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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link=blue vlink=purple><div class=WordSection1><div><p class=MsoNormal><span style='color:#1F497D'>In 2006, the parents and the child were all on the DOT and SWD. In 2011 the parents refinance the mortgage so that only the parents are on the DOT. Because there was no transfer by deed, no excise tax was paid. <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'>I called the DOR today and spoke with a lady who seems to be very knowledgeable. I didn’t tell her about the 2011 refinancing to narrow the issues. Now with your comment, I will call back DOR again tomorrow. The DOR representative told me that in fact the consideration is 50% of the current mortgage balance because the current deed states: “grantees, Child A, an unmarried person, Father and Mother, Husband and Wife” without stating the TIC interest. Therefore, Child A owns 50% interest.<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'>Had there not been a refinancing in 2011; or had there been a refinancing and a new deed removing the child’s name; or had the parents been the only ones on the mortgage from 2006; then for sure there’s no consideration. The REET Supplemental Statement has a check box: “Gift without consideration: Grantor has made and will continue to make 100% of payment on the total debt and has not received any consideration towards equity. No tax due.” <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'>Common sense says Child received consideration because she was on the mortage in 2006, and she was relieved of her debt in 2011. Now in 2016, she wants her name off the title as well. If no excise tax was paid in 2011 because no transfer by deed, does that mean now excise tax is due because Child now wants to quit claim the real estate to parents? Thank you for your input. <o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal style='margin-bottom:2.0pt'><span style='color:#1F497D'>Regards,</span><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:black'> <br><br></span><b><span style='font-size:12.0pt;color:#0070C0'>Doris Eslinger</span></b><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:black'><br></span><b><span style='font-size:9.0pt;color:#0070C0'>Attorney at Law</span></b><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:black'><br></span><b><span style='font-family:"Felix Titling";font-variant:small-caps;color:#1F497D;letter-spacing:.6pt'>Eslinger Law Office, </span></b><b><span style='font-family:"Felix Titling";color:#1F497D;letter-spacing:.6pt'>PLLC</span></b><b><span style='font-size:12.0pt;font-family:"Garamond","serif";color:#1F497D;letter-spacing:2.0pt'> </span></b><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:black'><br>2200 112th Ave NE | Suite 200 | Bellevue, WA 98005 | Phone: (425) 451-3237 | <br>Fax: (425) 633-2468 | <a href="mailto:doris@eslingerlawoffice.com"><span style='color:#0065A2'>doris@eslingerlawoffice.com</span></a> | </span><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:#0070C0'><a href="http://www.eslingerlawoffice.com/"><span style='color:#0070C0'>eslingerlawoffice.com</span></a></span><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:black'> </span><span style='color:#1F497D'> </span><span style='font-size:8.0pt;font-family:"Arial","sans-serif";color:black'><br></span><b><span style='font-size:8.0pt;color:#1F497D;letter-spacing:.6pt'><br></span></b><span style='font-size:8.0pt;font-family:"Times New Roman","serif";color:#1F497D'>----------------------------------------------------------------------------------------------------<o:p></o:p></span></p><p class=MsoNormal style='line-height:8.0pt;mso-line-height-rule:exactly'><span style='font-size:8.0pt;font-family:"Times New Roman","serif";color:black'><br></span><span style='font-size:8.0pt;font-family:"Times New Roman","serif";color:#1F497D'>This message is intended only for the addressee. The information contained in this message is privileged, confidential, and protected by the attorney-client or attorney work product privileges. Unauthorized forwarding, printing, copying, distribution, disclosure or use of such information is strictly prohibited. If you are not the addressee, please promptly delete this message and notify the sender of the delivery error by return e-mail or you may call our office at (425) 451-3237. Nothing in this message should be interpreted as a digital or electronic signature that can be used to authenticate a contract or other legal document.<o:p></o:p></span></p></div><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></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"'> Bickel, Dwight [mailto:Dwight.Bickel@fntg.com] <br><b>Sent:</b> Monday, October 31, 2016 3:27 PM<br><b>To:</b> WSBA Real Property Listserv<br><b>Cc:</b> doris@eslingerlawoffice.com<br><b>Subject:</b> RE: [WSBARP] Excise Tax Question<o:p></o:p></span></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-family:"Verdana","sans-serif";color:navy'>The transaction described by Doris might not be taxable as an assumption of the Child’s liability on the underlying debt. The posted question does not state, but I presume the Child was a person who signed as grantor on the 2011 Deed of Trust. That does not determine taxability.<o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Verdana","sans-serif";color:navy'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-family:"Verdana","sans-serif";color:navy'>Was Child a <i>borrower</i> who signed the promissory note (and other loan documents)? The posted question suggests the Parents did that without the Child. It is common for the loan documents not to include one of the property owners, who sign only to agree to the mortgage. If so, there is no excise tax due. </span><span style='color:#1F497D'><a href="http://apps.leg.wa.gov/wac/default.aspx?cite=458-61A-103">See 458-61A-103</a>:<o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal style='margin-left:.5in'><span style='font-family:"Helvetica","sans-serif";color:black;background:white'>(2)<span class=apple-converted-space> </span><b>Transfers where grantor has no personal liability for the underlying debt.</b><span class=apple-converted-space> </span>Real estate excise tax does not apply to transfers of real property subject to an underlying debt when the grantor has no personal liability for the debt and receives no other consideration for the transfer.</span><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='font-family:"Verdana","sans-serif";color:#002060'>On the other hand, if Child signed all 2011 loan documents as a borrower, then the excise tax will be due based upon the amount of the remaining debt at the present time of the deed from Child to Parents. I do not know if the DOR will accept that Child was only liable for 1/3 of the debt, since technically the liability of each is the total. It is worth trying. RCW 82.45.030:<o:p></o:p></span></p><p class=MsoNormal style='margin-left:.5in'><span style='font-family:"Helvetica","sans-serif";color:black;background:white'>(3) As used in this section, "total consideration paid or contracted to be paid" includes money or anything of value, paid or delivered or contracted to be paid or delivered in return for the sale, and shall include the amount of any lien, mortgage, contract indebtedness, or other incumbrance, either given to secure the purchase price, or any part thereof, or remaining unpaid on such property at the time of sale.</span><span style='font-family:"Verdana","sans-serif";color:#002060'><o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p><div class=MsoNormal align=center style='text-align:center'><span style='font-size:12.0pt;font-family:"Times New Roman","serif"'><hr size=1 width="100%" noshade style='color:black' align=center></span></div><p class=MsoNormal><span style='font-size:12.0pt;font-family:"Times New Roman","serif"'>NOTICE: The information contained in this message is proprietary and/or confidential and may be privileged. If you are not the intended recipient of this communication, you are hereby notified to: (i) delete the message and all copies; (ii) do not disclose, distribute or use the message in any manner; and (iii) notify the sender immediately. <o:p></o:p></span></p></div></body></html>