1992-216 - Laserfiche WebLink

Home Browse Search

TAX EXEMPTION Federal Income Tax Matters On the date of delivery of the Series 1992 Bonds, Rhoads & Sinon, Boca Raton, Florida, Bond Counsel, will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, interest on the Series 1992 Bonds is excluded from gross income for purposes of federal income taxation and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, but that in the case of corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinion summarized in the preceding paragraph is subject to the condition that the County comply with all requirements of the Internal Revenue Code of 1986, as amended, and applicable regulations promulgated with respect thereto (the "Code"), that must be satisfied subsequent to the issuance of the Series 1992 Bonds in order that the interest thereon be and continue to be excluded from gross income for federal income tax purposes. The County has covenanted to comply with all such requirements, which include, inter alia, restrictions upon the yield at which proceeds of the Series 1992 Bonds and other money held for the payment of the Series 1992 Bonds and deemed "proceeds" thereof may be invested and the requirement to calculate and rebate any arbitrage that may be generated with respect to investment attributable to the Series 1992 Bonds. Failure to comply with such requirements could cause the interest on the Series 1992 Bonds to be included in gross income retroactive to the date of issuance of the Series 1992 Bonds. Ownership of the Series 1992 Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, certain Subchapter S corporations with substantial passive income and Subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Series 1992 Bonds. Bond Counsel will express no opinion as to such collateral tax consequences, and prospective purchasers of the Series 1992 Bonds should consult their tax advisors. The County has covenanted, and will issue its certificate to the effect, that on the basis of the facts, estimates and circumstances in existence on the date of delivery of the Series 1992 Bonds, the proceeds of the Series 1992 Bonds will not be used in a manner that would cause the Series 1992 Bonds to be or become "arbitrage bonds". In the opinion of Bond Counsel, based upon the facts, estimates and circumstances set forth in said certificate, the Series 1992 Bonds are not presently "arbitrage bonds" under existing statutes, regulations and decisions. No representation is made or can be made by the County or any other party associated with the issuance of the Series 1992 Bonds as to whether or not any legislation now or hereafter introduced and enacted will be applied retroactively so as to subject interest on the Series 1992 Bonds to inclusion in gross income for Federal income tax purposes or so as to otherwise affect the marketability or market value of the Series 1992 Bonds. Enactment of any legislation that subjects the interest on the Series 1992 Bonds to inclusion in gross income for federal income lax purposes or otherwise imposes taxation on the Series 1992 Bonds or the interest paid thereon may have an adverse effect on the market value or marketability. Florida Tax Matters On the date of delivery of the Series 1992 Bonds, Bond Counsel will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, the Series 1992 Bonds and the income 12