[WSBAPT] Excise tax exemption question

[Marcus Fry]

Rich:
Setting aside issues of asset v. stock sale transaction and possible creditor issues, XYZ could deed 50% of the real estate out to your client (or you could first make ABC 50% shareholder of XYZ) as a mere change in identity (458-61A-211) and then sell ABC the other 50%.  I recognize that will be 3 deeds (XYZ to client, client to ABC, sale of XYZ 50% to ABC) and 3 recording fees, but only excise tax on the sale of 50%.  You could try to collapse those deeds into a single deed transaction where you are reciting all of this, but in my experience, county will not allow it.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Rich McEntee
Sent: Monday, November 16, 2020 9:03 AM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Excise tax exemption question

Good morning

This is a cross post from another listserve. Hopefully not too many already received it.

I am looking for a bit of guidance.

Client (an individual) is 100% owner of ABC corporation. Client is also owns 50% interest in XYZ corporation.

XYZ corporation owns real estate. XYZ corporation would like to sell/transfer its entire interest in real estate to ABC corporation. ABC corporation will pay fair market value to XYZ as part of the transfer. Is there a partial excise tax exemption available due to the fact that the client has an ownership position in each entity? The client is essentially buying 50% of the real estate from himself.

Thank you, in advance for your guidance.

Rich

RICH McENTEE
McENTEE LAW OFFICE
3800 Bridgeport Way W, Ste A411<x-apple-data-detectors://1/1>
University Place, WA 98466<x-apple-data-detectors://1/1>
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jrmcentee at gmail.com<mailto:jrmcentee at gmail.com>
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