California government has money and budget challenges – and is expected to crack down next year – for tax year 2012 – on property tax payers who have been taking the entire amount they pay (including Mello-Roos and special assessments) as deduction from California state income taxes.
Starting with 2012 tax bill (the one due in April 2013), the CA state Franchise Tax Board (re income tax) will require property owners to break down their property taxes into deductible and non-deductible portions.
So property owners who have been deducting their Mello-Roos fees and school bond fees paid (which are sometimes very large in amount) will no longer be able to deduct those or any other special assessments, such as vector control or mosquito abatement.
This change in policy by California Franchise Tax Board is important for some California property owners. Many home developments at South Orange County had public amenities paid through Mello-Roos bond districts.
Home and property owners will not be able to use these special assessment payments as CA state income tax deductions starting for this tax year 2012 – for California income tax filings starting January 1, 2013.
California property buyers and owners should consult with an experienced income tax professional or attorney about their own situation – possible CA income tax deductibility for buying and owning real estate in California.
This is for information only and not the providing of legal or tax services. If you are a California property buyer or owner, you should consult with an experienced income tax professional or attorney about your own situation – buying and owning real estate in California.
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