<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=us-ascii">
<meta name="Generator" content="Microsoft Word 15 (filtered medium)">
<style><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Aptos;}
@font-face
{font-family:"Arial Narrow";
panose-1:2 11 6 6 2 2 2 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin-top:0in;
margin-right:0in;
margin-bottom:10.0pt;
margin-left:0in;
font-size:10.0pt;
font-family:"Arial",sans-serif;
color:#071320;}
span.EmailStyle17
{mso-style-type:personal-compose;
font-family:"Arial",sans-serif;
font-variant:normal !important;
color:#002060;
text-transform:none;
position:relative;
top:0pt;
mso-text-raise:0pt;
letter-spacing:0pt;
font-weight:normal;
font-style:normal;
text-decoration:none none;
vertical-align:baseline;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:11.0pt;}
.MsoPapDefault
{mso-style-type:export-only;
margin-bottom:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang="EN-US" link="#467886" vlink="#96607D" style="word-wrap:break-word">
<div class="WordSection1">
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060">Dear All:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060">Father, Child 1, and Child 2 are members in 2 LLCs: Alpha LLC and Bravo LLC. Alpha LLC and Bravo LLC each own one piece of real property and the properties are each worth $100,000.
The ownership percentages of each LLC are as follows:<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:0in;margin-right:0in;margin-bottom:0in;margin-left:.25in">
<span style="color:#002060">20% – Father<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:0in;margin-right:0in;margin-bottom:0in;margin-left:.25in">
<span style="color:#002060">40% – Child 1<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:0in;margin-right:0in;margin-bottom:0in;margin-left:.25in">
<span style="color:#002060">40% – Child 2<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060">Father dies, leaving all of his estate to Child 1 and Child 2 equally. As a part of administering the estate, Child 1 and Child 2 want to change the ownership structure of each LLC
such that Child 1 owns Alpha LLC and Child 2 owns Bravo LLC.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><u><span style="color:#002060">Questions</span></u><span style="color:#002060">:
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060">Does this reallocation of ownership interests need to be reported as a transfer of controlling interest for the purpose of real estate excise tax?
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060">If so, does the exemption under WAC 458-61A-202 make the entire transaction exempt? I ask this because the other transfers are for less than a 50% controlling interest in the LLC.
Or does this have to be somehow reported as a partial exemption?<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060">Thanks in advance for your thoughts on this scenario.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="color:#002060"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:12.0pt"><b><span style="color:#002060">Mark B. Anderson<br>
</span></b><span style="color:#002060">ANDERSON LAW FIRM PLLC<br>
821 Dock Street, Suite 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:#002060">marka@mbaesq.com</span></a><br>
<a href="http://www.mbaesq.com/"><span style="color:#002060">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-family:"Arial Narrow",sans-serif;color:#002060">CONFIDENTIALITY NOTICE<br>
</span></b><span style="font-family:"Arial Narrow",sans-serif;color:#002060">This transmission is confidential and is intended solely for the use of the individual named recipient. It may be protected by the attorney-client privilege, work product doctrine,
or other confidentiality protection. If you are not the intended recipient, or the person responsible to deliver it to the intended recipient, be advised that any dissemination, distribution, or copying of this communication is prohibited. 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.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
</body>
</html>