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<p class="MsoNormal">I am having trouble reconciling two provisions in the Exemptions of 458-61A. Specifically, under 211(2)(b) and 212.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">211 (in relevant part)<o:p></o:p></p>
<p class="MsoNormal">(2) Qualified transactions. 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></p>
<p class="MsoNormal">(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></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">212 (in relevant part)<o:p></o:p></p>
<p class="MsoNormal">(1) Introduction. A transfer that, for federal income tax purposes, does not involve the recognition of gain or loss for entity formation, liquidation or dissolution, and reorganization, is not subject to the real estate excise tax.<o:p></o:p></p>
<p class="MsoNormal">(2) Internal Revenue Code sections. This exemption includes, but is not limited to, nonrecognition of loss or gain under the following sections of the Internal Revenue Code of 1986:<o:p></o:p></p>
<p class="MsoNormal">(f) Section 731 - Partners and partnerships - Extent of recognition of gain or loss on distribution.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">If I look up “26 U.S. Code § 731 - Extent of recognition of gain or loss on distribution”, it says “(b) Partnerships.<o:p></o:p></p>
<p class="MsoNormal">No gain or loss shall be recognized to a partnership on a distribution to a partner of property, including money.”<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Now first and foremost I am not a tax attorney nor IRS code expert, but when I read this it looks like a 50% owner in a real property partnership, (or LLC that is treated as a partnership), that distributes 100% of property to one owner
is liable for exise tax on 50% of the value under 211(2)(b) but no excise tax under 212(2)(f).<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">What?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Sincerely,<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Richard Holland<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Pacific Northwest Legal & Escrow, P.S.<o:p></o:p></p>
<p class="MsoNormal">603 4<sup>th</sup> Avenue, Suite 100<o:p></o:p></p>
<p class="MsoNormal">Kirkland, WA 98033<o:p></o:p></p>
<p class="MsoNormal">425-836-6240<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"><img width="175" height="78" style="width:1.8229in;height:.8125in" id="Picture_x0020_1" src="cid:image001.jpg@01D34347.53DD2FE0" alt="logo-for-print.jpg"><b><o:p></o:p></b></span></p>
<p class="MsoNormal"><b><u><span style="color:red"><o:p><span style="text-decoration:none"> </span></o:p></span></u></b></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt">BE AWARE! Online banking fraud is on the rise</span></b><span style="font-size:10.0pt">.
<span style="color:red">If you receive an email containing instructions on where or an amount to send to our office, CALL OUR OFFICE IMMEDIATELY
<b>** WE DO NOT SEND SEPARATE FUNDING INSTRUCTIONS BY EMAIL**</b></span><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;color:#1F497D">The information contained in this communication, and in any attached document(s), is privileged and/or confidential, intended solely for the individual/entity to whom/which it was sent. If you
are not the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this information is strictly prohibited. If you have received this email in error, please notify me immediately at the email address, mailing address,
or telephone or fax number above.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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