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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#002060">I agree with respect to using a two-step process. I’ve done this successfully in the past where an LLC wanted to convey two lots with different values to the LLC’s
two members. We first transferred title from the LLC to the two members as tenants in common (applying WAC 458-61A-211(b)), and then transferred one lot to one member and the other lot to the other member pursuant to a partition agreement (applying WAC 458-61A-204(2)).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#002060"><o:p> </o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#222A35">Mark B. Anderson<br>
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<p class="MsoNormal"><b>From:</b> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>John J. Sullivan<br>
<b>Sent:</b> Thursday, August 19, 2021 5:08 PM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBARP] Excise tax exemption LLC to member of LLC Member<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Nestor:<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Whatever it takes in terms of structuring the form of the transaction, there is no way anything more than the $10 per affidavit processing fee should be paid, assuming pro rats distribution to the Members and no additional consideration. <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">From your description, the title holding LLC is a disregarded entity (assuming both are taxed as partnerships). Essentially this is a liquidating distribution to the individual members, right?<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">If so, wouldn’t it be exempt under IRC Section 731, and therefore under WAC 458-61A-212(2)(f)?<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">If you distribute the downstream Member unit to the individual Members you file an entity level return with the DOR and it’s exempt. Then you deed the property to the Members and it’s also exempt. <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Worst case you have two steps instead of one, but there should be no REET. <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt">John J. Sullivan <o:p></o:p></p>
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<p class="MsoNormal">Sent from my iPhone<o:p></o:p></p>
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<blockquote style="margin-top:5.0pt;margin-bottom:5.0pt">
<p class="MsoNormal" style="margin-bottom:12.0pt">On Aug 19, 2021, at 3:45 PM, Nestor Gorfinkel <<a href="mailto:esq@gorfinkel-law.com">esq@gorfinkel-law.com</a>> wrote:<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">As it stands now, it doesn’t appear on its face to be exempt from Excise tax.<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Nestor Gorfinkel, Attorney at Law</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Licensed in Florida & Washington State</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Florida Civil-Law (International) Notary</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black"> </span><o:p></o:p></p>
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<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">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Nestor Gorfinkel<br>
<b>Sent:</b> Thursday, August 19, 2021 6:38 PM<br>
<b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBARP] Excise tax exemption LLC to member of LLC Member<o:p></o:p></p>
</div>
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<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">I See your point or if we simply assign the membership interest in the Member LLC directly to the individual members.<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">I am not sure why there is a second layer for the LLC, and I requested that they ask their financial advisor or CPA, before I start mucking up the works.<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Nestor Gorfinkel, Attorney at Law</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Licensed in Florida & Washington State</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Florida Civil-Law (International) Notary</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black"> </span><o:p></o:p></p>
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<p class="MsoNormal"><image001.jpg><o:p></o:p></p>
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<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">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Athena Dickerson<br>
<b>Sent:</b> Thursday, August 19, 2021 6:19 PM<br>
<b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBARP] Excise tax exemption LLC to member of LLC Member<o:p></o:p></p>
</div>
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<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">Maybe a 2 step process, the first transfer to the member LLC using the exemption and the 2<sup>nd</sup> being a move to its members using the same exemption? I assume the “members” of both LLC’s are the same and in the same percentages.
<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Franklin Gothic Book",sans-serif;color:#C45911">Athena Makratzakis Dickerson</span><o:p></o:p></p>
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<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">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Nestor Gorfinkel<br>
<b>Sent:</b> Thursday, August 19, 2021 2:57 PM<br>
<b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> [WSBARP] Excise tax exemption LLC to member of LLC Member<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">An LLC owns a house where its only member is an LLC, and the transfer is going to individual members of the “LLC member”.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif">Is this exempt under
<span style="letter-spacing:-.1pt">WAC 458-61A-211(2)? I am looking to see where this scenario falls (b) or (d) fall short.</span></span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif;letter-spacing:-.1pt">None of the exemption appear to apply even though the end result is no change in beneficial interest.</span><o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Nestor Gorfinkel, Attorney at Law</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Licensed in Florida & Washington State</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black">Florida Civil-Law (International) Notary</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:black"> </span><o:p></o:p></p>
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<p class="MsoNormal"><image001.jpg><o:p></o:p></p>
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