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I don't interpret that paragraph of the code too literally - because almost every tax could be said to increase the value of the property assessed. A general assessment that makes the county a nicer place to live increases the value of the property. A general assessment that pays for road improvements, or better schools, or flood control, or a whole host of different things all could increase the value of the property. But that's not the point of this paragraph.

It's to keep from disguising an improvement to your property as a tax assessment, and trying to create a current tax deduction for what should be a capital improvement.

Thanks, Peter, that's exactly what I wanted to hear. I was thinking the same thing even as I was typing my previous responses, but I couldn't figure out what, then, was the intent of 164(c)(1). Now I understand your view of it, and I'm willing to take that view, and defend it, if it becomes necessary. (Not because the extra $ in deducting 100% of the Mello Roos is that much more, but because it's so much easier than trying to get the % due to interest every year. That's ridiculous.)

Thanks again,

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