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<p class="MsoNormal"><span style="font-size:11.0pt">I think perhaps you could still cut the cost and have one deed from the estate to the heir taking the property, and it would be part inheritance and part purchase and then I think you can utilize the 200 K
as the consideration amount.<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">Kailei<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Vladimir Script";color:#1F497D">Kailei B. Feeney</span><b><span style="font-size:16.0pt;color:#1F497D"><br>
</span></b><i><span style="font-size:11.0pt;font-family:"Garamond",serif;color:#1F497D">Attorney-at-Law<o:p></o:p></span></i></p>
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<p class="MsoNormal"><b><span style="font-size:11.0pt">From:</span></b><span style="font-size:11.0pt"> wsbarp-bounces@lists.wsbarppt.com <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>
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<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>
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<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><a href="mailto:nick@pleasantslaw.com"><span style="font-size:11.0pt;color:#2E75B6">nick@pleasantslaw.com</span></a><span style="font-size:11.0pt;color:#2E75B6"><o:p></o:p></span></p>
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