[WSBAPT] Exchange Agreement and Excise Tax

[Eric Nelsen]

Bryce, does that fly for an exchange agreement like this? This isn't a straight non-pro rata distribution; it's distributing the Estate's interest in real estate to the surviving spouse in exchange for the spouse transferring the spouse's interest in an investment account to the estate. So the distribution from the Estate to spouse is inheritance, but then the transfer from spouse to Estate isn't an inheritance...

Or is there some magic in the spouses holding "equal undivided interests as community property" in both assets that fits this into the rule?

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040



From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Bryce Dille
Sent: Thursday, December 10, 2015 4:21 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Exchange Agreement and Excise Tax

No tax see WAC 458-61A-202 (2)

This transmission contains confidential attorney-client communications and may not be disclosed to any person but the intended recipient(s).  If this matter is transmitted to you in error, please notify the sender immediately.

Bryce H. Dille
Campbell, Dille, Barnett & Smith,  PLLC
P.O. Box 488
Puyallup, WA  98371
Voice:  253.848.3513
Fax: 253.845.4941
bryced at cdb-law.com<mailto:bryced at cdb-law.com>

Business Entity Creation and Management
Business, Government and Tax Law
Real Estate and Land Use, Residential, Commercial and Condominium Development
Real Estate and Commercial Transactions & Closings, Including Performing Services as IRS Section 1031 Exchange Facilitator
Estate Planning, including Wills and Trusts, and Probate Administration
Representation Homeowners/Condominium Association Real Estate Developments
Real Property Foreclosures and Forfeitures

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Karin Treadwell
Sent: Thursday, December 10, 2015 3:47 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Exchange Agreement and Excise Tax

Listmates:

In the case where an estate and surviving spouse agree to distribute 100% of real property to the spouse and equivalent value from a joint investment account to the credit trust, is excise tax triggered on the real estate transfer?

The assumption here is that decedent's probate assets pass to a credit trust via a mandatory funding formula.  However, to preserve the basis step-up on the surviving spouse's death, the goal is to use the exchange agreement to get the real estate to the surviving spouse.

Isn't there consideration here -- taking the transaction out of the standard inheritance exemption?

Thanks for any input.

Karin
Karin S. Treadwell
Sayre Law Offices
1320 University St
Seattle WA 98101
(206) 625-0092



-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20151211/b107cbb6/attachment.html>