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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'>I had this issue last week and my filing went off without a hitch.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'>You are correct. The excise tax is only paid on the ½ of the equity in the property that is being conveyed. Although I had to declare the assessed value, only tax on the equity conveyed had to be paid. In your example, that is the $200,000.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'><o:p> </o:p></span></p><div><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Lucida Calligraphy";color:maroon'>Pamela H. Rohr, Esq.</span><span style='font-size:11.0pt;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><b><span style='font-size:14.0pt;color:#1F497D'>T</span></b><span style='font-size:14.0pt;font-variant:small-caps;color:maroon'>runkenbolz | </span><b><span style='font-size:14.0pt;color:#1F497D'>R</span></b><span style='font-size:14.0pt;font-variant:small-caps;color:maroon'>ohr</span><span style='font-size:11.0pt;font-variant:small-caps;color:maroon'> pllc</span><span style='font-size:11.0pt;font-family:"Times New Roman",serif;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-variant:small-caps;color:#1F497D'>P.O. </span><span style='font-size:11.0pt;color:#1F497D'>Box 14033 <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'>Spokane, WA 99214<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'>(509) 928-4100<o:p></o:p></span></p><p class=MsoNormal><u><span style='font-size:11.0pt;color:blue'><a href="mailto:phr@trlaw-spokane.com" title="mailto:phr@trlaw-spokane.com"><span style='color:blue'>phr@trlaw-spokane.com</span></a></span></u><span style='font-size:11.0pt;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><u><span style='font-size:11.0pt;color:blue'><a href="http://www.SpokaneLegalEagle.com" target="_blank"><span style='color:blue'>www.SpokaneLegalEagle.com</span></a></span></u><span style='font-size:11.0pt;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Lucida Calligraphy";color:maroon'><o:p> </o:p></span></p><p class=MsoNormal><b><span style='font-size:8.0pt;color:#8496B0'>CONFIDENTIALITY NOTE:</span></b><span style='font-size:8.0pt;color:#8496B0'> This electronic mail transmission may contain legally privileged and/or confidential information. This communication originates from the law firm of Trunkenbolz | Rohr PLLC, and is protected under the Electronic Communication Privacy Act, 18 U.S.C. § 2510-2521. Do not read this if you are not the person(s) named. Any use, distribution, copying, or disclosure by any other person is strictly prohibited. If you received this transmission in error, please notify the sender by telephone (509) 928-4100 or send an electronic mail message to the sender or </span><u><span style='font-size:8.0pt;color:blue'><a href="mailto:PHR@TRlaw-spokane.com"><span style='color:blue'>PHR@TRlaw-spokane.com</span></a></span></u><span style='font-size:8.0pt;color:#8496B0'> and destroy the original transmission and its attachments without reading or saving in any manner. Do not deliver, distribute or copy this message and/or any attachment and, if you are not the intended recipient, do not disclose the contents or take any action in reliance upon the information contained in this communication or any attachments.</span><span style='font-size:8.0pt;font-family:"Times New Roman",serif;color:#8496B0'><o:p></o:p></span></p></div><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='font-size:11.0pt'>From:</span></b><span style='font-size:11.0pt'> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com] <b>On Behalf Of </b>Nicholas Pleasants<br><b>Sent:</b> Tuesday, September 14, 2021 12:37 PM<br><b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br><b>Subject:</b> [WSBARP] Related party transaction - How much REET?<o:p></o:p></span></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-size:11.0pt'>Hi Listmates,<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>Let’s say I have a probate where the parents are deceased, two children are inheriting 50/50, and only probate asset is a home worth $800,000 with a $400,000 mortgage. One child wants to buy out the other, assume the mortgage (if possible under Garn St Germain) or just refinance into their own name.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>My typical practice is to deed the property to the two kids by PR deed, then have a second transaction where one kid buys out the other. When I’ve done this in the past, I have not had to deal with the mortgage issue. In this example, the amount of consideration would be $200,000 (half the equity), so can we just pay tax on the $200,000 changing hands? Or does DOR tax the FMV 50% interest that is being transferred, worth $400,000? Or does DOR tax on $600,000 ($400,000 mortgage assumed + $200,000 consideration to sibling)? <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>I don’t think I can do a non-pro rata distribution because there are no other probate assets. Thanks in advance for any thoughts.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>Best, <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'>Nick<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt'><o:p> </o:p></span></p><p class=MsoNormal><b><span style='font-size:11.0pt;color:#2B6AA4'>Nicholas Pleasants<o:p></o:p></span></b></p><p class=MsoNormal><span style='font-size:11.0pt;color:#2B6AA4'>Owner<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#2B6AA4'><o:p> </o:p></span></p><p class=MsoNormal><a href="http://www.pleasantslaw.com/"><b><span style='font-size:11.0pt;color:#2B6AA4;text-decoration:none'><img border=0 width=144 height=44 id="Picture_x0020_1" src="cid:image002.png@01D7A967.489CCC00" alt="(Logo) Pleasants Law Firm"></span></b></a><b><span style='font-size:11.0pt;color:#2B6AA4'><o:p></o:p></span></b></p><p class=MsoNormal><span style='font-size:11.0pt;color:black'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:black'>Pleasants Law Firm, P.S.<br>2300 130th Ave NE, Suite A-101<br>Bellevue, WA 98005-1755<br>(425) 615-7070 tel/fax<br></span><span style='font-size:11.0pt;color:#2E75B6'><a href="mailto:nick@pleasantslaw.com"><span style='color:#2E75B6'>nick@pleasantslaw.com</span></a><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#2E75B6'><a href="http://www.pleasantslaw.com"><span style='color:#2E75B6'>www.pleasantslaw.com</span></a> <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:8.0pt;color:black'>The information contained in this e-mail message may be privileged and is confidential information intended only for the use of the recipient, or any employee or agent responsible to deliver it to the intended recipient. Any unauthorized use, distribution or copying of this information is strictly prohibited and may be unlawful.</span><span style='font-size:11.0pt;color:black'><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:8.0pt;color:black'>If you have received this communication in error, please notify the sender immediately and destroy the original message and all attachments from your electronic files.</span><o:p></o:p></p></div></body></html>