[WSBARP] Excise tax of transfer to partner not on title.

[Eric Nelsen]

I think there ain't no exemption for that. If the second person "bought in" at a particular time, I think the question is: what was the structure of the deal?

If it was a straight purchase of a title interest, then that was a transaction that would be memorialized by deed and REET should be paid. But many different structures might have been used.

If A owned the property outright and B bought an interest, that's just a purchase by B, no exemption.

If A and B formed a partnership first and then A bought the property and then B contributed later in order to equalize the financial commitment, and the property is actually partnership property under RCW 25.05.060 and RCW 25.05.065<https://app.leg.wa.gov/RCW/default.aspx?cite=25.05&full=true#25.05.060>, then really title should be in name of the partnership and you could look at the controlling interest rules, WAC 458-61A-101<https://apps.leg.wa.gov/wac/default.aspx?cite=458-61A-101>, to determine if there is a possible exemption.

If it wasn't a partnership but A and B contributed to the purchase at the same time but for some reason only A ended up on title, then you can possibly justify adding B to title on grounds that A held title partly as "nominee" for B. WAC 458-61A-214<https://apps.leg.wa.gov/wac/default.aspx?cite=458-61A-214>. Note that they'll need careful documentation to show that in fact B contributed money at the time of purchase such that A was B's nominee at the time A entered title.

Other possibilities...I think it just depends heavily on exact timeline of purchase, monetary contributions, agreements between the parties. Some might be exempt from REET, but a lot won't be.

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: Thursday, November 07, 2019 9:30 AM
To: 'WSBA Real Property Listserv'
Subject: [WSBARP] Excise tax of transfer to partner not on title.

I have a situation where a partner bought into the property but was never on title. They want to add this partner and not pay excise tax (of course). Does anyone know the WAC code for this?


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

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