<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40"><head><meta http-equiv=Content-Type content="text/html; charset=iso-8859-1"><meta name=Generator content="Microsoft Word 15 (filtered medium)"><style><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri",sans-serif;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:#0563C1;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:#954F72;
text-decoration:underline;}
p
{mso-style-priority:99;
mso-margin-top-alt:auto;
margin-right:0in;
mso-margin-bottom-alt:auto;
margin-left:0in;
font-size:12.0pt;
font-family:"Times New Roman",serif;}
p.MsoAcetate, li.MsoAcetate, div.MsoAcetate
{mso-style-priority:99;
mso-style-link:"Balloon Text Char";
margin:0in;
margin-bottom:.0001pt;
font-size:8.0pt;
font-family:"Tahoma",sans-serif;}
span.BalloonTextChar
{mso-style-name:"Balloon Text Char";
mso-style-priority:99;
mso-style-link:"Balloon Text";
font-family:"Tahoma",sans-serif;}
span.EmailStyle19
{mso-style-type:personal;
font-family:"Calibri",sans-serif;
color:windowtext;
font-weight:normal;
font-style:normal;}
span.EmailStyle20
{mso-style-type:personal;
font-family:"Arial",sans-serif;
color:#1F497D;}
span.EmailStyle21
{mso-style-type:personal;
font-family:"Calibri",sans-serif;
color:#1F497D;
font-weight:normal;
font-style:normal;}
span.EmailStyle22
{mso-style-type:personal-reply;
font-family:"Arial",sans-serif;
color:#1F497D;
font-weight:normal;
font-style:normal;
text-decoration:none none;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span style='font-size:12.0pt;font-family:"Arial",sans-serif;color:#1F497D'>A contract for the sale of standing timber is personal property.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;font-family:"Arial",sans-serif;color:#1F497D'><o:p> </o:p></span></p><table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width="100%" style='width:100.0%'><tr><td valign=top style='padding:0in 3.75pt 0in 0in'><p class=MsoNormal><span style='font-size:12.0pt;font-family:"Arial",sans-serif;color:black'>WAC 458-61A-113<o:p></o:p></span></p></td><td valign=top style='padding:0in 3.75pt 0in 0in'><p class=MsoNormal align=right style='text-align:right'><span style='font-size:12.0pt;font-family:"Arial",sans-serif'><a href="http://app.leg.wa.gov/WAC/registerfiling.aspx?cite=458-61A-113"><span style='color:#2B674D;background:#EFEBA5'>Agency filings affecting this section</span></a> <o:p></o:p></span></p></td></tr><tr><td colspan=2 valign=top style='padding:0in 3.75pt 0in 0in'><p class=MsoNormal style='margin-bottom:7.5pt'><span style='font-size:12.0pt;font-family:"Arial",sans-serif;color:black'>Timber, standing.<o:p></o:p></span></p></td></tr></table><p class=MsoNormal style='text-indent:.25in'><span style='font-size:12.0pt;font-family:"Arial",sans-serif'>(1) The real estate excise tax applies to the sale of timber if the ownership of the timber is transferred while the timber is standing. The tax applies to the sale of standing timber whether the sale is accomplished by deed or by contract. See also chapters <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=84.33"><span style='color:#2B674D'>84.33</span></a> RCW and <a href="http://app.leg.wa.gov/WAC/default.aspx?cite=458-40"><span style='color:#2B674D'>458-40</span></a> WAC for specific regulations and rules regarding the taxation of timber and forest land.<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.25in'><span style='font-size:12.0pt;font-family:"Arial",sans-serif'>(2) The grantor's irrevocable agreement to sell timber and pass ownership to it as it is cut is a taxable transaction if the total amount of the sale is specified in the original contract.<o:p></o:p></span></p><p class=MsoNormal style='text-indent:.25in'><b><span style='font-size:12.0pt;font-family:"Arial",sans-serif'>(3) A contract to transfer the ownership of timber after it has been cut and removed from land by the grantee is not a taxable transaction.<o:p></o:p></span></b></p><p class=MsoNormal style='text-indent:.25in'><span style='font-size:12.0pt;font-family:"Arial",sans-serif'>(4) A contract between a timber owner and a harvester when the harvester provides the service of cutting the timber and transporting it to the mill is not subject to the real estate excise tax if the timber owner retains ownership of the timber until it is delivered to and purchased by the mill.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;font-family:"Arial",sans-serif'>[Statutory Authority: RCW <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=82.32.300"><span style='color:#2B674D'>82.32.300</span></a>, 82.01.060(2), and 82.45.150. WSR 05-23-093, § 458-61A-113, filed 11/16/05, effective 12/17/05.]<o:p></o:p></span></p><p style='line-height:15.0pt'><span style='font-family:"Arial",sans-serif'> U.C.C. Article 9 applies to "any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures including goods ..." RCW 62A.9-102(1)(a).<o:p></o:p></span></p><p style='line-height:15.0pt'><span style='font-family:"Arial",sans-serif'>"Goods" includes all things which are movable at the time the security interest attaches or which are fixtures (RCW 62A.9-313) ... "Goods" also includes <a name=hit1 id=hit1><b><u>standing</u></b></a><b><u> <a name=hit2 id="hit_last">timber</a></u></b> which is to be cut and removed under a conveyance or contract for sale, ….<o:p></o:p></span></p><p style='line-height:15.0pt'><span style='font-family:"Arial",sans-serif'>It is quite clear that the proceeds from the sale of personal property is itself personal property and not “like kind” in a 1031 exchange for real property.<o:p></o:p></span></p><p style='line-height:15.0pt'><span style='font-family:"Arial",sans-serif'>Howard Herman<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;font-family:"Arial",sans-serif;color:#1F497D'><o:p> </o:p></span></p><div><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>Koons, Warren<br><b>Sent:</b> Monday, April 20, 2015 7:14 PM<br><b>To:</b> WSBA Real Property Listserv<br><b>Cc:</b> WSBA Real Property Listserv; Lloyd McGee<br><b>Subject:</b> Re: [WSBARP] 1031 Exchange and Like Kind Property<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><div><p class=MsoNormal>Yes - if you are buying the standing timber via a timber deed and harvest after the deed transfers title -- usually buyer has defined period of time to remove the timber. 1031 Services, Inc. in Bellevue is an excellent qualified intermediary. Warren Koons<br><br>Sent from my iPhone<span style='font-size:12.0pt'><o:p></o:p></span></p></div><div><p class=MsoNormal style='margin-bottom:12.0pt'><br>On Apr 20, 2015, at 6:47 PM, "Jim Doran" <<a href="mailto:jim@doranlegal.com">jim@doranlegal.com</a>> wrote:<o:p></o:p></p></div><blockquote style='margin-top:5.0pt;margin-bottom:5.0pt'><div><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>In your opinion if there is a purchase agreement “before” the trees are cut, then they are real property. Right?</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'> </span><o:p></o:p></p><div><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>James R. Doran</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Attorney at Law</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>100 E. Pine Street – Suite 205</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>Bellingham, WA 98225</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>(360)393-9506</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'><a href="mailto:jim@doranlegal.com">jim@doranlegal.com</a></span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'><a href="http://www.doranlegal.com">www.doranlegal.com</a></span><o:p></o:p></p></div><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'> </span><o:p></o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <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>Tom J. Westbrook<br><b>Sent:</b> Monday, April 20, 2015 5:54 PM<br><b>To:</b> WSBA Real Property Listserv<br><b>Subject:</b> Re: [WSBARP] 1031 Exchange and Like Kind Property<o:p></o:p></p></div></div><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Timber (trees) is part of the real estate. When severed, timber or trees become logs. Logs are personal property. The sale of logs cannot be part of a 1031 exchange – while the sale of trees on land can be part of a 1031. You just need to get the vernacular correct.</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><div><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Sincerely,</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Tom</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Thomas J. Westbrook</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Attorney at Law</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><p class=MsoNormal><span style='color:#1F497D'><image001.jpg></span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Rodgers, Kee & Card, P.S.</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>324 West Bay Drive NW, Suite 201</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Olympia, Washington 98502</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Phone: 360-352-8311</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Facsimile: 360-352-8501</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Email: <a href="mailto:tjw@buddbaylaw.com">tjw@buddbaylaw.com</a></span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>Skype: thomas.westbrook</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'><a href="http://www.buddbaylaw.com">www.buddbaylaw.com</a></span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'>The information contained in this email and attachment(s) are for the exclusive use of the addressee(s) and may contain private, privileged and/or confidential information. If you are not the addressee, you are strictly prohibited from reading, photocopying, distributing or otherwise using this email or its contents in any way. If you have received this communication in error, please notify us immediately by telephone at 360-352-8311 or by e-mail to <a href="mailto:reception@buddbaylaw.com">reception@buddbaylaw.com</a>, and destroy the original message from your electronic files.</span><o:p></o:p></p></div><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#1F497D'> </span><o:p></o:p></p><div><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>Jim Doran<br><b>Sent:</b> Monday, April 20, 2015 4:10 PM<br><b>To:</b> 'WSBA Real Property Listserv'<br><b>Subject:</b> [WSBARP] 1031 Exchange and Like Kind Property</span><o:p></o:p></p></div></div><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal><span style='font-size:12.0pt'>Here is the line from the IRS information website that I think clearly denies the use of a 1031 Exchange to a the situation where the owner of real property with timber on it sells the timber and then wants to use the proceeds from the timber sale to buy more real estate. The trees are personal property, are they not?</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:12.0pt'> </span><o:p></o:p></p><p class=MsoNormal>“Real property and personal property can both qualify as exchange properties under Section 1031; but real property can never be like-kind to personal property.” <span style='font-size:12.0pt'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-size:12.0pt'> </span><o:p></o:p></p><p class=MsoNormal><span style='font-size:12.0pt'>James R. Doran</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:12.0pt'>Attorney at Law</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt'>100 E. Pine Street – Suite 205</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt'>Bellingham, WA 98225</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt'>(360)393-9506</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt'><a href="mailto:jim@doranlegal.com">jim@doranlegal.com</a></span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt'><a href="http://www.doranlegal.com">www.doranlegal.com</a></span><o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p></div></blockquote><blockquote style='margin-top:5.0pt;margin-bottom:5.0pt'><div><p class=MsoNormal><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>_______________________________________________<br>WSBARP mailing list<br><a href="mailto:WSBARP@lists.wsbarppt.com">WSBARP@lists.wsbarppt.com</a><br><a href="http://mailman.fsr.com/mailman/listinfo/wsbarp">http://mailman.fsr.com/mailman/listinfo/wsbarp</a><o:p></o:p></span></p></div></blockquote></div></body></html>