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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#002060">Just some thoughts on this – please don’t judge me too harshly. (insert smiley face).<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">I suppose you could characterize at least part (if not all) of the payment from the Borrower to the Ex as a repayment of the amounts that Ex has transferred to
Borrower over the years. You say there is nothing in writing that ever created an indebtedness between Borrower and Ex. On its face, then, this just looks like "moving money around" between Borrower and Ex (especially if they ever had a joint bank account
and they are just splitting up joint assets). If this amount (the "Repayment”) is less than 50% of the equity, the amount of the Repayment could be characterized as a gift and the difference between the Repayment and 50% of the equity would be the amount
that is subject to excise tax.<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">In my opinion, because Ex did not become indebted on the note, there is no debt to be relieved of. Thus, there would be no excise tax due on any debt transferred.
Although none of the checkboxes on the Real Estate Excise Tax Supplemental Statement appear to be on point, the one that is the closest is A.2. It would read
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<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" style="margin-left:.5in"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#002060">"Grantee (buyer) will make payments on
<u>0%</u> of total debt of <u>$0.00</u> for which grantor (seller) is liable and pay grantor (seller) ($______ )."<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>
<p class="MsoNormal" style="margin-bottom:12.0pt"><b><span style="font-size:10.0pt;font-family:"Arial Narrow",sans-serif;color:#002060">CONFIDENTIALITY NOTICE<br>
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If you have received this transmission in error, please immediately notify the sender via e-mail or by telephone at (253) 327-1750 that you have received the message in error, and then delete it. Thank you.</span><span style="font-size:7.5pt;font-family:"Arial",sans-serif;color:#002060"><o:p></o:p></span></p>
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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>samuel@meylerlegal.com<br>
<b>Sent:</b> 12/27/2022 3:47 PM<br>
<b>To:</b> 'WSBA Real Property Listserv' <wsbarp@lists.wsbarppt.com>; wsbapt@lists.wsbarppt.com<br>
<b>Subject:</b> [WSBARP] REET Question/Exemption<o:p></o:p></p>
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<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">Co-habitants go on title of property together but only one of them (“Borrower”) is liable on the note due to the lender. Borrower makes payments on the loan directly while the other co-habitant (“Ex”) makes payments to the Borrower for
half of the loan payment. There is nothing in writing expressly stating that Ex is indebted to Borrower for 50% of the mortgage payment, but that is essentially what Ex pays to borrower for several years.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Borrower and Ex call it quits and wish to remove Ex from title. There is some equity in the property now. Borrower is willing to pay Ex 50% of the equity value and excise tax would be due on that amount. I am questioning whether excise
tax should also be due on 50% of the underlying debt given that the Ex was never personally liable on the note due to the bank. It could appear to someone as though Ex was liable to Borrower for half the mortgage and has now been relieved of that liability.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Have you dealt with this before? Would excise tax only be due on the value of the equity that Borrower pays Ex for? What exemptions apply? Thanks for the input.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Sam<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Samuel M. Meyler</span></b><o:p></o:p></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Meyler Legal, PLLC </span></b><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">1700 Westlake Ave. N., Ste. 200<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Seattle, Washington 98109</span><o:p></o:p></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Tel:</span></b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"> 206.876.7770<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Fax:</span></b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"> 206.876.7771<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">Email:</span></b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"> </span><a href="mailto:samuel@meylerlegal.com"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">samuel@meylerlegal.com</span></a><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue"> </span><o:p></o:p></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:blue">NOTICE:</span></b><o:p></o:p></p>
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