[WSBAPT] REETA implications?

[David King]

Jeffrey-

If there are other assets in the estate that the same beneficiaries are
entitled to, you can exempt more than just 1/3 of the transaction as an
inheritance to the one who is retaining the property by distributing other
assets to the other heirs and greater percentage interest in the real
estate to the beneficiary who is retaining it.  If, however, the real
estate is the sole asset, only the portion that is an inheritance would be
exempt for REET purposes, and the remaining 2/3 of the transaction would be
subject to excise tax in my view.  Ultimately I'd try to use the remaining
assets to reduce the portion of the transaction subject to REET to its
lowest amount by distributing to the beneficiary who is keeping the real
estate's entire estate interest to them in the form of real estate, and the
non-real estate assets to the other beneficiaries if all are agreeable to
that.  If there are enough other assets so that the heir keeping the
property gets 70% of the property, then only 30% would be subject to
excise, if 60%, then 40% is subject to REET, etc, and that's a better net
result for everyone.  See WAC 458-61A-202 for details.

On Tue, Jun 19, 2018 at 4:13 PM, jeffrey winter <jdwinter at hotmail.com>
wrote:

> Listmates,
>
> 3 kids are inheriting real estate from a parent.  Initially, they wanted
> to sell it, but now the brother wants to buy out his siblings' interest in
> the property.  There is no debt on the property.  There are some bank
> accounts that might be used for nonprorata distribution purposes, but it's
> not clear that they are enough.
>
> If the three enter into a TEDRA agreement that provides for this
> transaction, will there nevertheless be excise tax due if money changes
> hands?
>
> Thanks in advance,
>
> Jeff Winter
> Jeffrey D. Winter, P.S.
> 604 N. Main Street
> Ellensburg, WA 98926
>
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-- 
David M. King, Attorney
Sound Advocates Law Group PLLC
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Seattle, WA 98102
Phone: 206-420-8710
Fax: 206-973-3034


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