[WSBARP] Real Estate Excise tax - step transactions

[Bryce Dille]

I have done several of these except the entity redeems the interest of a LLC member and distributes an undivided interest in the property to the retiring member proportionate to the ownership interest in the LLC and then the LLC purchased that property  interest from the member and paid excise tax on purchase price of property and when the llc filed its annual statement with the Sec of State it answered the interest transfer question by stating the truth that no ownership interest in the entity was transferred.

Bryce H. Dille
Dille Law, PLLC
2010 Caton Way SW Ste. 101
Olympia, WA 98502
Office: 360-350-0270
Cell: 253-579-5561

[R_Alan_Swanson-WH-200]
** Please note that I use the dictation feature of my iPhone and that sometimes everything I say does not get properly translated**

This transmission contains confidential attorney-client communications and may not be disclosed to any person but the intended recipient(s).  If this matter is transmitted to you in error, please notify the sender immediately.

Business Entity Creation and Management, Business, Government and Tax Law, Real Estate and Land Use, Residential, Commercial and Condominium Development Real Estate and Commercial Transactions & Closings, Including Performing Services as IRS Section 1031 Exchange Facilitator Estate Planning, including Wills and Trusts, and Probate Administration Representation Homeowners/Condominium Association Real Estate Developments Real Property Foreclosures and Forfeitures.

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Craig Gourley
Sent: Tuesday, February 28, 2023 2:23 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Real Estate Excise tax - step transactions

Listmates, As we all know transfer of a controlling interest in an entity generates excise tax on the value of the entire property, not just the part being transferred.  One obvious solution when one " partner" wants to buy the other out is to dissolve the entity, distribute the asset to the owners as tenants in common ( mere change in form of ownership) and then have the owner sell their interest to the other TIC.   Has anyone seen DOR audit this and try to collapse the transaction to get tax on the full value of the property rather than just the part being transferred?  Thanks, Craig

GOURLEY LAW GROUP
THE EXCHANGE CONNECTION
SNOHOMISH ESCROW
P.O. Box 1091
Snohomish, WA 98291
PH:  (360) 568-5065 (800) 291-8401
Fax: (360) 568-8092

CONFIDENTIALITY NOTICE: This electronic mail transmission may contain legally privileged, confidential information belonging to the sender. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or taking any action based on the contents of this electronic mail is strictly prohibited. If you have received this electronic mail in error, please contact sender and delete all copies.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20230228/06396d10/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 8651 bytes
Desc: image001.png
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20230228/06396d10/image001.png>