Mello Roos is depressing as hell

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<blockquote>



... Buying a home for 500K and 30 years later actually spending around 1.5M for it via interest is absurd.</blockquote>


so is your math... 500k loan at 5% is $466k in interest, not $1mil... take inflation, once a year extra payment and tax benefit in account that number is even lower...
 
To the person who started this thread I agree with you.

I do not understand why it is so much. I owned 2 homes one in Irvine

which about 7 years old I was first ownder and a 2nd home in CG.

The mello roos in Irvine much cheaper then the one in CG. I was told that

one point it was less in CG when they first started building but that raised becuase

CG wanted to all these things for the community. Like the clubs and stuff. It's not I can't afford

it's not that I don't want to pay it. But so much??? And I am not able to wrire it off on my taxes.

Insane and I can't believe you are understanding where this person in coming from. That is a lot of

extra cash each year. I don't care who are or how much money you have it still hurts. At least

let me write it off. What is funny that my place in Irvine the HOA is cheaper and the mello roos.

They decorate for Christmas and CG doesn't. My HOA has gone down in Irvine and they maintain

my front yard which CG does not. I am able to park cars out CG we can't. So I just want to defend this

person and yes there is someone who feels and understands your pain.
 
[quote author="matty" date=1231591191]To the person who started this thread I agree with you.

I do not understand why it is so much. I owned 2 homes one in Irvine

which about 7 years old I was first ownder and a 2nd home in CG.

The mello roos in Irvine much cheaper then the one in CG. I was told that

one point it was less in CG when they first started building but that raised becuase

CG wanted to all these things for the community. Like the clubs and stuff. It's not I can't afford

it's not that I don't want to pay it. But so much??? And I am not able to wrire it off on my taxes.

Insane and I can't believe you are understanding where this person in coming from. That is a lot of

extra cash each year. I don't care who are or how much money you have it still hurts. At least

let me write it off. What is funny that my place in Irvine the HOA is cheaper and the mello roos.

They decorate for Christmas and CG doesn't. My HOA has gone down in Irvine and they maintain

my front yard which CG does not. I am able to park cars out CG we can't. So I just want to defend this

person and yes there is someone who feels and understands your pain.</blockquote>


Someone on this board stated on an old posting that he/she checked with their CPA. Apparently many homeowners claim mello roos as a tax deduction and never get audited. I checked with my accountant yesterday too. He's an old timer and said the same thing, that he has never seen anyone get audited.



As long as the IRS doesn't crack down, then mello roos is a moot point as long as you have reserves. Just claim tax, mello roos, and interest at the end of the year.
 
[quote author="spclagent7" date=1231604859][quote author="matty" date=1231591191]To the person who started this thread I agree with you.

I do not understand why it is so much. I owned 2 homes one in Irvine

which about 7 years old I was first ownder and a 2nd home in CG.

The mello roos in Irvine much cheaper then the one in CG. I was told that

one point it was less in CG when they first started building but that raised becuase

CG wanted to all these things for the community. Like the clubs and stuff. It's not I can't afford

it's not that I don't want to pay it. But so much??? And I am not able to wrire it off on my taxes.

Insane and I can't believe you are understanding where this person in coming from. That is a lot of

extra cash each year. I don't care who are or how much money you have it still hurts. At least

let me write it off. What is funny that my place in Irvine the HOA is cheaper and the mello roos.

They decorate for Christmas and CG doesn't. My HOA has gone down in Irvine and they maintain

my front yard which CG does not. I am able to park cars out CG we can't. So I just want to defend this

person and yes there is someone who feels and understands your pain.</blockquote>


Someone on this board stated on an old posting that he/she checked with their CPA. Apparently many homeowners claim mello roos as a tax deduction and never get audited. I checked with my accountant yesterday too. He's an old timer and said the same thing, that he has never seen anyone get audited.



As long as the IRS doesn't crack down, then mello roos is a moot point as long as you have reserves. Just claim tax, mello roos, and interest at the end of the year.</blockquote>


The reason is if the IRS did crack down as they would have to do it to everyone consistently in the state of California since 1983 when the bill was passed by the state legislature(Probably not that far maybe last 7 years), and it would open such a can of worms for the IRS to determine who owed what and second go after those who did owe it was just too big of a task and the IRS has ignored it since its inception.
 
The IRS does not target Mellos Roos nor does the IRS ignore Mello Roos. If the amount deducted for property taxes falls outside the programmed flag amounts, the return will be reviewed and a CP2000 will be sent for evidence or adjustment. If the amount of property taxes is determined to be incorrect, the IRS will not ignore the error and will hold the taxpayer liable for the incorrect amount plus penalties and interest.

If a return is reviewed for reasons other than flagged property tax amounts, and the initial extra assessment is not paid immediately, chances are good the whole return will be audited and the non-deductible property tax amounts will be disallowed.



The IRS does not ignore any aspect of tax code.
 
[quote author="awgee" date=1231631579]The IRS does not target Mellos Roos nor does the IRS ignore Mello Roos. If the amount deducted for property taxes falls outside the programmed flag amounts, the return will be reviewed and a CP2000 will be sent for evidence or adjustment. If the amount of property taxes is determined to be incorrect, the IRS will not ignore the error and will hold the taxpayer liable for the incorrect amount plus penalties and interest.

If a return is reviewed for reasons other than flagged property tax amounts, and the initial extra assessment is not paid immediately, chances are good the whole return will be audited and the non-deductible property tax amounts will be disallowed.



The IRS does not ignore any aspect of tax code.</blockquote>




The IRS does not ignore any aspect of tax code. "I actually laughed out loud on that one"

.

I call BS as the IRS does not know and has never made a ruling on Mello Roos and what you can and can not write off on a CFD aka Mello Roos. Think maintenance of existing infrastructure and administration costs as among the few of those write offs. The CP20000 makes me think of the Doppler 2000 weather radar for ABC which only makes me start to think of Austin Powers. For the small amount that the IRS would get from someone not paying their mello roos portion of their tax is just not worth their time. And if the IRS did start to go after people for this small amount it would be a political nightmare that they do not want the bad exposure especially in this crappy economy. In the 17 years i have been selling new homes and being in the business i have never seen or heard of the IRS going after someone for not writing off Mello Roos. I am sure there is a case or 2 but nothing i would worry about. Now as an licensed agent i tell my clients you can not write mello roos off and you need to check with your CPA. I do not buy the IRS being that sophisticated as you state period. Hell it took them how many months to get the stimulus checks out and i doubt they are going to go after small peanuts by people who have been writing off Mello Roos since 1983. Sorry just don't buy it...
 
[quote author="OCCOBRA" date=1231860824][quote author="awgee" date=1231631579]The IRS does not target Mellos Roos nor does the IRS ignore Mello Roos. If the amount deducted for property taxes falls outside the programmed flag amounts, the return will be reviewed and a CP2000 will be sent for evidence or adjustment. If the amount of property taxes is determined to be incorrect, the IRS will not ignore the error and will hold the taxpayer liable for the incorrect amount plus penalties and interest.

If a return is reviewed for reasons other than flagged property tax amounts, and the initial extra assessment is not paid immediately, chances are good the whole return will be audited and the non-deductible property tax amounts will be disallowed.



The IRS does not ignore any aspect of tax code.</blockquote>




The IRS does not ignore any aspect of tax code. "I actually laughed out loud on that one"

.

I call BS as the IRS does not know and has never made a ruling on Mello Roos and what you can and can not write off on a CFD aka Mello Roos. Think maintenance of existing infrastructure and administration costs as among the few of those write offs. The CP20000 makes me think of the Doppler 2000 weather radar for ABC which only makes me start to think of Austin Powers. For the small amount that the IRS would get from someone not paying their mello roos portion of their tax is just not worth their time. And if the IRS did start to go after people for this small amount it would be a political nightmare that they do not want the bad exposure especially in this crappy economy. In the 17 years i have been selling new homes and being in the business i have never seen or heard of the IRS going after someone for not writing off Mello Roos. I am sure there is a case or 2 but nothing i would worry about. Now as an licensed agent i tell my clients you can not write mello roos off and you need to check with your CPA. I do not buy the IRS being that sophisticated as you state period. Hell it took them how many months to get the stimulus checks out (had to reprogram the computers for months on end) and i doubt they are going to go after small peanuts by people who have been writing off Mello Roos since 1983. Sorry just don't buy it...</blockquote>
 
[quote author="OCCOBRA" date=1231860980][quote author="OCCOBRA" date=1231860824][quote author="awgee" date=1231631579]The IRS does not target Mellos Roos nor does the IRS ignore Mello Roos. If the amount deducted for property taxes falls outside the programmed flag amounts, the return will be reviewed and a CP2000 will be sent for evidence or adjustment. If the amount of property taxes is determined to be incorrect, the IRS will not ignore the error and will hold the taxpayer liable for the incorrect amount plus penalties and interest.

If a return is reviewed for reasons other than flagged property tax amounts, and the initial extra assessment is not paid immediately, chances are good the whole return will be audited and the non-deductible property tax amounts will be disallowed.



The IRS does not ignore any aspect of tax code.</blockquote>




The IRS does not ignore any aspect of tax code. "I actually laughed out loud on that one"

.

I call BS as the IRS does not know and has never made a ruling on Mello Roos and what you can and can not write off on a CFD aka Mello Roos. Think maintenance of existing infrastructure and administration costs as among the few of those write offs. The CP20000 makes me think of the Doppler 2000 weather radar for ABC which only makes me start to think of Austin Powers. For the small amount that the IRS would get from someone not paying their mello roos portion of their tax is just not worth their time. And if the IRS did start to go after people for this small amount it would be a political nightmare that they do not want the bad exposure especially in this crappy economy. In the 17 years i have been selling new homes and being in the business i have never seen or heard of the IRS going after someone for not writing off Mello Roos. I am sure there is a case or 2 but nothing i would worry about. Now as an licensed agent i tell my clients you can not write mello roos off and you need to check with your CPA. I do not buy the IRS being that sophisticated as you state period. Hell it took them how many months to get the stimulus checks out (had to reprogram the computers for months on end) and i doubt they are going to go after small peanuts by people who have been writing off Mello Roos since 1983. Sorry just don't buy it...</blockquote></blockquote>


Just because the IRS does not have the capability to enforce every rule or provision for every single person, in the event you get caught, it is true the IRS is not simply going to ignore what the tax code says. I take the position if you're someone who breaks the rules or law and don't get caught, you are just lucky. It will bite you in the ass one way or another. But at the end, it's just about risk analysis and what you're willing to bear. These people you speak of have apparently been able to evade audits - good for them. Some of us may not be so lucky.
 
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