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<p class="MsoNormal"><span style="color:#1F497D">You probably already found the answer on this but it is “NO”. There is a specific exemption in the WAC code for this.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:13.5pt;font-family:"Arial Black",sans-serif;color:black">WAC 458-61A-211<o:p></o:p></span></p>
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<p class="MsoNormal" align="right" style="text-align:right"><span style="font-size:12.0pt;font-family:"Arial",sans-serif;color:black"><a href="http://app.leg.wa.gov/WAC/registerfiling.aspx?cite=458-61A-211"><span style="color:#2B674D;background:#EFEBA5">Agency
filings affecting this section</span></a><o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:7.5pt"><span style="font-size:18.0pt;font-family:"Arial Black",sans-serif;color:black">Mere change in identity or form—Family corporations and partnerships.<o:p></o:p></span></p>
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<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(1) <b>Introduction.</b> A transfer of real property is exempt from the real estate excise tax if it consists of a mere change in identity or form of ownership
of an entity. This exemption is not limited to transfers involving corporations and partnerships, and includes transfers of trusts, estates, associations, limited liability companies and other entities. If the transfer of real property results in the grantor(s)
having a different proportional interest in the property after the transfer, real estate excise tax applies.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(2) <b>Qualified transactions.</b> A mere change in form or identity where no change in beneficial ownership has occurred includes, but is not limited to:<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(a) The transfer by an individual or tenants in common of an interest in real property to a corporation, partnership, or other entity if the entity receiving
the ownership interest receives it in the same pro rata shares as the individual or tenants in common held prior to the transfer. (See also WAC <a href="http://app.leg.wa.gov/WAC/default.aspx?cite=458-61A-212"><span style="color:#2B674D">458-61A-212</span></a>,
Transfers where gain is not recognized under the Internal Revenue Code.)<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(b) The transfer by a corporation, partnership, or other entity of its interest in real property to its shareholders or partners, who will hold the real
property either as individuals or as tenants in common in the same pro rata share as they owned the corporation, partnership, or other entity. To the extent that a distribution of real property is disproportionate to the interest the grantee partner has in
the partnership, it will be subject to real estate excise tax.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black;background:yellow;mso-highlight:yellow">(c) The transfer by an entity of its interest in real property to its wholly owned subsidiary, the transfer of real
property from a wholly owned subsidiary to its parent, or the transfer of real property from one wholly owned subsidiary to another.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black;background:yellow;mso-highlight:yellow">(d) The transfer by a corporation, partnership or other entity of its interest in real property to another corporation,
partnership, or other entity if the grantee owner(s) receives it in the same pro rata shares as the grantor owner(s) held prior to the transfer.</span><span style="font-family:"Arial",sans-serif;color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(e) Corporate mergers and consolidations that are accomplished by transfers of stock or membership, and mergers between corporations and limited partnerships
as provided in chapters <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=25.10"><span style="color:#2B674D">25.10</span></a> and <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=24.03"><span style="color:#2B674D">24.03</span></a> RCW.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(f) A transfer of real property to a newly formed, beneficiary corporation from an incorporator to the newly formed corporation, provided:<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(i) The proper real estate excise tax was paid on the original transfer to the incorporator; and<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(ii) It was documented on or before the original transfer that the incorporator received title to the property on behalf of that corporation during its formation
process.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">This tax exemption does not apply to a transaction in which a property owner acquires title in his or her own name and later transfers title to the corporation
upon its formation.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(g) A transfer into any revocable trust.<o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.25in"><span style="font-family:"Arial",sans-serif;color:black">(h) A conveyance from a trustee of a revocable trust to the original grantor or to a beneficiary if no valuable consideration passes, or if the transaction
is otherwise exempt under this chapter (for example, a gift or inheritance). A sale of real property by the trustee to a third party, or to a beneficiary for valuable consideration, is subject to the real estate excise tax<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="color:#1F497D">Thank you,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Rich Holland<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Jeanne Dawes<br>
<b>Sent:</b> Friday, January 23, 2015 9:25 AM<br>
<b>To:</b> WSBA Real Property Listserv<br>
<b>Subject:</b> Re: [WSBARP] Transfer of commercial property from corporation to LLC<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">Think about creating a LLC and then merging the corp with the LLC, or converting the corp to an LLC.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><i><span style="font-size:18.0pt;font-family:"TypoUpright BT";color:blue">Jeanne</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue">
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><i><span style="font-size:18.0pt;font-family:"TypoUpright BT";color:blue">Jeanne J.</span></i></b><b><i><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue">
</span></i></b><b><i><span style="font-size:18.0pt;font-family:"Bella Donna";color:blue">Dawes<o:p></o:p></span></i></b></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Attorney at Law</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Gore & Grewe, P.S.</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">103 E. Indiana Avenue, Suite A</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Spokane, WA 99207-2317</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Voice: 509-326-7500</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Fax: 509-326-7503</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"><a href="mailto:jjdawes@goregrewe.com">jjdawes@goregrewe.com</a></span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue"><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">INFORMATION CONTAINED IN THIS E-MAIL TRANSMISSION IS PRIVILEGED AND CONFIDENTIAL. </span><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:blue">
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<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
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<div style="border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">
<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">mailto:wsbarp-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>PrestonFoskey<br>
<b>Sent:</b> Friday, January 23, 2015 9:05 AM<br>
<b>To:</b> WSBA Real Property Listserv<br>
<b>Subject:</b> [WSBARP] Transfer of commercial property from corporation to LLC<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Listmates:<o:p></o:p></p>
<p class="MsoNormal"> Client has small family corporation that owns real property with small apartment complex. Client wants to form LLC and transfer real property from corporation to LLC.<o:p></o:p></p>
<p class="MsoNormal"> Will client be required to pay excise tax on transfer from corporation to LLC when owners of corporation are same individuals as members of LLC?<o:p></o:p></p>
<p class="MsoNormal"> Thanks in advance.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><i><span style="font-size:16.0pt;font-family:"Cambria",serif">Preston L. Foskey</span></i></b><b><i><span style="font-size:16.0pt;font-family:"Informal Roman"">,
</span></i></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Attorney at Law<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">WSBA # 12509<o:p></o:p></span></p>
<p class="MsoNormal"><b><i><span style="font-size:14.0pt;font-family:"Cambria",serif">Preston L. Foskey, P. S.<o:p></o:p></span></i></b></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">8248 East D Street<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Tacoma, Washington 98404-1042<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Phone: 253.535.5829 Fax: 253.535.9391<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">E-Mail:
<a href="mailto:preston@plfps.comcastbiz.net">preston@plfps.comcastbiz.net</a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Book Antiqua",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Book Antiqua",serif">WARNING: This email (including any attachments) is covered by the Electronic Communications Privacy Act (EPCA), 18 U.S.C., Sec. 2510 - 2522, is confidential and privileged.
This email is solely for the use of the addressee(s) named above. Receipt by anyone other than the individual recipient is NOT a waiver of attorney-client privilege. Any violation of the ECPA is subject to the penalties stated therein.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Book Antiqua",serif">SPECIAL NOTICE TO CLIENT(S): If you are my client this email is directed to you, DO NOT FORWARD to any other party, or you could be waiving the attorney-client privilege.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:8.0pt;font-family:"Arial",sans-serif">Notice: The information contained in this e-mail is confidential and may also be attorney-client privileged. This information is intented only for the use of the individual
or entity to whom it is addressed. If you are not the intended recipient, or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any use, dissemination, distribution,or copying of this communication is strictly
prohibited. If you have received this e-mail in error, pleasee immediately notify me by replying to this e-mail and deleted the original. Thank you.<o:p></o:p></span></p>
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