[WSBAPT] Real Excise tax question

[Mike Winslow]

I think this is the correct WAC citation, but you will need to report the
consideration as "gift".
 
The husband will remain legally liable on the debt, so there is no monetary
consideration and no relief from debt. I would attach a narrative that
explains the circumstances of loan, decree and transfer (eg. That H and W
are borrowers under loan, that W was awarded property pursuant to decree of
dissolution subject to a lien for equity in H, that H has elected to forgo
the benefit of the decree of dissolution and release his interest in
property to W and recites that the H remains liable on the loan).
 
If this were a Skagit County transaction, I would not recite that the W has
been making 100% of the payments. Our Treasurer's clerk that reviews the
REETAS can be a stickler, so would not volunteer that the W is making all
the payments. The treasure might decide that the H is being "relieved of the
debt" , thus tax due (which is not technically the case).
Have W sign under penalty of perjury.
 
The alternative is to amend the decree, which seems unnecessary. 
 
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 Margaret Delp
Sent: Wednesday, May 18, 2016 4:34 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Real Excise tax question
 
Hello everyone:
H and W divorce one year ago.  Divorce decree awards Property to H, but
states that if H cannot refinance, the Property will be sold with the
proceeds split between H and W.  Property is titled in both names, mortgage
is in both names.
 
For the past year (post-divorce), W has made all mortgage payments - they
never refinanced.  Now, H decides to quit claim house to W and to let her
sell and take all proceeds from sale of property.  Since the quit claim deed
is not pursuant to a decree of dissolution, W is told by the county that she
needs to fill out Supplemental Excise Tax affidavit.
 
My question - since W has been making all the mortgage payments for the past
year and will continue to make the payments, is the transfer excise tax
exempt? (In other words, can she check box on the Supplement "2.B.3: Grantee
has made and will continue to make 100% of the payments on total debt of
___")?  It seems like the facts of H and W fit with the example in the
regulations at WAC 458-61A-201(6)(c)(vii), correct?
 
Thanks!
--
Law Office of Margaret Delp
2815 Howard Road, Second Floor
P.O. Box 292
Langley, WA 98260
(360) 579-4530 (telephone)
(360) 512-3114 (facsimile)
 
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