<HTML><HEAD>
<STYLE><!--
.hmmessage P
{
margin:0px;
padding:0px
}
body.hmmessage
{
font-size: 12pt;
font-family:Calibri
}
--></STYLE>
</HEAD>
<BODY class=hmmessage dir=ltr>
<DIV dir=ltr>
<DIV style="FONT-SIZE: 12pt; FONT-FAMILY: 'Calibri'; COLOR: #000000">
<DIV>If the client is the beneficiary sounds like you just do the deed as an
inheritance/gift, no debt on the property and the affidavit just cites the
inheritance/gift exemption and I don’t know why you would reference debt relief
in the affidavit. </DIV>
<DIV> </DIV>
<DIV>If client is not the beneficiary and is receiving cod then isn't
client transferring consideration by cancelling the debt, even though
there is no technical debt relief by the transfer because of absence of
encumbrance against the property?</DIV>
<DIV> </DIV>
<DIV>What I don’t see from the facts is why is the trust giving the client a
note each year? doesn’t the client owe the trust some rent for using its
1/2? Don’t you have to figure out what the balance between fair rent due
the trust and debt paid by the client for the trust’s 1/2 is to know whether and
how much cod there is, if any? </DIV>
<DIV> </DIV>
<DIV>If client is the bene, who cares, but if there are other bene’s then the
value of fmv 1/2 compared to 1/2 of expenses paid has to be figured out and that
answers the consideration question for the affidavit. Doesn’t it?
Make sense or am I missing something? </DIV>
<DIV
style='FONT-SIZE: small; TEXT-DECORATION: none; FONT-FAMILY: "Calibri"; FONT-WEIGHT: normal; COLOR: #000000; FONT-STYLE: normal; DISPLAY: inline'>
<DIV style="FONT: 10pt tahoma">
<DIV> </DIV>
<DIV style="BACKGROUND: #f5f5f5">
<DIV style="font-color: black"><B>From:</B> <A title=patrick@alsnorthwest.com
href="mailto:patrick@alsnorthwest.com">Patrick J. Galloway</A> </DIV>
<DIV><B>Sent:</B> Wednesday, May 18, 2016 2:58 PM</DIV>
<DIV><B>To:</B> <A title=wsbapt@lists.wsbarppt.com
href="mailto:wsbapt@lists.wsbarppt.com">WSBA Probate & Trust Listserv</A>
</DIV>
<DIV><B>Subject:</B> Re: [WSBAPT] RE Excise Tax question</DIV></DIV></DIV>
<DIV> </DIV></DIV>
<DIV
style='FONT-SIZE: small; TEXT-DECORATION: none; FONT-FAMILY: "Calibri"; FONT-WEIGHT: normal; COLOR: #000000; FONT-STYLE: normal; DISPLAY: inline'>
<DIV dir=ltr>This one has me curious. I am not sure I understand the fact
pattern or the estate planning strategy that was being implemented. Is there a
tax benefit that was gained from the promissory notes? Is this an attempt to
avoid claims of other beneficiaries of the trust? Is the client not a
beneficiary of the trust?
<DIV> </DIV>
<DIV>Can the trust simply make the distribution and dissolve? I am not sure why
you would need to pay REET on a gift/inheritance and what the benefit of making
the transfer for consideration is. Just looking for some education from the
group on this one.</DIV>
<DIV> </DIV>
<DIV>Thanks,<BR><BR>
<P class=ecxMsoNormal><STRONG><FONT color=#000000>Patrick J.
Galloway</FONT></STRONG></P>
<P class=ecxMsoNormal><FONT color=#000000>Advance Legal Services,
PLLC</FONT></P>
<P class=ecxMsoNormal><FONT color=#000000>8113 W. Quinault Ave. Suite
101</FONT></P>
<P class=ecxMsoNormal><FONT color=#000000>Kennewick, WA 99336</FONT></P>
<P class=ecxMsoNormal><FONT color=#000000></FONT> </P>
<P class=ecxMsoNormal><FONT color=#000000>(509) 851-7884</FONT></P>
<P class=ecxMsoNormal> </P>
<P class=ecxMsoNormal> <A href="http://www.alsnorthwest.com"
target=_blank>www.alsnorthwest.com</A></P>
<P class=ecxMsoNormal> </P>
<P class=ecxMsoNormal>This E-Mail message and any documentation accompanying
this transmission may contain privileged and/or confidential information
and is intended solely for the addressee(s) named above. If you are not
the intended addressee/recipient, you are hereby notified that any use of,
disclosure, copying, distribution, or reliance on the contents of this E-Mail
information is strictly prohibited and may result in legal action against
you. Please reply to the sender advising of the error in transmission and
immediately delete/destroy the message and any accompanying documents.
Thank you.</P>
<P class=ecxMsoNormal> </P>
<P class=Body
style="FONT-SIZE: 15px; COLOR: rgb(68,68,68); BACKGROUND-COLOR: rgb(255,255,255)">*_Important
Disclosures Regarding Email Communications_*</P>
<P class=Body
style="FONT-SIZE: 15px; COLOR: rgb(68,68,68); BACKGROUND-COLOR: rgb(255,255,255)">Advisory
services through Retirement Wealth Advisors, Inc., a SEC Registered Investment
Advisor. This Email is being sent by or on behalf of a Registered Investment
Advisor. It is intended exclusively for the individual or entity to which it is
addressed. This communication may contain information that is proprietary,
privileged, or confidential, or otherwise legally exempt from disclosure. If you
are not the named addressee, you are not authorized to read, print, retain, copy
or disseminate the Email or any part of it. If you have received this Email in
error, please notify the sender immediately by Email or fax, and destroy all
copies of this communication. Please be advised that you may conduct securities
transactions only by speaking directly with your Investment Advisor
Representative either by phone or in person. Requests for securities
transactions via email will not be executed by Retirement Wealth Advisors, Inc.
To help protect your privacy, we strongly suggest you avoid sending sensitive
information, such as account numbers and social security numbers via Email.<SPAN
style="LINE-HEIGHT: 21px"> </SPAN>Please be further advised that, pursuant
to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any
communication in this email is subject to regulatory, supervisory, and law
enforcement review.</P>
<DIV> </DIV><BR><BR>
<DIV>
<HR id=stopSpelling>
From: mike@winslegal.com<BR>To: wsbapt@lists.wsbarppt.com<BR>Date: Wed, 18 May
2016 14:06:27 -0700<BR>Subject: Re: [WSBAPT] RE Excise Tax question<BR><BR>
<STYLE><!--
.externalclass p.ecxmsonormal, .externalclass li.ecxmsonormal, .externalclass div.ecxmsonormal {
font-size:11.0pt;
font-family:"Calibri","sans-serif";
}
.externalclass a:link, .externalclass span.ecxmsohyperlink {
color:blue;
text-decoration:underline;
}
.externalclass span.ecxmsohyperlinkfollowed {
color:purple;
text-decoration:underline;
}
.externalclass span.ecxemailstyle17 {
font-family:"Calibri","sans-serif";
color:windowtext;
}
.externalclass span.ecxemailstyle18 {
font-family:"Calibri","sans-serif";
color:#1f497d;
}
.externalclass .ecxmsochpdefault {
font-size:10.0pt;
}
.externalclass div.ecxwordsection1 {
}
--></STYLE>
<DIV class=ecxWordSection1>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">Under the provisions of the
Real Estate Excise Tax rules the transfer of the interest is for <I>value</I>,
equal to the relief from debt, so would be subject to tax as a “sale”. If there
is remaining debt, that debt is not part of the consideration paid for the
transfer.</SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d"><A
href="http://app.leg.wa.gov/wac/default.aspx?cite=458-61A-102"
target=_blank>http://app.leg.wa.gov/wac/default.aspx?cite=458-61A-102</A></SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">see the definition of
<I>consideration<SPAN> </SPAN></I>and <I>sale</I>.</SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d"></SPAN> </P>
<DIV>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">Michael A. Winslow</SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">1204 Cleveland
Ave.</SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">Mount Vernon, WA
98273</SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">Ph. 360-336-3321</SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">Em.
Mike@winslegal.com</SPAN></P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d"></SPAN> </P>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d">This message is from an
attorney, so it’s confidential. If you are not the intended recipient, it’s too
late to stop reading this message, but you may not use it for any improper
purpose. Huge Disclaimer available upon request.</SPAN></P></DIV>
<P class=ecxMsoNormal><SPAN style="COLOR: #1f497d"></SPAN> </P>
<DIV>
<DIV
style="BORDER-TOP: #b5c4df 1pt solid; BORDER-RIGHT: medium none; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0in; PADDING-TOP: 3pt; PADDING-LEFT: 0in; BORDER-LEFT: medium none; PADDING-RIGHT: 0in">
<P class=ecxMsoNormal><B><SPAN
style='FONT-SIZE: 10pt; FONT-FAMILY: "Tahoma","sans-serif"'>From:</SPAN></B><SPAN
style='FONT-SIZE: 10pt; FONT-FAMILY: "Tahoma","sans-serif"'>
wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<B>On Behalf Of </B>Eden Rubenstein Toner<BR><B>Sent:</B> Wednesday, May 18,
2016 1:28 PM<BR><B>To:</B> WSBA PT list<BR><B>Subject:</B> [WSBAPT] RE Excise
Tax question</SPAN></P></DIV></DIV>
<P class=ecxMsoNormal> </P>
<P class=ecxMsoNormal>I’m trying to figure out the RE excise tax computation in
this situation: Client owns ½ interest in property. A testamentary
trust of which client is Trustee owns the other ½. There are no other
assets in the trust. Client occupies the property and has paid mortgage,
taxes, insurance and all expenses for many years, keeping track of all payments
and issuing a promissory note from the trust to client each year. The
trust is now indebted to client for more than the value of the trust’s interest
in the property. Client wants to deed the property from the trust to
client in full satisfaction of the debt, despite the fact that the debt is
greater than the value of the property.</P>
<P class=ecxMsoNormal>Questions—is tax due on the full amount of the debt being
satisfied, or just the actual amount satisfied? Does it matter that the
debt is not secured by the property? And if client continues to pay the
full amount of the mortgage, is half the outstanding mortgage value part of the
excise tax computation?</P>
<P class=ecxMsoNormal>Thank you in advance for any guidance.</P>
<P class=ecxMsoNormal>Eden</P>
<P class=ecxMsoNormal> </P>
<P class=ecxMsoNormal><I><SPAN
style='FONT-SIZE: 12pt; BORDER-TOP: windowtext 1pt; FONT-FAMILY: "Andalus","serif"; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in'>Eden
Rubenstein Toner</SPAN></I><SPAN
style="BORDER-TOP: windowtext 1pt; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in"></SPAN></P>
<P class=ecxMsoNormal><I><SPAN
style='FONT-SIZE: 10pt; BORDER-TOP: windowtext 1pt; FONT-FAMILY: "Andalus","serif"; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in'>Attorney
at Law</SPAN></I><SPAN
style="BORDER-TOP: windowtext 1pt; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in"></SPAN></P>
<P class=ecxMsoNormal><I><SPAN
style='FONT-SIZE: 9pt; BORDER-TOP: windowtext 1pt; FONT-FAMILY: "Andalus","serif"; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in'>1600-B
SW Dash Point Road, #163</SPAN></I><SPAN
style="BORDER-TOP: windowtext 1pt; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in"></SPAN></P>
<P class=ecxMsoNormal><I><SPAN
style='FONT-SIZE: 9pt; BORDER-TOP: windowtext 1pt; FONT-FAMILY: "Andalus","serif"; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in'>Federal
Way, WA 98023</SPAN></I><SPAN
style="BORDER-TOP: windowtext 1pt; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in"></SPAN></P>
<P class=ecxMsoNormal><I><SPAN
style='FONT-SIZE: 9pt; BORDER-TOP: windowtext 1pt; FONT-FAMILY: "Andalus","serif"; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in'>phone
206-953-4485</SPAN></I><SPAN
style="BORDER-TOP: windowtext 1pt; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in"></SPAN></P>
<P class=ecxMsoNormal><SPAN
style='FONT-SIZE: 9pt; BORDER-TOP: windowtext 1pt; FONT-FAMILY: "Andalus","serif"; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in'>
IMPORTANT: This e-mail message (and any attachments accompanying it) is intended
to be confidential, only for the use of the intended recipient(s). If you are
not the intended recipient, or if this message has been addressed to you in
error, please notify me by reply e-mail, and then destroy all copies of the
message and its attachments, if any. Your cooperation is greatly
appreciated. My email is not encrypted; if you have sensitive
information to transmit, please contact me before sending.</SPAN></P>
<P class=ecxMsoNormal><SPAN
style="BORDER-TOP: windowtext 1pt; BORDER-RIGHT: windowtext 1pt; BORDER-BOTTOM: windowtext 1pt; COLOR: black; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 0in; BORDER-LEFT: windowtext 1pt; PADDING-RIGHT: 0in"></SPAN> </P>
<P
class=ecxMsoNormal> </P></DIV><BR>_______________________________________________
WSBAPT mailing list WSBAPT@lists.wsbarppt.com
http://mailman.fsr.com/mailman/listinfo/wsbapt</DIV></DIV></DIV>
<P>
<HR>
_______________________________________________<BR>WSBAPT mailing
list<BR>WSBAPT@lists.wsbarppt.com<BR>http://mailman.fsr.com/mailman/listinfo/wsbapt</DIV></DIV></DIV></BODY></HTML>