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

[Kary Krismer]

Dwight,

Thank you for the answer regarding relocation, but I'm not sure I 
understand.  To be clear though, I've always thought relocation paid 
excise twice, but one relocation scenario is a bit more clear to me.

Here are the two relocation scenarios I was contemplating:

1.  Relocation company doesn't take title to the property until 
immediately prior to the actual buyer taking title.  So the deed from 
the relocation seller to the relocation company would be recorded and 
then immediately following the relocation company would record a deed to 
the buyer.  I'm not sure how escrow handles funds in that scenario.

2.  Relocation company takes title to the property and pays relocation 
seller as soon as property passes inspection.  If deal with buyer later 
falls through then relocation company will re-market the property, and 
may obtain more or less than the original contract price.

It was second that I was considering as clearly requiring two excise tax 
payments.  That seemingly fails a number of the tests you posted (the 
money doesn't come from the buyer and may be different amount).  But I'm 
not sure why the first scenario would fail the tests you posted, other 
than I wouldn't ordinarily consider them a nominee of the buyer since 
their relationship is with the seller.

Kary L. Krismer

206 723-2148

On 3/10/2021 3:27 PM, Dwight Bickel wrote:
>
> 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
>
> Dwight at DwightBickel.com <mailto:Dwight at DwightBickel.com>
>
> https:/dwightbickel.com
>
>
> ***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20210310/7abb0181/attachment.html>