[WSBAPT] REET Question/Exemption

msilver at wolfenet.com msilver at wolfenet.com
Tue Dec 27 17:15:44 PST 2022


Do you think this is it?

WAC 458-61A-204

 

.5) The sale of an interest in real property from one or more joint tenants
or tenants in common to remaining tenants or to a third party is a taxable
transaction. The taxable amount of the sale is the total of the following:

(a) Any consideration given; and

(b) Any consideration promised to be given, including the amount of any debt
remaining unpaid on the property at the time of sale multiplied by that
fraction of interest in the real property being sold.

 

 

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>
On Behalf Of samuel at meylerlegal.com
Sent: Tuesday, December 27, 2022 3:47 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>;
wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] REET Question/Exemption

 

Listmates,

 

Co-habitants go on title of property together but only one of them
("Borrower") is liable on the note due to the lender.  Borrower makes
payments on the loan directly while the other co-habitant ("Ex") makes
payments to the Borrower for half of the loan payment.  There is nothing in
writing expressly stating that Ex is indebted to Borrower for 50% of the
mortgage payment, but that is essentially what Ex pays to borrower for
several years.  

 

Borrower and Ex call it quits and wish to remove Ex from title.  There is
some equity in the property now.  Borrower is willing to pay Ex 50% of the
equity value and excise tax would be due on that amount.  I am questioning
whether excise tax should also be due on 50% of the underlying debt given
that the Ex was never personally liable on the note due to the bank.  It
could appear to someone as though Ex was liable to Borrower for half the
mortgage and has now been relieved of that liability.  

 

Have you dealt with this before?  Would excise tax only be due on the value
of the equity that Borrower pays Ex for?  What exemptions apply?  Thanks for
the input.

 

Sam

 

 

Samuel M. Meyler

Meyler Legal, PLLC 

1700 Westlake Ave. N., Ste. 200

Seattle, Washington 98109

Tel:  206.876.7770

Fax:  206.876.7771

Email:   <mailto:samuel at meylerlegal.com> samuel at meylerlegal.com

  

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