[WSBAPT] Excise tax and gift supplemental

[Marcus Fry]

The problem is that the gift statement is not truthful and could create IRS gift tax reporting issues.  I can see the IRS now, you filled out this form claiming that you were gifting the excess (difference between assessed and purchase price).  The response: "the county told me to complete it."

I get the point that the DOR's objective is to ensure that nothing additional is being given in consideration, but it should be use a sworn affidavit signed by the seller that he/she/they received nothing additional in consideration beyond the purchase price.  That is the plan I will take based upon Ms. Feeney's email.  The DOR should just adopt a form for this type of situation rather than asking for this nonsensical gift supplement.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Mike Winslow
Sent: Friday, April 24, 2020 9:43 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] Excise tax and gift supplemental

Yep. I ran into this with Skagit County Treasurer. This is all about preventing collusion to defraud the DOR and Counties of their excise tax revenue.

My issue was with a QCD to clear title. We recited consideration of $10.00. Treasurer said this is a sale for less than assessed value, even though the deed clearly recited it was to clear title.

The options were to prepare the Gift Supplement or a narrative about the reason for clearing title. I did the narrative with the reasons for clearing title. It was a stretch to have that approach approved, be the gift affidavit would have required going back to the Grantor. I signed the narrative as agent for the Grantee.

I expect that if you provide a broker's opinion showing the reduced value that could work, but that is probably more trouble than the gift affidavit.

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 Marcus Fry
Sent: Friday, April 24, 2020 8:57 AM
To: WSBA Probate & Trust Listserv (wsbapt at lists.wsbarppt.com)
Subject: [WSBAPT] Excise tax and gift supplemental

Arms-length negotiation of sale of real property.  Purchase price is less than excise tax.  County is requiring a gift supplement because purchase is below County tax assessed value.

This seems crazy.  Anyone experience this?

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.

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