[WSBARP] QCD and REETA

[Eric Nelsen]

The REET is determined by the amount of consideration passing-the amount of money paid from S to H&W, and/or the amount of H&W's debt assumed by S--so it doesn't really matter what percentage interest is passing.

If S is not paying anything and is not assuming any further debt, then the transaction is a gift. So H&W are conveying to S&SW but H&W remain obligated on the debt?

If S&SW are going to assume and pay the entire debt, then REET would be calculated based on the unpaid balance of principal on the debt. See WAC 458-61A-102(2)(b) and WAC 458-61A-201(3). I suppose arguably it might be calculated on half the unpaid balance, given how you say the first transaction was done-but I think it depends on what the agreement is between H&W and S as to who will pay the debt after this second transaction.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Jenny Ling
Sent: Friday, December 27, 2019 8:47 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>; wsbapt at lists.wsbarppt.com
Subject: [WSBARP] QCD and REETA

Good Morning,

I'm drafting a quit claim for a client where there was a a prior partial transfer in 2011 by H and W, and now H and W want to transfer the remaining interest.

The 2011 QCD has Grantors H and W, conveying to Grantees H, W and S.

The 2011 REETA shows excise tax paid on ½ the underlying debt, and no consideration of the equity paid to the Grantor, and lists Gross Selling Price of $66,132.48.


Is my assumption correct that as a result of the 2011 transfer, H, W, and S, each have a 1/3 interest, and S assumed ½ the underlying debt, and that 1/2 the underlying debt is $66,132.48?

And now, H and W now want to quit claim to S and SW, and there were be no further assumption of debt by S and SW.  On the REETA, for the Gross Selling price do I list 2/3 of the equity and the exemption as 2/3 of the equity per WAC 458-61A-201?

Thanks,

Jenny Ling, Esq.
Attorney and Counselor at Law

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P: (206) 859-5098 ext. 131 | E: jenny at jennylinglaw.com
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