[WSBARP] Excise Tax on D/T

Mon Oct 24 13:41:35 PDT 2016

Hi Scott,

I would suggest doing the full reconveyance because it will be a simpler
series of transactions to complete (2 simple transactions vs. 1 a bit more
complicated) and  will make getting title insurance on both the parcels
much easier to obtain.  Down the line, one of the  parties are going to
want to sell Property #1 and it could be difficult to provide clear title
if there is no reconveaynce associated with Property #1 only a change in
the note.

If the parties go with the modification route, the parties will have to
modify the existing Deed of Trust as well as the note to secure the
obligation against property #2.  Again this can cause complications for
title insurance as well as drafting errors, because the terms of the Deed
of Trust for property #1 may differ from the intended terms for property #2.

My suggestion is to have two simple transactions - a reconveyance on
property #1 and create a note and Deed of Trust secured against Property #2
rolling in the existing indebtedness vs. drafting modifications to the note
and Deed of Trust, but I think both would accomplish the intend goals of
the parties.

I hope this helps.

Kind regards,

On Mon, Oct 24, 2016 at 12:40 PM, Jay Goldstein <Jay at jaglaw.net> wrote:

> If it’s just the note being transferred, you could do note modification,
> reciting the modification and everyone signs.
>
>
>
> Jay A. Goldstein
>
> [image: cid:AEF18ED8-6AEE-403C-99E7-30A379E62D84 at local]
>
> 1800 Cooper Point RD SW NO. 8  |  Olympia, WA 98502
>
> Telephone 360.352.1970  |  Fax 360.357.0844 |  www.jaglaw.net
>
> *jay at jaglaw.net <jay at jaglaw.net>*
>
>
>
> Nothing contained herein should be construed as legal advice.
>
> The purpose of this email is to transmit a message or document.
>
> Should you not be the intended recipient of this email message,
>
> please reply advising of the mistake and then delete this message
>
> from your computer. Should you have any questions,
>
> please call the Sender at 360-352-1970.
>
> No trees were killed in sending this message
>
> (however, a large number of electrons were terribly inconvenienced).
>
>
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.
> wsbarppt.com] *On Behalf Of *Scott Hildebrand
> *Sent:* Monday, October 24, 2016 12:34 PM
>
> *To:* 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Excise Tax on D/T
>
>
>
> Michael-
>
> Here’s another one for you on the same fact pattern.
>
>
>
> I am transferring an encumbrance from one property to another. Same
> parties, just need to transfer the note. Can I do that with just a transfer
> of note or something simple like that? Do I need to reconvey??
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.
> wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>] *On Behalf Of *Michael
> Safren
> *Sent:* Monday, October 24, 2016 10:43 AM
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Excise Tax on D/T
>
>
>
> Hi Scott:
>
>
>
> Craig beat me to the response, but Excise Tax does not apply to a
> reconveyance because it is not a "Taxable Sale" under the Administrative
> Code.
>
>
>
> See WAC 458-61A-102(17)(e) which lists examples of non-taxable transfers
>
> "
>
> (e) *Examples.* The following examples, while not exhaustive, illustrate
> some of the circumstances in which a transfer may or may not be taxable.
> These examples should be used only as a general guide. The status of each
> situation must be determined after a review of all of the facts and
> circumstances.
>
> (i) John paid off his home mortgage and wants to get a loan to make
> improvements and buy a new car. John obtains an equity loan, secured by his
> home as collateral. This transaction is not subject to the real estate
> excise tax.
>
> (ii) Bob purchased real property from Sam pursuant to a real estate
> contract. Real estate excise tax was paid on the purchase price at the time
> of the sale. Bob has now paid off the property, and Sam is issuing a
> fulfillment deed to Bob indicating that the real estate contract has been
> satisfied. The fulfillment deed from Sam to Bob is not subject to the real
> estate excise tax.
>
> (iii) Diane has made the final payment on her mortgage, and the bank
> issues a full reconveyance of her property, indicating that the mortgage is
> paid in full. The reconveyance is not subject to the real estate excise
> tax."
>
>
>
>
>
> Hope this helps.
>
>
>
> Kind regards,
>
> Michael Safren
>
>
>
> On Mon, Oct 24, 2016 at 8:35 AM, Scott Hildebrand <
> scott at starboard-strategies.com> wrote:
>
> Colleagues:
>
>
>
> PC is beneficiary of a D/T on property 1.
>
> Grantor on property 1 wants to buy another property and PC would transfer
> encumbrance to property 2.
>
> Property 1 would then be free and clear and could be sold. D/T would have
> to be reconveyed.
>
> Can I accomplish this without paying excise tax, or, because there is a
> reconveyance, excise tax would have to be paid on property 1?
>
>
>
> Thank you,
>
> Scott Hildebrand
>
>
>
>
>
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
>
>
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20161024/636ef013/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 28939 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20161024/636ef013/image001.png>