[WSBARP] Excise Tax on QCD

[Eric Nelsen]

But what is the money going to be used for? Any of it going to the client? I think that would be consideration: client "gives" brother an interest in the property, and brother takes out a loan on the property and gives money to client.

If you use -215, then brother would be effectively receiving only a nominal interest in the property for security purposes only.

I think I'm still not clear on the purpose of the transaction--why brother is getting a loan, what the arrangement between client and brother is. I think any scenario where brother gets a property interest and then client receives anything of value (proceeds from the loan or whatever), it could trigger REET.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of nestor at pplsweb.com
Sent: Wednesday, May 09, 2018 12:03 PM
To: 'WSBA Real Property Listserv'
Subject: Re: [WSBARP] Excise Tax on QCD

Thank you for the response. I reviewed the statute, which of course prompted me to dig in further. In my case, the property is unencumbered and they are not refinancing existing debt. Brother is being added because he has good credit and will be the principal borrower.

I found WAC 458-61A-215. Looks like it is exempt as long as client makes all the payments. However, if client is not a "borrower" I am not sure how that will be affected.

Nestor

Nestor Gorfinkel, Attorney at Law
Licensed in Washington & Florida
Florida Civil-Law (International) Notary
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of John McCrady
Sent: Wednesday, May 9, 2018 11:27 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Excise Tax on QCD

See WAC 458-61A 201(4) (a)
There is a rebuttable presumption that the transfer is a sale and not a gift if the grantee is involved in a refinance of debt on the property within six months of the time of the transfer.

I don't know whether there has been an decision construing "refinance".

John McCrady
Counsel
Puget Sound Title Company
5350 Orchard Street West
University Place WA 98467
253-476-5721
j.mccrady at pstitle.com<mailto:j.mccrady at pstitle.com>

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of nestor at pplsweb.com<mailto:nestor at pplsweb.com>
Sent: Wednesday, May 09, 2018 10:33 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: [WSBARP] Excise Tax on QCD

Client has unencumbered property and wants to add brother as a gift and then and then refinance with brother as the main borrower.  The way I see it Excise Tax not due on the transfer. Let me know if I am wrong.

I would of course have the transfer done in advance of the refinance.


Nestor Gorfinkel, Attorney at Law
Licensed in Washington & Florida
Florida Civil-Law (International) Notary

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