[WSBARP] Nominees; WAC 458-61A-214; Flyhomes

[Samuel M. Meyler]

Dwight, 

 

Great breakdown.  Thank you.  Your highlighted text raises another question
for me though.  Subsection (3)(b) is, "The funds used by the nominee to
acquire the property were provided by the third party."  In the FlyHomes
example, isn't FlyHomes acquiring the property with its own cash rather than
using the buyer-client's funds?  How are they getting around the (3)(b)
requirement of the third party using their own funds to purchase? 

 

Sam 

 

 

Samuel M. Meyler

Meyler Legal, PLLC 

1700 Westlake Ave. N., Ste. 200

Seattle, Washington 98109

Tel:  206.876.7770

Fax:  206.876.7771

Email:   <mailto:samuel at meylerlegal.com> samuel at meylerlegal.com

  

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
On Behalf Of Dwight Bickel
Sent: Wednesday, March 10, 2021 3:27 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Cc: Kary Krismer <Krismer at comcast.net>
Subject: Re: [WSBARP] Nominees; WAC 458-61A-214; Flyhomes

 

The transaction model explained in prior posts can be done without a second
excise tax due under the nominee excise exemption. Just ensure the
documentation requirements of (5) are done with documentation dated before
the initial purchase.

 

WAC 458-61A-214 (5) Acceptable documentation includes a notarized statement,
dated on or before the date of the initial purchase, that the nominee
acquired the property on behalf of the third party, or other documentation
clearly demonstrating the requirements of subsection (3) of this section
have been satisfied. Such documentation may include, but is not limited to,
financial documentation evidencing the nominee/third-party relationship
existed from the time of the original transfer, and confirming the source of
the funds used to purchase the property.

 

Reply to the comparison posted by Kary Krismer: 

A transaction where a relocation company acquires a deed from the owner with
compensation to that owner, then acts to resell the property, does not
comply with the nominee exception, for several reasons. 

 

(3) Subsequent transfer. The later transfer of the property by the nominee
to the third party purchaser is subject to real estate excise tax, unless
each of the following requirements is met:

(a) The proper tax was paid on the initial purchase of the property by the
nominee;

(b) The funds used by the nominee to acquire the property were provided by
the third party;

(c) The third party legally existed at the time of the initial transaction;
and

(d)(i) The subsequent transfer from the nominee to the third party is not
for a greater consideration than that of the initial acquisition

 

Also in answer to the question about the purchaser's insurance against
potential excise tax:

All title insurance policy forms issued to the purchaser will insure against
the risk that there is unpaid excise tax, because that is a lien upon the
real property, so unless it is shown as a special exception, or the insured
purchaser has actual knowledge that a lien exists, their policy will protect
against an assessment by DOR. Of course that would remain a debt due from
the "seller" which would be Flyhomes for the second transfer.

 

Dwight A. Bickel

Real Property Title Advisor

Washington Title Professional

 <mailto:Dwight at DwightBickel.com> Dwight at DwightBickel.com

https:/dwightbickel.com

 

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