[WSBARP] Controlling Interest Transfer question

[Jennifer Johnson]

Good morning all,

 

The members of an LLC that holds real estate in Washington want to transfer units among themselves, and my brain is getting a bit hung up on the controlling interest transfer rules.  I’m hoping someone can help me sort out if and when excise tax is due on their proposed transfers.  Here’s the scenario:

 

A, B, C and D each held a 25% interest in the LLC.  In December, 2018, D passed away, leaving her interest in equal shares to 4 children.  We’ll call the children D1, D2, D3 and D4. 

 

B wants to sell her 25% interest to C for $40,000.  

 

D2, D3 and D4 then want to gift their interests, totaling 18.75%, to D1.  

 

A then wants to sell his 25% interest to D1 for $40,000.  

 

The final result will be that C and D1 each have a 50% interest in the LLC.  

 

The way I read the WACs, there has not been a transfer of a controlling interest.  But I would like to check my thinking on this.

 

Any assistance would be much appreciated!

 

Thank you,

 

Jennifer

 

Jennifer M. Johnson

Attorney

Hanigan Law Office, PS

PO Box 39 - 68 Main Street

Cathlamet, WA 98612

(360) 795-3494

(360) 795-3001 (f)

 

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