[asilver]

I know this subject has probably been discussed before, but I want to hear from fellow TVer's about this topic, only from those of you who have had their 1040's done by professionals (CPAs, etc.) and thereby hopefully have the definitive answer.

The issue: The annual TV home bond payment consists of 2 parts, the actual bond, and the maintenance on the bond. Are either, or both parts of this payment deductible on your Federal income tax forms, - similar to your property taxes? I have dozens of neighbors who are directly opposite on this issue. If the answer is "No" to both parts of the bond payment, then ignore my follow-up questions:

A) If one or both parts of the bond payment are tax deductible, then on what tax schedule and under what subject line? Is it on the same schedule as the property tax deduction?

B) If the bond payment is tax deductible, what do I do if I paid off the bond in full in 2013 (the annual maintenance payment on the bond will still continue)? Can I deduct in one lump sum?

[dewilson58]

Originally Posted by asilver

I know this subject has probably been discussed before, but I want to hear from fellow TVer's about this topic, only from those of you who have had their 1040's done by professionals (CPAs, etc.) and thereby hopefully have the definitive answer.

The issue: The annual TV home bond payment consists of 2 parts, the actual bond, and the maintenance on the bond. Are either, or both parts of this payment deductible on your Federal income tax forms, - similar to your property taxes? I have dozens of neighbors who are directly opposite on this issue. If the answer is "No" to both parts of the bond payment, then ignore my follow-up questions:

A) If one or both parts of the bond payment are tax deductible, then on what tax schedule and under what subject line? Is it on the same schedule as the property tax deduction?

B) If the bond payment is tax deductible, what do I do if I paid off the bond in full in 2013 (the annual maintenance payment on the bond will still continue)? Can I deduct in one lump sum?

It's a question of: How aggressive you are.

[Bogie Shooter]

Aggression will lead to jail time!
Neither are deductible.

[mulligan]

There is no maintenance charge on the bond. The charge on your tax bill is your annual common area maintenance charge. The bond amount, principle and interest are NOT tax deductible.

[OBXNana]

Boogie Shooter you are correct. Just because it comes on your tax bill doesn't make it deductible.

[TrudyM]

Originally Posted by mulligan

There is no maintenance charge on the bond. The charge on your tax bill is your annual common area maintenance charge. The bond amount, principle and interest are NOT tax deductible.

Ok why is the interest not deductible? The principal if they consider it part of the home equity purchase but the interest. A portion of the bond payment (not the maintenance chge) is interest. If you include an amount in your home loan that provides enough to pay off the bond you can deduct the interest from that. Then when you are paying it separate why is the interest portion of the bond payment not deductible doesn't make sense to me.
The IRS site says "Qualified residence interest is interest you pay on a loan secured by your main home or a second home" The bond is secured by your home so why wouldn't the interest be deductible?
Personal credit interest isn't deductible but this seems like apples to apples with home loan(residential ) interest. Can someone explain it to me.

[graciegirl]

Just look at the item SEARCH in the tool bar above. Go there and type in Bond deductible and read all of the stuff that has already been written and then trust Bogie Shooter.

[TrudyM]

Originally Posted by graciegirl

Just look at the item SEARCH in the tool bar above. Go there and type in Bond deductible and read all of the stuff that has already been written and then trust Bogie Shooter.

Thanks Gracie. I was just thinking out loud,
I should have known Bogie Shooter and others would have more answers in here. Interest portion of bond payment tax deductible?
After reading it looks like the experts don't agree. It seems as a deductible tax no as it's non ad valorem item but the interest may be deductible as residential interest or may not depending on who is reading the tax law and how they interpet it. Great just great.

[laceylady]

Only ad valorem taxes are deductible. Neither the bond nor the maintenance fee are ad valorem taxes. Call your county tax assessor or read the tax laws. TOTV opinions are exactly that - opinions. You should not make important decisions without checking with the properties authorities.

[Bogie Shooter]

Originally Posted by graciegirl

Just look at the item SEARCH in the tool bar above. Go there and type in Bond deductible and read all of the stuff that has already been written and then trust Bogie Shooter.

Originally Posted by TrudyM

Thanks Gracie. I was just thinking out loud,
I should have known Bogie Shooter would have more answers in here. Interest portion of bond payment tax deductible?

Wait. Stop. I am only relating what came off the many other threads on this topic. In the past we had lawyer's and folks with tax knowledge tells us those items were not deductable. I asked my CPA last year, the the same questions and he agreed.

[Bogie Shooter]

Originally Posted by TrudyM

Ok why is the interest not deductible? The principal if they consider it part of the home equity purchase but the interest. A portion of the bond payment (not the maintenance chge) is interest. If you include an amount in your home loan that provides enough to pay off the bond you can deduct the interest from that. Then when you are paying it separate why is the interest portion of the bond payment not deductible doesn't make sense to me.
The IRS site says "Qualified residence interest is interest you pay on a loan secured by your main home or a second home" The bond is secured by your home so why wouldn't the interest be deductible?
Personal credit interest isn't deductible but this seems like apples to apples with home loan(residential ) interest. Can someone explain it to me.

I hope you are right.........I will file amended returns in a flash. Let us know when you determine that it is legal.

[Villageswimmer]

To be deductible, you should receive a Form 1098. I've never received one related to the bond. Has anyone else?

[TrudyM]

Originally Posted by Bogie Shooter

I hope you are right.........I will file amended returns in a flash. Let us know when you determine that it is legal.

I said it was logical. No one ever accused the IRS tax code as being logical. And those who can, do and those who can't work for the IRS or at least at the lower levels they save the brains for going after the big boys.

The following is a digression and feel free to ignore.
I have had the following happen.
Paid 4th quarter estimated taxes early in Mid December 1989 that were due on Jan 15th 1990 because we were going to be out of town when it was due. Came home to find an IRS notice for failure to file a return for the income this was on Feb 1st 1990 the return of course wasn't due until April 15th. 1990

Some clerk was tasked with checking the names and social security numbers on investment income reported matched. I at the time was a trustee for multiple trusts for other family members. Reports had ????? Family Trust, Gertrude Muramoto TTEE on them and an ein number. Now trusts have ein numbers don't even have the same number of digits as a social security number. The clerk looked up my social security number and transferred all the taxable income reported over to my personal social security number. I had of course paid the taxes on trust returns with the correct ein numbers.
Found out when they came to put a seizer notice on the door of my house.

Do I trust any answer from the clerks at the IRS NO..... Always ask for a supervisor and go as high as you can get.

[Bogie Shooter]

I ignored..................................

[gomoho]

So what we really need is someone who has used the bond deduction and been audited.
That should tell the story, but I would bet you a $1 no one has been audited that could speak to this.