[WSBARP] FIRPTA Tax

Fri Nov 12 13:21:18 PST 2021

When I transfer separate property from a spouse to a third party, I will include a spousal consent on the deed as follows:

ACKNOWLEDGMENT AND CONSENT OF SPOUSE

            THE UNDERSIGNED, ^Y, ^Ywife of ^Y, acknowledges that the property described herein is the separate property of ^Y and not property of their marital community, that ^Yshe has no right, title or interest therein of any kind and further consents to the execution of this ^Y Deed.

__________________________________
Jane Doe

This also has the benefit of avoiding another $214.50 in fees to the auditor and treas.

Jeanne

Jeanne J. Dawes
Attorney at Law
Gore & Grewe, P.S.
103 E. Indiana Avenue, Suite A
Spokane, WA 99207-2317
Voice:  509-326-7500
Fax:      509-326-7503
jjdawes at goregrewe.com<mailto:jjdawes at goregrewe.com>

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From: wsbarp-bounces at lists.wsbarppt.com On Behalf Of Samuel M. Meyler
Sent: Friday, November 12, 2021 11:56 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Cc: wsbapt at lists.wsbarppt.com
Subject: Re: [WSBARP] FIRPTA Tax

Thanks, John.  You and I are in agreement.  The wife is a U.S. citizen, files annual returns on her worldwide income and will report the gain.  Wife will also execute a FIRPTA certification confirming that she is a U.S. citizen.  She shouldn’t have to apply for an exemption.

Escrow wants to withhold pursuant to FIRPTA and title is requiring husband to execute the deed conveying title to the buyers.  I think that they are wrong about this but I am looking for other opinions and thoughts on how to address it.

Samuel M. Meyler
Meyler Legal, PLLC
1700 Westlake Ave. N., Ste. 200
Seattle, Washington 98109
Tel:  206.876.7770
Fax:  206.876.7771
Email:  samuel at meylerlegal.com<mailto:samuel at meylerlegal.com>

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of John J. Sullivan
Sent: Friday, November 12, 2021 11:27 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Cc: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBARP] FIRPTA Tax

Sam:

Are they filing a joint U.S. return? Been a long time since I worked on FIRPTA issues (my career started reading the daily advance sheets on the Tax Reform Act of 1986 around the time FIRPTA was enacted).

IMH first impression escrow should accept a certification from wife. Under WA law conveyance is by execution and delivery of the deed. Recording is not required as between them.

Can she apply for a withholding exemption on the basis that she files a return on her worldwide income, which will report any gain?

https://www.irs.gov/individuals/international-taxpayers/exceptions-from-firpta-withholding

https://www.irs.gov/individuals/international-taxpayers/format-for-applications

John J. Sullivan
Sent from my iPad

On Nov 12, 2021, at 10:43 AM, Samuel M. Meyler <samuel at meylerlegal.com<mailto:samuel at meylerlegal.com>> wrote:

Listmates,

Happy Friday!  I’m looking for some input on the following situation…

A Swiss citizen with a green card living in Washington in 2010 and his American wife buy a primary residence together.  They decide to move to Switzerland in 2014.  They execute a quit claim deed in 2014 from husband and wife, to wife, to create separate property, but they fail to record it (should have hired an attorney!).  They did get the assessor to put the property tax bill into wife’s name in 2014.  The QCD is properly acknowledged and there is no question that the QCD was signed and notarized in 2014.  Swiss husband allows his green card to lapse in 2015.  Wife is still a U.S. citizen and paid taxes on the rental income since that time.

In 2021 they decide to list the property and learn that they never properly recorded the QCD.  Listing goes pending.  They get the recorder’s office to record the QCD.  Notwithstanding the fact that the QCD was executed and acknowledged in 2014 and is now recorded, escrow is requiring a FIRPTA holdback.

Shouldn’t escrow acknowledge that husband actually conveyed the property to wife in 2014 despite the fact that the deed was not recorded?  Any thoughts on how to address this?  Are there any exemptions that apply?  All input is appreciated.

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

NOTICE:

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