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<p class="MsoNormal"><a name="_GoBack"></a><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Rich:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Why doesn’t the PC just personally guarantee the debt? That should resolve the bank’s issue. I recognize that may be more than what your client wants to do,
and he could get indemnification from the other members on the guarantee.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal" style="text-align:justify"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">Marcus J. Fry<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">Lyon, Weigand & Gustafson, P.S.
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">P.O. Box 1689
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Yakima, Washington 98907 <br>
Telephone: (509) 248-7220 <br>
Facsimile: (509) 575-1883 <o:p></o:p></span></p>
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<p class="MsoNormal" style="text-align:justify"><b><u><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1F497D">NOTICES:<o:p></o:p></span></u></b></p>
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function on your e-mail system) and then deleting the e-mail.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>J Richard McEntee, Jr.<br>
<b>Sent:</b> Friday, March 29, 2019 10:35 AM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> [WSBAPT] Excise tax question<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Hello <o:p></o:p></p>
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<p class="MsoNormal">A prospective client is a member with two others in an LLC. Each owns 1/3 of the member interests. The LLC owns a piece of real property that was financed with a hard money lender. The parties want to refinance the property with a conventional
loan. The prospective client is the only creditworthy member of the LLC. As such, the new lender is asking that the property be transferred to the PC’s name only. In this situation, it would seem that a transfer to one member of the LLC with a corresponding
assumption of debt will be considered payment to the other two members thus subjecting the transaction to excise tax as to the 2/3 debt forgiven. Am I correct? <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Now assuming, after the new loan, PC transfers the property back to the LLC, and the property is then/still subject to the deed of trust related to the conventional debt. Is excise tax due again? Is there a way to avoid excise tax on the
round trip from LLC to individual, then back to the LLC?<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">NOTE: apparently the new lender is on board with the deed back to the LLC.<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">All input is appreciated.<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Thank you <o:p></o:p></p>
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<p class="MsoNormal">Rich<o:p></o:p></p>
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<p class="MsoNormal"><b><u><span style="font-size:13.5pt;font-family:"Copperplate Gothic Bold","sans-serif";color:black">RICH McENTEE</span></u></b><span style="font-size:9.0pt;font-family:"Helvetica","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:13.5pt;font-family:"Copperplate Gothic Bold","sans-serif";color:black">McENTEE LAW OFFICE</span></b><span style="font-size:9.0pt;font-family:"Helvetica","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Copperplate","serif";color:black">3800 Bridgeport Way W, Ste A411</span><span style="font-family:"Helvetica","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Copperplate","serif";color:black">University Place, WA 98466</span><span style="font-family:"Helvetica","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Copperplate","serif";color:black">253.227.9894(m)</span><span style="font-family:"Helvetica","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Copperplate","serif";color:black"><a href="mailto:jrmcentee@gmail.com">jrmcentee@gmail.com</a></span><span style="font-size:9.0pt;font-family:"Helvetica","sans-serif";color:black"> <o:p></o:p></span></p>
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