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<p class="MsoNormal"><span style="font-size:11.0pt">Hi Mark,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">No need to apologize, I appreciate your response very much. I thought that paying tax only on the $200,000 actually changing hands might be too aggressive. I saw this note on WAC 458-61A-202(4): “For the purpose
of this rule, consideration does not include the indebtedness balance of any real property that is encumbered by a security lien.” Probably that just applies to non-pro rata distributions, but it is a bit vague as to what rule it is talking about. So with
this being a pro rata distribution plus consideration for the other portion, I can see your point that we need to address the assumption of half the mortgage as consideration. So if I factor in half of the mortgage debt, then we would pay excise tax on $400,000,
or 50% of the FMV of the property, which actually makes a lot of sense.<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>
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<p class="MsoNormal"><b><span style="color:black">From: </span></b><span style="color:black"><wsbarp-bounces@lists.wsbarppt.com> on behalf of Mark Anderson <marka@mbaesq.com><br>
<b>Reply-To: </b>WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Date: </b>Tuesday, September 14, 2021 at 4:42 PM<br>
<b>To: </b>WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject: </b>Re: [WSBARP] Related party transaction - How much REET?<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#002060">Sorry I’m late to this game.<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>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#002060">How are you planning to deal with the consideration given for assumption of the debt on the property? The child being bought out would not only be receiving $200,000,
but would also be relieved of the debt on the property.<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>
</span></b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#222A35">ANDERSON LAW FIRM PLLC<br>
821 Dock St Ste 209 PMB 4-12<br>
Tacoma, Washington 98402<br>
+1 253-327-1750<br>
+1 253-327-1751 (fax)<br>
<a href="mailto:marka@mbaesq.com"><span style="color:blue">marka@mbaesq.com</span></a><br>
<a href="http://www.mbaesq.com/"><span style="color:blue">www.mbaesq.com</span></a><b><o:p></o:p></b></span></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 2:47 PM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [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">This all makes perfect sense. Thanks everyone for your thoughtful responses.<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>
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<p class="MsoNormal"><b><span style="color:black">From: </span></b><span style="color:black"><<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>> on behalf of Kailei Feeney <<a href="mailto:kailei@westseattlelaw.com">kailei@westseattlelaw.com</a>><br>
<b>Reply-To: </b>WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Date: </b>Tuesday, September 14, 2021 at 1:16 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] Related party transaction - How much REET?<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
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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>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<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"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">3909 California Avenue SW<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">(206)938-5500
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#1F497D"><a href="mailto:kailei@westseattlelaw.com"><span style="color:blue">kailei@westseattlelaw.com</span></a></span><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">
<o:p></o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:11.0pt">From:</span></b><span style="font-size:11.0pt">
<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>Nicholas Pleasants<br>
<b>Sent:</b> Tuesday, September 14, 2021 12:37 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] 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>
<p class="MsoNormal"><a href="http://www.pleasantslaw.com/"><span style="color:windowtext;text-decoration:none"><b><span style="font-size:11.0pt;color:#2B6AA4"><img border="0" width="144" height="44" style="width:1.5in;height:.4583in" id="Picture_x0020_1" src="cid:image003.png@01D7A98A.B34518F0" alt="(Logo) Pleasants Law Firm"></span></b></span></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><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>
<p class="MsoNormal"><a href="http://www.pleasantslaw.com"><span style="font-size:11.0pt;color:#2E75B6">www.pleasantslaw.com</span></a><span style="font-size:11.0pt;color:#2E75B6">
<o:p></o:p></span></p>
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