[WSBARP] Excise Tax on D/T

Mon Oct 24 14:59:48 PDT 2016

Any time! :)

On Mon, Oct 24, 2016 at 2:22 PM, Scott Hildebrand <
scott at starboard-strategies.com> wrote:

> You are a lifesaver. Thanks!
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.
> wsbarppt.com] *On Behalf Of *Michael Safren
> *Sent:* Monday, October 24, 2016 1:42 PM
>
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Excise Tax on D/T
>
>
>
> 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.
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> *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
>
>
>
>
>
>
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