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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72" style='word-wrap:break-word'><div class=WordSection1><p class=MsoNormal>Umar:<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>I believe Kathleen is right that WAC 458-61A-214(3) should be available to exempt the second conveyance from the REET. <br><br>A in your hypothetical would not have to disclose his intent to reconvey B’s interest to C in the first deed. It will look like the straight sale it is. I’m not a dirt attorney but it might make sense to place some self-serving language in the first deed indicating the intent of both parties to sever and terminate the JTWROS. <br><br>The second deed – A’s conveyance of a percentage interest as TIC, would I think describe the agency relationship, therefore not containing any description of consideration and probably affirming that the conveyance is for no consideration at all. Kathleen is right that A and C would want the documentation described in (5) to be in place ahead of time. Hopefully this won’t be a problem because C has cash and does not require bank financing that is only available with a first position in the property. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>I think that should work to avoid a second REET.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>John J. Sullivan<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com> <b>On Behalf Of </b>Kathleen Hopkins<br><b>Sent:</b> Friday, January 14, 2022 4:31 PM<br><b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br><b>Subject:</b> Re: [WSBARP] Excise Tax Question<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>I am not a tax attorney so you want to do your own research to confirm, but consider if the nominee (aka strawman) exception WAC 458-61A-214 might work if A uses C’s money to buy out B’s interest. <o:p></o:p></p><p class=MsoNormal>NOTE: under subpart (5) of the WAC you will be required to obtain a notarized statement from C, dated BEFORE the date of the transfer from B to A, stating that A is using C’s money to acquire the TIC interest on C’s behalf. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b><i>Kathleen J. Hopkins <o:p></o:p></i></b></p><p class=MsoNormal>Real Property Law Group, PLLC <o:p></o:p></p><p class=MsoNormal>1326 Fifth Avenue, Suite 654 <o:p></o:p></p><p class=MsoNormal>Seattle, WA 98101 <o:p></o:p></p><p class=MsoNormal>Phone & Fax: (206) 625-0404 <o:p></o:p></p><p class=MsoNormal>Home <b>(please use during pandemic)</b>: 425-844-2749<o:p></o:p></p><p class=MsoNormal>email: <a href="mailto:khopkins@rp-lawgroup.com"><span style='color:blue'>khopkins@rp-lawgroup.com</span></a> <o:p></o:p></p><p class=MsoNormal><a href="http://www.rp-lawgroup.com/">www.rp-lawgroup.com</a> <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b>*Licensed in Washington State.<span style='color:red'><o:p></o:p></span></b></p><p class=MsoNormal><b><span style='color:red'><o:p> </o:p></span></b></p><p class=MsoNormal><b><o:p> </o:p></b></p><p class=MsoNormal><b><span style='color:red'><o:p> </o:p></span></b></p><p class=MsoNormal><b>This message is protected by the attorney-client privilege and the work-product doctrine; if you are not the intended recipient of this message please let the sender know you received it in error and please delete this message. Thank you.<o:p></o:p></b></p><p class=MsoNormal><b><o:p> </o:p></b></p><p class=MsoNormal><b><i>This email will not create a binding agreement and If there is a document attached to this message, the attached document cannot become effective until and unless the attached document is fully executed by the parties thereto and delivered pursuant to the methods required therein.<o:p></o:p></i></b></p><p class=MsoNormal><b><o:p> </o:p></b></p><p class=MsoNormal><b>Pursuant to U.S. Treasury Regulations concerning tax practice, you are advised that this message is not intended or written to be used, and it cannot be used, by anyone for the purpose of avoiding penalties that may be imposed under any tax laws; or promoting, marketing or recommending to another party any transaction or matter addressed herein.</b><o:p></o:p></p></div><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><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>Umar Gebril<br><b>Sent:</b> Friday, January 14, 2022 12:18 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 Question<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>No debt on the property. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div><div><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:black'>Umar Gebril</span><span style='font-family:"Century Schoolbook",serif;color:#385723'> | Attorney | Partner<o:p></o:p></span></p><p class=MsoNormal><b><span style='font-family:"Century Schoolbook",serif;color:#385723'>Cascade Law, PLLC</span></b><span style='font-size:12.0pt;font-family:"Century Schoolbook",serif;color:#385723'><o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#002451'><a href="http://www.cascade-law.com">www.cascade-law.com</a> <o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#385723'>1604 Hewitt Ave, Suite 515</span><span style='font-size:12.0pt;font-family:"Century Schoolbook",serif;color:#385723'><o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#385723'>Everett, WA 98201</span><span style='font-size:12.0pt;font-family:"Century Schoolbook",serif;color:#385723'><o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#385723'>425.300.5616<o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#002451'><o:p> </o:p></span></p></div></div></div><p class=MsoNormal><span style='font-size:7.0pt;font-family:"Century Schoolbook",serif;color:black;background:white'>Confidentiality Notice: This e-mail message, from Cascade Law, PLLC, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. The recipient is responsible to maintain the confidentiality of this information and to use the information only for authorized purposes. If you are not the intended recipient (or authorized to receive information for the intended recipient), you are hereby notified that any review, use, disclosure, distribution, copying, printing, or action taken in reliance on the contents of this e-mail is strictly prohibited. If you have received this communication in error, please notify us immediately by reply e-mail and destroy all copies of the original message.</span><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='font-size:12.0pt;color:black'>From: </span></b><span style='font-size:12.0pt;color:black'>"<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>> on behalf of John McCrady <<a href="mailto:j.mccrady@pstitle.com">j.mccrady@pstitle.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>Friday, January 14, 2022 at 12:14 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 Question<o:p></o:p></span></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><div><p class=MsoNormal>If there is debt on the property, and C is taking on part of the debt, then excise tax is owing on any consideration C is paying to B, and also on ½ the amount of debt owing.<o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><div><p class=MsoNormal>John McCrady<o:p></o:p></p><p class=MsoNormal>Counsel<o:p></o:p></p><p class=MsoNormal>Puget Sound Title Company<o:p></o:p></p><p class=MsoNormal>5350 Orchard Street West<o:p></o:p></p><p class=MsoNormal>University Place WA 98467<o:p></o:p></p><p class=MsoNormal>253-476-5721<o:p></o:p></p><p class=MsoNormal><a href="mailto:j.mccrady@pstitle.com">j.mccrady@pstitle.com</a><o:p></o:p></p><p class=MsoNormal><span style='color:#1F497D'><img border=0 width=290 height=199 style='width:3.0208in;height:2.0729in' id="Picture_x0020_3" src="cid:image001.png@01D80969.B72EBFE0"></span><o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal><b><span style='font-size:13.0pt;font-family:"Bodoni MT",serif'>Beginning July 26, 2021, recording fees for most documents recorded in Washington <a href="https://www.piercecountywa.gov/DocumentCenter/View/105275/Recording-Fee-Schedule-Effective-Jul-25-2021-">will increase by $100</a>. Please be sure to collect recording fees accordingly. Due to the above increase, our Reconveyance fees will also be increased by $100.00</span></b><o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal style='margin-top:6.0pt'><b><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>WARNING-FRAUDULENT FUNDING INSTRUCTIONS </span></b><o:p></o:p></p><p class=MsoNormal style='margin-top:6.0pt'><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>Email hacking and fraud are on the rise to fraudulently misdirect funds. Please call your escrow officer immediately using contact information found from an independent source, such as the sales contract or internet, to verify any funding instructions received. We are not responsible for any wire sent by you to an incorrect bank account.</span><o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p></div><p class=MsoNormal> <o:p></o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><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>Umar Gebril<br><b>Sent:</b> Friday, January 14, 2022 11:32 AM<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 Question<o:p></o:p></p></div></div><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>Listmates, <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>Here’s a scenario I’d be interested in getting your opinions on:<o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>A and B are both unmarried and currently own Property in joint tenancy WROS. <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>A wants to remove B from title, and then add C to title and own Property together as TIC. B is amenable to being bought out, and has agreed to sell her interest in the Property back to A for $350k. B does not know that C exists and B is not aware that A intends to add C to title after B is removed. <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>My initial thought is to first utilize a QCD to break the joint tenancy and remove B from title (thereby triggering excise tax liability on the part of B for the transfer in interest), and then subsequently completing a 2<sup>nd</sup> deed (QCD, WD…?) in order to add C to title. <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>However, by proceeding this way, I believe that in executing the 2<sup>nd</sup> deed (from A to C, as TIC), A will incur excise tax – which we want to avoid. <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>Aside from having B transfer her interest directly to C (and thereby finding out about C’s existence), can you think of another way or means that would allow us to complete this without having A incur excise tax?<o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>Thoughts and comments appreciated. <o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal>Umar<o:p></o:p></p><p class=MsoNormal> <o:p></o:p></p><div><div><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:black'>Umar Gebril</span><span style='font-family:"Century Schoolbook",serif;color:#385723'> | Attorney | Partner</span><o:p></o:p></p><p class=MsoNormal><b><span style='font-family:"Century Schoolbook",serif;color:#385723'>Cascade Law, PLLC</span></b><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#002451'><a href="https://f.xdref.com/?id=20EJddVK026247&from=wsbarp-bounces@lists.wsbarppt.com&to=j.mccrady@pstitle.com&url=http://www.cascade-law.com">www.cascade-law.com</a> </span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#385723'>1604 Hewitt Ave, Suite 515</span><span style='color:#385723'><o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#385723'>Everett, WA 98201</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Century Schoolbook",serif;color:#385723'>425.300.5616</span><o:p></o:p></p><p class=MsoNormal><span style='font-family:"Arial",sans-serif;color:#002451'> </span><o:p></o:p></p></div></div><p class=MsoNormal><span style='font-size:7.0pt;font-family:"Century Schoolbook",serif;color:black;background:white'>Confidentiality Notice: This e-mail message, from Cascade Law, PLLC, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. The recipient is responsible to maintain the confidentiality of this information and to use the information only for authorized purposes. If you are not the intended recipient (or authorized to receive information for the intended recipient), you are hereby notified that any review, use, disclosure, distribution, copying, printing, or action taken in reliance on the contents of this e-mail is strictly prohibited. If you have received this communication in error, please notify us immediately by reply e-mail and destroy all copies of the original message.</span><o:p></o:p></p></div></div></body></html>