[WSBAPT] REET Question/Exemption

Tue Dec 27 22:30:06 PST 2022

Sorry, perhaps my email was unclear.  Borrower and Ex are both on title and
have been since the purchase.  Lender did not want Ex as a party to the loan
because of their credit but they are still on title and Lender allowed it.
Ex needs to be removed from title, which is triggering the filing of a
REETA.

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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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>
On Behalf Of Joshua McKarcher
Sent: Tuesday, December 27, 2022 7:36 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] REET Question/Exemption

What transaction is occurring that triggers the filing of a REETA at all? A
refinancing with cash out maybe? But is that effectuating a change in title?
It seems the title has always been in one name and is staying in that name. 

So I'm just unclear what change in title is occurring, as opposed to the
settlement of potential legal claims for contributions to equity or what
have you. If those trigger excise tax, then that is simply an occasion I've
not encountered. 

But whenever I've called the DOR line (the number to which is buried
somewhere on the gift supplement form) with an odd REETA situation, a very
smart and helpful agent has answered and given me a helpful analysis and
offered additional information such as what documentation would be required
to support the exemption in an audit. 

Best, Josh 

Joshua D. McKarcher

McKarcher Law PLLC

537 6th Street

Clarkston, WA 99403

(509) 758-3345

(509) 758-3314 (fax)

 <mailto:josh at mckarcherlaw.com> josh at mckarcherlaw.com

 <http://www.mckarcherlaw.com/> www.mckarcherlaw.com

  _____  

From: wsbapt-bounces at lists.wsbarppt.com
<mailto:wsbapt-bounces at lists.wsbarppt.com>
<wsbapt-bounces at lists.wsbarppt.com
<mailto:wsbapt-bounces at lists.wsbarppt.com> > on behalf of
msilver at wolfenet.com <mailto:msilver at wolfenet.com>  <msilver at wolfenet.com
<mailto:msilver at wolfenet.com> >
Sent: Tuesday, December 27, 2022 6:30 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com
<mailto:wsbapt at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] REET Question/Exemption 

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
<mailto:wsbapt-bounces at lists.wsbarppt.com>
<wsbapt-bounces at lists.wsbarppt.com
<mailto:wsbapt-bounces at lists.wsbarppt.com> > On Behalf Of
samuel at meylerlegal.com <mailto:samuel at meylerlegal.com> 
Sent: Tuesday, December 27, 2022 3:47 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com
<mailto:wsbarp at lists.wsbarppt.com> >; wsbapt at lists.wsbarppt.com
<mailto: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

NOTICE:

This electronic message contains information which may be Confidential or
Privileged and constitutes an electronic communication within the meaning of
the Electronic Communications Privacy Act 18 USC 2510. The information is
intended to be for the use of the individual or entity named above.  If you
are not the intended recipient, please be aware that any disclosure,
copying, distribution or use of the contents of this information is
prohibited.  If you received this transmission in error, please notify the
sender and delete the copy you received together with any attachments.
Thank you.

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