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<p class="MsoNormal"><span style="color:#1F497D">Look at section 11 of WAC458-61A-101 that states if it is exempt under any other provision of the WAC or statute it is exempt also even if a controlling interest is transferred see the examples<o:p></o:p></span></p>
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<p class="MsoNormal"><b><span style="font-family:"Segoe UI","sans-serif";color:#17365D">Bryce H. Dille</span></b><span style="font-size:10.0pt;font-family:"Segoe UI","sans-serif";color:#17365D"> </span><span style="font-size:7.5pt;font-family:"Segoe UI","sans-serif";color:#B9B9B9">|</span><span style="font-size:10.0pt;font-family:"Segoe UI","sans-serif";color:#424242"> Attorney
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Segoe UI","sans-serif";color:#424242">P: 253.848.3513</span><span style="font-size:7.5pt;font-family:"Segoe UI","sans-serif";color:#B9B9B9">|</span><span style="font-size:10.0pt;font-family:"Segoe UI","sans-serif";color:#424242"> F: 253.845.4941</span><span style="font-size:10.0pt;font-family:"Segoe UI","sans-serif";color:#424242"><o:p></o:p></span></p>
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<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""> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Richard Holland<br>
<b>Sent:</b> Thursday, October 12, 2017 10:46 AM<br>
<b>To:</b> WSBA Real Property Listserv<br>
<b>Subject:</b> [WSBARP] Real Estate Excise Tax on Partnerships<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<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>
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