A Mello-Roos District is an area where a special tax is imposed on those real property owners within a Community Facilities District. This district has chosen to seek public financing through the sale of bonds for the purpose of financing certain public improvements and services.
What does this all mean? I had a great email dialog with my tax account and he told me something very interesting. Here is our conversation that I am going to share with you. Now remember please seek advise of your tax professional when dealing with any tax questions. So here is his response to my email question.
Mello roos is not deductible. However, the county and mortgage companies include mello roos in the property tax bill so we do deduct it. The IRS wants the county and mortgage companies to break out the mello roos tax so we don’t deduct the mello roos. Currently, they IRS has been over ruled and the mortgage companies and the county do not have to break out the mello roos. We think that in the future the IRS will have their way and the mello roos will be detailed.
Does this help?