm....personally if the home owners don't mind then why should anyone else....just let us live in our bubble please!

[Peachie]

I hear you, Cassie, I love that bubble too. But carefully read the article which includes this:

If the IRS were to impose a different interpretation than in the past, bond buyers could end up having to fork over income tax on the interest from their investment, which they don't have to do now.

So who are these buyers? That isn't easy to discern. But administrators at the districts say some bonds are owned by Villages residents themselves

That could affect the size of bubble.... :dontknow:

[Cassie325]

But we PAY interest on the bond....who makes interest on theirs? Ours is almost paid in full....

Also why would it change the size of the bubble?? Bigger? Smaller?

[Peachie]

Cassie, if we also need to pay the IRS interest we would have less income to purchase/maintain our homes.

[Cassie325]

Peachie....this is going to get out of hand if that happens! The bond payment is on the TAX bill...this very confusing to me.....

Notice they said they will try to just make it go away quietly!

[Peachie]

Don't feel bad about the confusion, Cassie, :dontknow: .... even the IRS can't figure it out! ;D

[villages07]

This "inquisition" should not affect current Villagers directly.

The bond on a new house... the developer builds out the streets, sidewalks, etc and pays for it by issuing bonds. These bonds are bought by investors. These bonds are attractive to investors because they are (now) considered municipal bonds and the interest paid to the investor is tax free. If the IRS rules that the interest is not exempt from Federal Tax then the bonds might not be as attractive to investors to purchase. This might have the ripple effect of increasing the interest rate on future bonds to attract investors. This would affect future new home purchasers and is completely unrelated to current homeowners and their annual bond payment on their property tax bill.

Recreation bonds.... when an area is completed, the developer gradually sells the amenities in that area to the central CDD district. The Central CDD purchases the facilities by issuing bonds. The bonds are paid off by residents via a portion (about 60%) of their amenity fees. Same scenario as above....if the interest is not federally tax exempt, then future bonds might carry a heftier interest rate to attract investors which could lead to higher amenity fees.

All speculation as to future impacts. But, thanks for the link Peachie...something to keep an eye on.

[jojo]

Villages 07, As usual a factual and helpful response. I've told several folks that you are an authoritative source of info.

[samhass]

07, you impress me more every day.

[Niels]

Very well put Villages 07. :bigthumbsup:

I guess the only way this would affect people currently living in The Villages is if they had actually purchased these bonds as an investment. If the IRS determines that the interest is taxable, then the bonds will certainly go down in value and the investors would have to report the interest as taxable income. The article appears to indicate that some people currently living in TV owned some bonds but I would imagine it would be very few people.