Looking to relo to JAX - a few questions

[jrmutley]

I found something online a while ago that specifically said that CDD fees were tax deductible. I couldn't remember where I saw that...I just knew that I did. So, I did several searches again on the topic after seeing R1v3rRat's post.

Ugh...the source that I was remembering was an article written on CDD communities that appeared in some south Florida newspaper. I just tried to find it again to post the link, but couldn't locate it. However, I must now admit, that I was basing my opinion on something a non-expert newspaper reporter wrote...and the writer was not quoting any expert. Not exactly reassuring.

So, I decided to go to the source...the IRS' web site. There is nothing that specifically adresses CDD fees. But, the fees are billed as part of real estate taxes. Here is what the IRS says about the deductibility of real estate taxes:

"Deductible real estate taxes are generally any state, local, or foreign taxes on real property. They must be charged uniformly against all property in the jurisdiction and must be based on the assessed value."

Hmmm...it is that "based on assessed value" that now has me uneasy. In Oakleaf...and, I'm sure, most places...the CDD is a flat fee. Ours is around $1,600 for single family homes and something less for condos and townhomes, regardless of assessed values. That's the bad news.

The good news...if there is any...is that my real estate taxes appear as a single line item on my year-end morgage statement. So, an IRS agent would have to know to ask the specific question "Is any part of this amount not based on the assessed value"...or something like that. Without asking the question, they would never see the underlying detail.

I point this out because I do have some experience with IRS auditors. Let me state now that I am no tax expert. But, I am an accountant for a large construction company. We had an IRS audit a couple of years ago. In dealing with them...and discussing them with our outside accounting firm...it is obvious that they are understaffed, overworked, and, in a lot of cases, very inexperienced.

In any case, I now have several months to figure out how I might decide to handle this with my 2008 return. Yuck.

[R1v3rRat]

I'm building now in Jax, and IF I had CDD fee, I would claim themas a deduction..... I just wanted to make sure poeple know that it isn't 1000% a lock....thats all...

Good post jrmutley... RR

[mawipafl]

Originally Posted by jake786

hey all-
im a northerner (with dreams of moving south) who happened to stumble across this post. im absolutely floored by it. are these communities for real? My house cost over 600K and has zero of the ammenities that these have. Golf, tennis, schools, libraries, athletic facilities all built in? How are these so cheap? Are they really filled with families? I thought only elderly people lived in these!! Please tell me everything!! I want to move tomorrow!!! Also, to the OP where in VA are you? My company has a couple offices in VA, maybe I can move to the house you're leaving!!! haha thanks all

I'm chuckling, jake786, because I was a northerner who couldn't believe the prices here for houses in communities with all the ammenities. I'm gray-haired, but not elderly (yet :-), and I do live in one.

The RE taxes plus CDD fees (we don't have a separate HOA fee) are a bit more than our RE taxes in PA, but they're less than the taxes we found in NJ.

I'm not sure how all CDD (Community Development District) fees are calculated, but in my community they're fixed and based on curb length of your property not on the size of your house (ie, the width of your land such as 70', 80', 100' etc.) I say they're "fixed", but the CDD Board could decide to renegotiate the bonds, and they're supposed to have a finite end such as 30 years, but I'm realistic to know that won't really happen (ex. renegotiating the bonds would extend their life.)

Another part of the CDD fee for us is the maintenance and operation costs for our community. Other communities pay this in their HOA (Homeowners Association). This can, of course, change from year to year (currently I think we pay about $450 annually).

[theluggnut]

I appreciate the responses as I am now in the midst of securing a job which will help me decide where exactly I want to live. Thanks again.