Property tax

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irvinehusky

irvinehusky

New member
I was starting to work on my taxes so I was trying to figure out the part of my property tax that I could deduct (legally).  I figured out that part so that is o.k.  But, while I was doing that, I noticed that my total property tax was a little (o.k., not so little for me) lower than I was expecting.  I purchased in the latter half of 2011 so the copy of the last year's property tax bill was for the previous owner so I didn't really give that one much thought.  Fortunately, my property tax was assessed lower than the previous owner so due to all the differences, I didn't take a close look at the previous bill. 

There's one called "1915 AD BOND L0" that went down quite a bit, like over $2K from the previous year.  There's a number next to that entry on the tax bill to call regarding it but just in case it's a mistake in my favor, I didn't want to call them just yet.  :D  I don't know if this entry is in all Irvine homeowners' tax bill but did anyone else see a drop in their property tax bill due to this particular entry?  Is this a one year thing or permanent (hopefully) change?

Thank you for your help.
 
From what I remember, the 1915 bond is actually a big part of the Mello Roos tax but there was some reduction in either Woodbury or Stonegate for MRs which could be that bond.

You might want to call that number next to it to find out what happened.
 
Thank you.

I guess I'll call them when I have time.  But just in case, maybe I should tell them my name is Lennay Kekua?  :P

irvinehomeowner said:
From what I remember, the 1915 bond is actually a big part of the Mello Roos tax but there was some reduction in either Woodbury or Stonegate for MRs which could be that bond.

You might want to call that number next to it to find out what happened.
Click to expand...
 
The 1915 bond is not a part of a Mello Roos bond.
Each is a different line item that shows up on your property tax bill.
(Some properties have more than one MR bond, and an additional 1915 bond).

Each different line item will have a different structure and possibly different maturity/expiration dates.

Congratulations, as I doubt that the omission is a tax error.  :-)

-IR2
 
IrvineRealtor is correct... technically 1915 is not the same as Mello Roos... but the two bonds are often clumped together under the general term "Mello Roos tax".

Most real estate marketing uses "Mello Roos" as the catch-all term (even Redfin says "Has Mello-Roos Tax"), but interestingly enough, in many of the tax records I've looked at, the 1915 bond is the higher amount (sometimes double).

Here is an example on how they are differentiated on tax bills:
Code: 
R4	MELLO-ROOS R4	
VN	1915 AD BOND VN

Most of the new Irvine homes I have seen have both on their tax bills.

The general term "Mello-Roos" should be replaced by "Special Assessments"... but I doubt that will happen.
 
if CA says it is following IRS regs, then mello roos is still not deductible in CA.

here is an excerpt:

"In a letter dated Feb. 6, an IRS associate chief counsel said the Internal Revenue code does not explicitly say real estate taxes must be ad valorem to be deductible. It says taxes that are not ad valorem could be deductible "if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority's jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges)."

it is clear that all MR bonds are not set at a certain rate by the county, and the benefits are in fact local (local infrastructure).


 
qwerty said:
if CA says it is following IRS regs, then mello roos is still not deductible in CA.

here is an excerpt:

"In a letter dated Feb. 6, an IRS associate chief counsel said the Internal Revenue code does not explicitly say real estate taxes must be ad valorem to be deductible. It says taxes that are not ad valorem could be deductible "if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority's jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges)."

it is clear that all MR bonds are not set at a certain rate by the county, and the benefits are in fact local (local infrastructure).
Click to expand...

All the interpretations online seems to indicate the opposite, that the IRS does allow for mello roos to be deducted but the FTB wanted to change.  Then, the course was reversed last year. 

I think the tax authority does not necessary mean a county level...mello roos are levied by special community tax districts.  Thus as long as the tax is uniform within the community tax district, it is deductible.
 
Irvinecommuter said:
qwerty said:
if CA says it is following IRS regs, then mello roos is still not deductible in CA.

here is an excerpt:

"In a letter dated Feb. 6, an IRS associate chief counsel said the Internal Revenue code does not explicitly say real estate taxes must be ad valorem to be deductible. It says taxes that are not ad valorem could be deductible "if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority's jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges)."

it is clear that all MR bonds are not set at a certain rate by the county, and the benefits are in fact local (local infrastructure).
Click to expand...

All the interpretations online seems to indicate the opposite, that the IRS does allow for mello roos to be deducted but the FTB wanted to change.  Then, the course was reversed last year. 

I think the tax authority does not necessary mean a county level...mello roos are levied by special community tax districts.  Thus as long as the tax is uniform within the community tax district, it is deductible.
Click to expand...

i guess we must be reading separate things because everything i have ever read has indicated that the IRS does not allow for deduction (except for certain things).

ok, assuming you are right and that the community itself is considered a district, i dont think the mello roos taxes are uniform because they are based on square footage and not a % of the price or anything.

what i think they should do with mello roos is allow you to deduct the interest and capitalize as part of the basis of the home the principal component that you pay while you are the owner of the house since in theory the bond is paying for capital improvements to the neighborhood
 
qwerty said:
Irvinecommuter said:
qwerty said:
if CA says it is following IRS regs, then mello roos is still not deductible in CA.

here is an excerpt:

"In a letter dated Feb. 6, an IRS associate chief counsel said the Internal Revenue code does not explicitly say real estate taxes must be ad valorem to be deductible. It says taxes that are not ad valorem could be deductible "if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority's jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges)."

it is clear that all MR bonds are not set at a certain rate by the county, and the benefits are in fact local (local infrastructure).
Click to expand...

All the interpretations online seems to indicate the opposite, that the IRS does allow for mello roos to be deducted but the FTB wanted to change.  Then, the course was reversed last year. 

I think the tax authority does not necessary mean a county level...mello roos are levied by special community tax districts.  Thus as long as the tax is uniform within the community tax district, it is deductible.
Click to expand...

i guess we must be reading separate things because everything i have ever read has indicated that the IRS does not allow for deduction (except for certain things).

ok, assuming you are right and that the community itself is considered a district, i dont think the mello roos taxes are uniform because they are based on square footage and not a % of the price or anything.

what i think they should do with mello roos is allow you to deduct the interest and capitalize as part of the basis of the home the principal component that you pay while you are the owner of the house since in theory the bond is paying for capital improvements to the neighborhood
Click to expand...

It doesn't have to be a percentage of the price (ad valorem)...it just has to be uniform.  So if the tax district decides that every square foot is a certain amount then, it is uniform. 

I don't see why mello roos should be treated any differently than any other property tax levied...it has essentially the same effect...just a smaller scope.
 
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