[WSBAPT] Sale of house to heir with credit for inheritance share - and REET

[Mark Anderson]

I am doing one exactly like that right now using two deeds.  The PR first executed and recorded a bargain and sale deed to 4 siblings as equal tenants-in-common.  This transaction was exempt from excise tax.  Then 3 of the 4 siblings executed and recorded a quitclaim deed of their individual interests to the 4th sibling in exchange for the 4th sibling paying each of them one quarter of the agreed-upon value of the property.

Note: we set out all the mechanics of this in a TEDRA agreement executed by everyone beforehand.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
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Tacoma, Washington 98402
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Lewis, Amy C.
Sent: 11/08/2023 8:08 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Sale of house to heir with credit for inheritance share - and REET

You could use two deeds.  One for 10% of the property as the inheritance and a second one for 90% for the sale.  The extra recording fee is probably worth it for clarity.



Amy Lewis, Attorney
Pronouns she/her/hers
[cid:image002.png at 01DA12FA.FB898A70]
909 A Street, Suite 600 | Tacoma, WA 98402
phone 253.572.4500 | fax 253.272.5732 | www.eisenhowerlaw.com<http://www.eisenhowerlaw.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 Eric Nelsen
Sent: Wednesday, November 8, 2023 5:06 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Sale of house to heir with credit for inheritance share - and REET

Estate sells house to an heir for defined Purchase Price of $500,000, and provides a credit of $50,000 against the Purchase Price as a partial distribution of inheritance.

What should Real Estate Excise Tax be calculated upon?


  1.  $450,000, because the consideration received is only that? BUT: Do the parties list $450,000 as the Purchase Price on the REET Affidavit, despite the prima facie specification of $500,000 as the Purchase Price? Or does escrow valiantly attempt to list $500,000 as the Purchase Price, list an exemption for $50,000 and cite the inheritance WAC and provide the proper documentation, and then cross fingers and pray it doesn't get screwed up?
  2.  $500,000, because it's better to pay more tax than it is the deal with the deed getting bounced because it looks funny to somebody at the recorder's office?

The form does seem to allow for a partial exemption, but I've never attempted it. Does it actually work?
[cid:image003.png at 01DA12FA.FB898A70]

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>


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