Paying off Mello Roos

User Forum Topic
Submitted by paranoid on February 27, 2012 - 7:39pm

Interest rate is historic low now. MR in places like 4S ranch has a 40-year life, and has a rate close to 10% (my rough guestimate). MR can be increased by 2% every year. So my question is: is it worth it to pay off completely your MR now? This saves alot of money if you intend to stay for a long time. What do you guys think?

Submitted by flu on December 14, 2016 - 8:20am.

djc wrote:
plm wrote:
FlyerInHi wrote:
I think technically Mello Roos is not tax deductible. But people do it anyway.

I think there was come clarification by the IRS that the mello roos are tax deductible in response to something CA tried to do.

Reviving this old thread.

Anyone have further info on the above? This impacts me this tax year. :)

they already ruled on it...since 2012

http://www.bubbleinfo.com/2012/04/16/mel...

Submitted by plm on December 14, 2016 - 11:35am.

flu wrote:
djc wrote:
plm wrote:
FlyerInHi wrote:
I think technically Mello Roos is not tax deductible. But people do it anyway.

I think there was come clarification by the IRS that the mello roos are tax deductible in response to something CA tried to do.

Reviving this old thread.

Anyone have further info on the above? This impacts me this tax year. :)

they already ruled on it...since 2012

http://www.bubbleinfo.com/2012/04/16/mello-roos-is-deductible-now/

My interpretation from the ruling is that it can be deductible, doesn't mean that it is definitely deductible. Just that the State ruling mello roos as not deductible is wrong. That being said, I think it should be deductible but for most people it doesn't matter because of AMT.

Submitted by plm on December 14, 2016 - 11:48am.

Now that I think about it, I made a mistake with paying property tax. I thought that I should make both payments this year because fed income taxes could be lower next year so it would be a bigger benefit. But I forgot about AMT, so there is no benefit paying both payments this year. I should have only made the first payment this year because AMT may go away next year. I'm pretty bad with financial stuff.

Submitted by djc on December 18, 2016 - 11:08pm.

plm wrote:
flu wrote:
djc wrote:
plm wrote:
FlyerInHi wrote:
I think technically Mello Roos is not tax deductible. But people do it anyway.

I think there was come clarification by the IRS that the mello roos are tax deductible in response to something CA tried to do.

Reviving this old thread.

Anyone have further info on the above? This impacts me this tax year. :)

they already ruled on it...since 2012

http://www.bubbleinfo.com/2012/04/16/mello-roos-is-deductible-now/

My interpretation from the ruling is that it can be deductible, doesn't mean that it is definitely deductible. Just that the State ruling mello roos as not deductible is wrong. That being said, I think it should be deductible but for most people it doesn't matter because of AMT.

Doesn't AMT only kick in for high earners or is there something I'm missing?

Submitted by plm on December 19, 2016 - 10:09am.

djc wrote:
plm wrote:
flu wrote:
djc wrote:
plm wrote:
FlyerInHi wrote:
I think technically Mello Roos is not tax deductible. But people do it anyway.

I think there was come clarification by the IRS that the mello roos are tax deductible in response to something CA tried to do.

Reviving this old thread.

Anyone have further info on the above? This impacts me this tax year. :)

they already ruled on it...since 2012

http://www.bubbleinfo.com/2012/04/16/mello-roos-is-deductible-now/

My interpretation from the ruling is that it can be deductible, doesn't mean that it is definitely deductible. Just that the State ruling mello roos as not deductible is wrong. That being said, I think it should be deductible but for most people it doesn't matter because of AMT.

Doesn't AMT only kick in for high earners or is there something I'm missing?

I would guess AMT would start for upper middle class. Since your probably need at least an upper middle class income to buy properties with mello roos, I would guess most people would be affected by AMT. But if you are a high earner then you may already pay a high tax rate so AMT doesn't affect you.

Submitted by Escoguy on May 30, 2017 - 7:32pm.

Anyone who paid off Mello Roos have regrets?

Thoughts on doing this for a rental property?

Anyone do this CFD 6 in 4S Ranch?

Anyone do CFD 4 in 92078?

Thanks

Submitted by ocrenter on June 2, 2017 - 4:33am.

Escoguy wrote:
Anyone who paid off Mello Roos have regrets?

Thoughts on doing this for a rental property?

Anyone do this CFD 6 in 4S Ranch?

Anyone do CFD 4 in 92078?

Thanks

Paid off the MR 5 years ago.

No regrets at all. Especially when April and November roll around.

Submitted by Escoguy on June 2, 2017 - 10:15pm.

OC,

Thanks, pretty sure I'll do it.

Did you use to run a blog called housing inventory or something like that?

It shut down like 5 years ago but was pretty useful, used to read all the time.

Submitted by ahewitson on June 6, 2018 - 8:48pm.

So we just received our quote to pay off the Mello Roos for the Stonebridge Community and I'm totally floored. If we would have paid it off in 2011 when we bought it was about $51,000-$54,000 depending on when we did it in the year. It's now up to $68,000 (and change) to pay it off. What's more depressing is not only did it increase by $17,000 from when we could have paid it off but we've already paid about $40,000 over the last 7 years. Ugggg So when we stroke the check for $68K now it will be over $108,000 that we've paid into the fund. Neither of our 2 kids attend school in the Poway School District either so we're not even reaping the benefits/rewards. We just re-fi'd our home about 2 years ago to a 15 year fixed @ 3% so at least we'll have the house paid off sooner than originally planned and don't have any plans to move so I guess it was a sound investment to make the decision now to pay it off. Just a very painful choice to wait instead of paying it off 7 years ago.

Submitted by henrysd on June 6, 2018 - 10:05pm.

I just found out this site and it has good information on many Poway USD CFD bonds. It is public data in:
http://mycataxdata.com/docs/ContDisc.GOB...

Submitted by NeetaT on June 13, 2018 - 11:44am.

"Mello Roos"

Translation: ("Sacramento" / "San Diego" Government)

"We are angry that we cannot charge more than 1% of 80% of the accessed value of residential property for property tax purposes due to proposition 13. The private homeowner has made us so angry that we found a way to get around proposition 13. Our way of getting around proposition 13 is to deceive the homeowner by adding voter approved bonds, assessments, and Mello Roos to the homeowner's property tax bill. We don't care if the homeowner is on a fixed income. We want the extra money so that we can fund our overly generous pensions and provide us with large-frequent pay raises not to mention funding welfare programs".

Submitted by ucodegen on June 13, 2018 - 1:00pm.

henrysd wrote:
I just found out this site and it has good information on many Poway USD CFD bonds. It is public data in:
http://mycataxdata.com/docs/ContDisc.GOB_1617_Fn.pdf

Interesting data. I read through it, it includes how money was spent too.

Expenditures by object, pg 37 of PDF;
31.98% Certificated Salaries
14.29% Classified Salaries (support personnel, admin)
27.37% Employee Benefits
8.61% Other
8.56% Services and Other Operating Expenditures
5.53% Capital Outlay (buildings and improvement?)
3.46% Books and supplies (almost at the bottom?)
0.20% Other financing uses?

-That is a lot for benefits, not much for books and school supplies. Expenditure on 'Classified' salaries is also fairly large, particularly considering that a school might have over 30 teachers, but maybe 2 janitors, 1 part time electrician, 3 part time cafeteria staff.

You can track down the info on the bonds by the CUSIP number. Some searches require you to take the space out of the source number vs bond series. ie. you may need to search using "738850QA7" instead of "738850 QA7". For that one, I used 'municipalbonds.com':
http://www.municipalbonds.com/bonds/issu...
search link:
http://california.municipalbonds.com/res...

Just for 'giggles', I ran a google search on that CUSIP with the space in place, and ran across:
https://www.sfgcorpmarkets.com/cmc/finan...

Which is financial information for an insurance company. If you search the PDF for 738850, you will see Poway School Bonds.
Basically, an insurance companies takes your $1 and invests in tax free bonds. They eventually pays your $0.90 claim and pockets the $0.10 and all interest paid by the bond. Profiting from other people's money - nice gig if you can get it!

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