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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060">Thanks to all who answered my question about whether Washington estate tax is owed on out of state real property owned in a Washington resident’s LLC. I don’t
like the answer, but it’s good to know the answer. </span><span style="font-size:12.0pt;font-family:"Segoe UI Emoji",sans-serif;color:#002060">😊</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="color:#1F497D">The Law Office of G. Michael Zeno, Jr., P.S.<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="color:#1F497D">T: (425) 947-8050 F: (425) 947-8052<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">135 Lake Street S., Suite 257<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Kirkland, WA 98033<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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Thank you.<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><span style="color:#C00000">IRS Circular 230 Disclaimer:</span></b><span style="color:gray"> Any tax advice provided in this communication (including attachments) is not intended
or written to be used, and it cannot be used, by the recipient or any other taxpayer (i) for the purpose of avoiding penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership
or other entity, investment plan, arrangement or other transaction. You should seek advice based on your particular circumstances from an independent tax advisor.<o:p></o:p></span></p>
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<p class="MsoNormal"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Philip N. Jones<br>
<b>Sent:</b> Wednesday, March 23, 2022 4:44 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <wsbapt@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBAPT] Washington inheritance tax question<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">I vote with Heather. Washington changed their policy a few years ago, and they now treat LLC interests as intangible property. You probably want to get the non-Washington parcels out of the LLC, depending on the estate tax laws of the
state(s) where the property is located. <o:p></o:p></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt">Phil Jones<o:p></o:p></p>
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<p class="MsoNormal">Philip N. Jones <o:p></o:p></p>
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<p class="MsoNormal">Duffy Kekel LLP<o:p></o:p></p>
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<p class="MsoNormal">Portland, OR<o:p></o:p></p>
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<p class="MsoNormal"><a href="mailto:pjones@duffykekel.com">pjones@duffykekel.com</a><o:p></o:p></p>
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<p class="MsoNormal">(503) 853-1482 cell<o:p></o:p></p>
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<p class="MsoNormal"><br>
<br>
<o:p></o:p></p>
<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<p class="MsoNormal" style="margin-bottom:12.0pt">On Mar 23, 2022, at 8:57 AM, Heather de Vrieze <<a href="mailto:heatherd@westseattlelaw.com">heatherd@westseattlelaw.com</a>> wrote:<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Mike,</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">I’m not seeing anyone having already responded, so I’ll give you my understanding.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">First, Washington’s has an estate tax, not an inheritance tax, and real property outside the state of Washington will result in a pro-rata reduction of the tax due, but, being converted to an intangible asset
by being in the LLC will eliminate that reduction.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">I also wonder why multiple properties in and out of Washington are held in one LLC. That would seem to defeat the purpose of the LLC. Generally, it will not eliminate liability, but limit liability of an LLC
to the assets of within that particular LLC.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Heather</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt"> </span><o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Vladimir Script";color:#1F497D">Heather S. de Vrieze</span><b><span style="font-size:16.0pt;color:#1F497D"><br>
</span></b><i><span style="font-family:"Garamond",serif;color:#1F497D">Attorney-at-Law</span></i><o:p></o:p></p>
<p class="MsoNormal"><i><span style="font-family:"Garamond",serif;color:#1F497D"><img border="0" width="190" height="105" style="width:1.975in;height:1.0916in" id="Picture_x0020_1" src="cid:image001.jpg@01D83F71.FEA63770"></span></i><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">3909 California Avenue SW</span><span style="color:#44524E"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">Seattle, WA 98116-3705
</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">(206)938-5500
</span><o:p></o:p></p>
<p class="MsoNormal"><a href="mailto:heatherd@westseattlelaw.com"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">heatherd@westseattlelaw.com</span></a><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">
</span><o:p></o:p></p>
<p class="MsoNormal"><a href="https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.westseattlelaw.com%2F&data=04%7C01%7Cpjones%40duffykekel.com%7C84d8537be1d843585c9808da0ce5c385%7C2d66ed5354fa4c2f8c4dbff1aca5479d%7C0%7C0%7C637836478231761369%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0&sdata=4kIZeAE%2Br7zYZ8s8AAf3AnZWE2R49cMxvNXxLGtXCUs%3D&reserved=0"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">www.westseattlelaw.com</span></a><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">
</span><o:p></o:p></p>
<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Arial",sans-serif;color:#002E8A">Click here to connect with de Vrieze | Carney on Facebook:
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<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Mike Zeno<br>
<b>Sent:</b> Tuesday, March 22, 2022 11:35 AM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> [WSBAPT] Washington inheritance tax question<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060">I am wondering if I am analyzing this correctly:</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060">Client and spouse are Washington residents and sole members of an LLC. The only assets of the LLC are real properties, some in Washington and some out of
state. Question is whether the value of the out-of-state properties would be subject to Washington inheritance tax.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060">Different heirs will receive difference properties. I would expect the properties to be distributed in kind rather than sold.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060">The first question is whether the entire membership interest in the LLC would be considered intangible property, and so the value of all the properties in
the LLC (both in state and out of state properties) would be subject to Washington tax.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060">The second question is whether the answer to the first question is unimportant if the LLC is dissolved and the properties distributed to the appropriate heirs,
because Washington’s inheritance tax is figure on the value of what is inherited and not on the value of the estate. I think the answer to the second question is yes, but I am interested in what others think.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060">Mike Zeno</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#002060"> </span><o:p></o:p></p>
<p class="MsoNormal"><b><span style="color:#1F497D">The Law Office of G. Michael Zeno, Jr., P.S.</span></b><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">T: (425) 947-8050 F: (425) 947-8052</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">135 Lake Street S., Suite 257</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Kirkland, WA 98033</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><span style="color:#C00000">Confidential/Privileged Communication:</span></b><span style="color:gray"> This email and any attachments are confidential, privileged and intended
only for the intended recipient(s). Unauthorized disclosure, copying, distribution or use of this email is prohibited. If you received this email in error, please notify me immediately so we can arrange for the message and documents to be returned and deleted.
Thank you.</span><o:p></o:p></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><b><span style="color:#C00000">IRS Circular 230 Disclaimer:</span></b><span style="color:gray"> Any tax advice provided in this communication (including attachments) is not intended
or written to be used, and it cannot be used, by the recipient or any other taxpayer (i) for the purpose of avoiding penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership
or other entity, investment plan, arrangement or other transaction. You should seek advice based on your particular circumstances from an independent tax advisor.</span><o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
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