[WSBAPT] Inherited vehicles- sales tax exemption

Wed Aug 28 12:02:14 PDT 2024

Yes, a Trust can own a vehicle

W. Jeff Davis

BELL & DAVIS PLLC

Attorneys at Law
P.O. Box 510

720 E. Washington Street, Suite 105
Sequim WA 98382
Phone: (360) 683.1129 
Fax: (360) 683.1258 
email:  <mailto:jeff at bellanddavispllc.com> jeff at bellanddavispllc.com
 <http://www.bellanddavispllc.com/> www.bellanddavispllc.com

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of michael westseattleattorney.com
Sent: Wednesday, August 28, 2024 12:00 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Inherited vehicles- sales tax exemption

Can Trust own the vehicle ?

  _____  

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 Joshua McKarcher <josh at mckarcherlaw.com <mailto:josh at mckarcherlaw.com> >
Sent: Wednesday, August 28, 2024 11:57 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] Inherited vehicles- sales tax exemption 

Yes, and the other reason I like to have GSST concept in my head is that if/when I see an expensive titled vehicle or RV, I (hope I remember to) suggest skipping to the next generation with that gift, if there is (as usual) plenty of GSST exemption available. Then we can prevent the “possible double-use-tax problem” if an older beneficiary is contemplated but has a “good child” who may be natural taker and who will let parent(s) use/enjoy the asset as needed without too much rigmarole. 

Joshua D. McKarcher

McKarcher Law PLLC

537 6th Street

Clarkston, WA 99403

(509) 758-3345

(509) 758-3314 (fax)

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

www.mckarcherlaw.com <http://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 Alexis Singletary <alexis at singletarylawoffice.com <mailto:alexis at singletarylawoffice.com> >
Sent: Wednesday, August 28, 2024 11:28:41 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >
Subject: [WSBAPT] Inherited vehicles- sales tax exemption 

Thank you all for the replies on and off list!  I appreciate the feedback and analyses.

It just is horrible that we have a father’s death in 2023 where RV goes to son, and then son dies in 2024 so the RV is being inherited by his heir; but since son didn’t pay sales/excise tax when he got the RV from his dad’s death, that now son’s heir gets to pay the $12,000 to transfer title.  (Hope that clarifies, Andrekita. 2 deaths with 2 inheritances, no lifetime gifts).

Yuck.  But, Josh, your GSTT below is a great way to analogize for my Heir who gets to come up with the $12,000 if he wants to keep the inherited RV.  We may sell it in the probate and give the Heir the proceeds instead.  

Best,

Alexis

__________________________

Alexis R. Singletary

Attorney at Law

Singletary Law Office, PLLC

(253) 833-8855

 <http://www.singletarylawoffice.com/> www.SingletaryLawOffice.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 Joshua McKarcher
Sent: Tuesday, August 27, 2024 10:09 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] Inherited vehicles- sales tax exemption

Yes, Alexis, it’s a bit “wild,” but consider it a loosely and certainly imperfect analogous “generation skipping transfer tax” 😉 on the second inheritance without an intervening sales/use tax payment.

As a lifelong Washington kid, when I encountered this rule the first time, I rationalized it by figuring (1) we have no income tax or (for the most part) lifetime gift tax, (2) titled vehicles are easy to monitor, value, and tax, (3) excise, use, and sales taxes are rigorously enforced in lieu of income tax, (4) each gift/inheritance of a titled vehicle is “robbing” the state of a sales- or use-taxed purchase of a vehicle, and so (5) it’s easy to justify (and implement mechanically) a policy by which we all get only “one tax-free transfer” of a titled vehicle ordinarily subject to sales/use tax upon transfer. 

Not that any of that helps you or your client in any way at all, except to try to understand “why” legislators might choose that option. 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 Andrekita Silva
Sent: Tuesday, August 27, 2024 12:04 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] Inherited vehicles- sales tax exemption

Law Office of F. Andrekita Silva 
_____________________________________________________________________________________

August 26, 2024

Alexis,

I ordinarily have the PR transfer the title directly to the beneficiary. Since it is inherited, they do not pay  sales tax.

If the beneficiary then tries to transfer it to a different beneficiary, then it is true, that second transfer will trigger sales tax.
A vehicle can only be gifted and/ or inherited ONCE.  For purposes of Dept. of License, they do not distinguish between receiving a GIFT or receiving an INHERITANCE.

If you do this twice in a row, the second transfer incurs a sales tax.

So, its not clear what you mean when you say that the RV was transferred to his son in 2023.
Do you mean the PR transferred the title into son's name?

If PR transferred the title into son's name in 2023, what is it that son is trying to do now?

Again, if son is trying to transfer title to a different beneficiary, that second transfer incurs an assessment of taxes.

Andrekita Silva 
Law Office of F. Andrekita Silva 
1325 Fourth Avenue, Suite 940 
Seattle, Washington 98101-2509 
206-224-8288 
ak at seattle-silvalaw.com <mailto:ak at seattle-silvalaw.com> 

On 2024-08-26 22:09, Alexis Singletary wrote: 

I have a Decedent who passed in 2024 but had inherited an RV from his
dad in 2023 - transfer all fine to son in 2023. No sales tax due since
inherited.  Now, Decedent’s heir ready to put the RV into his name
and Dept of Licensing wants about $12,000 in sales tax “because you
cannot transfer a vehicle without sales tax two times in a row.” 

I guess I have never experienced this in any probate and cannot seem
to put my hand on the cite. 

Thank you! 

Best, 

Alexis 

__________________________ 

Alexis R. Singletary 

_Attorney at Law_ 

Singletary Law Office, PLLC 

(253) 833-8855 

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

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