[WSBAPT] RE Excise Tax question

[Mike Winslow]

Under the provisions of the Real Estate Excise Tax rules the transfer of the
interest is for value, equal to the relief from debt, so would be subject to
tax as a “sale”. If there is remaining debt, that debt is not part of the
consideration paid for the transfer.
http://app.leg.wa.gov/wac/default.aspx?cite=458-61A-102
see the definition of consideration  and sale.
 
Michael A. Winslow
1204 Cleveland Ave.
Mount Vernon, WA 98273
Ph. 360-336-3321
Em. Mike at winslegal.com
 
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From: wsbapt-bounces at lists.wsbarppt.com
[mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eden Rubenstein
Toner
Sent: Wednesday, May 18, 2016 1:28 PM
To: WSBA PT list
Subject: [WSBAPT] RE Excise Tax question
 
I’m trying to figure out the RE excise tax computation in this situation:
Client owns ½ interest in property.  A testamentary trust of which client is
Trustee owns the other ½.  There are no other assets in the trust.  Client
occupies the property and has paid mortgage, taxes, insurance and all
expenses for many years, keeping track of all payments and issuing a
promissory note from the trust to client each year.  The trust is now
indebted to client for more than the value of the trust’s interest in the
property.  Client wants to deed the property from the trust to client in
full satisfaction of the debt, despite the fact that the debt is greater
than the value of the property.
Questions—is tax due on the full amount of the debt being satisfied, or just
the actual amount satisfied?  Does it matter that the debt is not secured by
the property?  And if client continues to pay the full amount of the
mortgage, is half the outstanding mortgage value part of the excise tax
computation?
Thank you in advance for any guidance.
Eden
 
Eden Rubenstein Toner
Attorney at Law
1600-B SW Dash Point Road, #163
Federal Way, WA 98023
phone 206-953-4485
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