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--></style></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span style='font-size:11.0pt'>Good morning all,<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>The members of an LLC that holds real estate in Washington want to transfer units among themselves, and my brain is getting a bit hung up on the controlling interest transfer rules. I’m hoping someone can help me sort out if and when excise tax is due on their proposed transfers. Here’s the scenario:<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>A, B, C and D each held a 25% interest in the LLC. In December, 2018, D passed away, leaving her interest in equal shares to 4 children. We’ll call the children D1, D2, D3 and D4. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>B wants to sell her 25% interest to C for $40,000. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>D2, D3 and D4 then want to gift their interests, totaling 18.75%, to D1. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>A then wants to sell his 25% interest to D1 for $40,000. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>The final result will be that C and D1 each have a 50% interest in the LLC. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>The way I read the WACs, there has not been a transfer of a controlling interest. But I would like to check my thinking on this.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>Any assistance would be much appreciated!<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>Thank you,<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>Jennifer<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><i>Jennifer M. Johnson</i><o:p></o:p></p><p class=MsoNormal><span style='font-size:11.0pt'>Attorney<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:11.0pt'>Hanigan Law Office, PS<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:11.0pt'>PO Box 39 - 68 Main Street<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:11.0pt'>Cathlamet, WA 98612<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:11.0pt'>(360) 795-3494<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:11.0pt'>(360) 795-3001 (f)<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#FB0007'>CONFIDENTIALITY NOTICE: </span><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>THIS EMAIL IS INTENDED TO BE A CONFIDENTIAL AND PRIVILEGED ATTORNEY-CLIENT COMMUNICATION. </span></b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>IF YOU ARE NOT THE INTENDED RECIPIENT OF THIS EMAIL, PLEASE DO NOT READ OR PRINT IT. </span><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#00006D'>This transmission is intended for the sole use of the individual and entity to whom it is addressed, and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. 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