[WSBARP] Transfer of Property owned by 2 married couples as TIC to an LLC

[Inge Fordham]

Colleagues,

I was contacted by a real estate investor looking to transfer property owned by two sets of spouses (A and B, a married couple, and C and D, a married couple, as tenants in common) to an LLC where A and C are the sole members.  Although the LLC is considered a community asset, I don’t believe that’s enough to satisfy the DOR when it comes to claiming an excise tax exemption.  The options I see are: (1) add B and D to the LLC so A, B, D, and D all have a 25% interest (which may have unintended consequences); (2) B can transfer her interest in the property to A, and D to C, to create separate property (which may also have unintended consequences); or (3) pay excise tax on the 50% transfer.

I’m wondering if there are other options I have not considered.  How do you counsel clients in this circumstance?

Thank you,

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Inge A. Fordham | Attorney
Fordham Law, PLLC
3218 Sixth Avenue | Tacoma, WA 98406
Office: (253) 348-2657 | Mobile: (206) 778-3131
www.fordhamlegal.com<http://www.fordhamlegal.com>

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