[WSBARP] Gift or sale? REET

[Bickel, Dwight]

In my experience with the Dept. of Revenue, if the affidavit of the 50% t-i-c transfer says gift, does not disclose anything about the transfer of the minority interest in the corporation, there is no mortgage being assumed, and they are not recorded together, the DoR will not require payment of the sales tax.

However, if that affidavit does not disclose anything about the transfer of the minority interest in the corporation, is that affidavit truthful? If the title company is told about the transfer of minority interest in the corporation, the title company will show an exception for the lien for unpaid real estate sales tax on that property, because that looks like consideration and the DoR would assert that tax is due. [If the title company is not told about the consideration, the policy still does not provide coverage against the lien asserted against the grantee due to the application of the exclusions from coverage.]

As a lawyer for either party, I would recommend a full disclosure in advance to the DoR and accept the response. An opinion in advance is binding if the disclosure is complete.

Like Craig Blackmon said, Sometimes you gotta pay the Tax Man.
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