Form 84 0001be (A) - Real Estate Excise Tax Affidavit Controlling Interest Transfer Return Page 4
Download a blank fillable Form 84 0001be (A) - Real Estate Excise Tax Affidavit Controlling Interest Transfer Return in PDF format just by clicking the "DOWNLOAD PDF" button.
Open the file in any PDF-viewing software. Adobe Reader or any alternative for Windows or MacOS are required to access and complete fillable content.
Complete Form 84 0001be (A) - Real Estate Excise Tax Affidavit Controlling Interest Transfer Return with your personal data - all interactive fields are highlighted in places where you should type, access drop-down lists or select multiple-choice options.
Some fillable PDF-files have the option of saving the completed form that contains your own data for later use or sending it out straight away.
ADVERTISEMENT
1
2
3
4(8) Reporting requirements. The transfer of a controlling interest in real property must be reported to the department when no instrument is
recorded in the official real property records of the county in which the property is located. If the transfer is not taxable due to an exemption,
that exemption should be stated on the affidavit.
(a) The sale must be reported by the seller to the department within five days from the date of the sale on the department of revenue
affidavit form, DOR Form 84-0001B. The affidavit form must be signed by both the seller and the buyer, or their agent, and must be
accompanied by payment of the tax due.
(b) The affidavit form may also be used to disclose the sale, in which case: (i) It must be signed by the person making the disclosure; and
(ii) It must be accompanied by payment of the tax due only when submitted by a seller reporting a taxable sale.
(c) Any person who intentionally makes a false statement on any return or form required to be filed with the department under this chapter
is subject to penalty of perjury.
(d) Examples.
The following examples, while not exhaustive, illustrate some of the circumstances in which the transfer of an interest in an entity must be
reported to the department. These examples should be used only as a general guide. The status of each situation must be determined after a
review of all of the facts and circumstances.
(i) Simon and Peter each own 40% of the voting shares of a corporation. Paul, Matthew, Mark, and John each own 5% voting shares.
Paul acquires Peter's 40% interest, and Matthew's and Mark's 5% interests. This is a taxable acquisition because a controlling interest
(50% or more) was acquired by Paul (40% from Peter plus 5% from Matthew and 5% from Mark). This transaction must be reported.
(ii) Assume same facts as in example (d)(i) of this subsection. Paul's attorney advises him that for his protection, Paul should file an
affidavit to disclose the sale. Paul files an affidavit to disclose the sale to the department within thirty days of the date of sale. Peter,
Matthew, and Mark go on vacation and the affidavit and required tax payment is not sent to the department. The department notifies
Peter, Matthew, and Mark of their tax liability, which now includes interest and penalties. Due to Paul's disclosure, Paul is relieved of
any personal liability for the tax, interest, or penalties.
(iii) Assume the same facts as in example (d)(i) of this subsection, except Paul only acquires Peter's 40% interest and Matthew's 5%
interest. This is not a taxable acquisition because a controlling interest (50% or more) was not acquired by Paul. This transaction does
not need to be reported.
(9) Due date, interest and penalties. The tax imposed is due and payable immediately on the date of sale. See WAC 458-61A-306 for
interest and penalties that may apply.
(10) Transfers after tax has been paid. When there is a transfer or acquisition of a controlling interest in an entity and the real estate excise
tax is paid on the transfer, and there is a subsequent acquisition of an additional interest in the same entity within the same twelve-month
period by a person acting in concert with the previous buyer(s), the subsequent seller is liable for its proportional portion of the tax. After
payment by the subsequent seller of its proportional share, the person(s) who previously paid the tax may apply to the department for a refund
of the amount overpaid because of the new proportional amount paid as a result of the subsequent transfer or acquisition.
(11) Exemptions. Because transfer and acquisition of a controlling interest in an entity that owns real estate in this state is statutorily defined
as a "sale" of the real property owned by the entity, the exemptions of chapter 82.45 RCW and this chapter also apply to the sale of a
controlling interest.
Examples.
(a) The merger of a wholly owned subsidiary owning real property located in this state with another subsidiary wholly owned by the same
parent is a transfer of a controlling interest. However, this transfer may be exempt from taxation on two grounds. First, it may be exempt
because it is a mere change in form or identity (see WAC 458-61A-211). Second, it may be exempt if it qualifies under the nonrecognition
of gain or loss provisions of the Internal Revenue Code for entity formation, liquidation and dissolution, and reorganization. (See WAC
458-61A-212.)
(b) Taki owns 100% of a corporation. Taki wants her child, Mieko, and corporate manager, Sage, to be co-owners with her in the
corporation. Taki makes a gift of 50% of the voting stock to Mieko and sells 33 1/3% to Sage. Although a controlling interest in the
corporation has been transferred to and acquired by Mieko, it is not taxed because a gift is an exempt transfer and not considered for
purposes of determining whether a controlling interest has transferred. The sale of the 33 1/3% interest to Sage is not a controlling interest,
and is not taxed.
(c) Richard owns 75% of the voting stock of a corporation that owns real estate located in this state. Richard pledges all of his corporate
stock to secure a loan with a bank. When Richard defaults on the loan and the bank forecloses on Richard's stock in the corporation, the
transfer and acquisition of the controlling interest of the entity is not a taxable transaction because foreclosures of mortgages and other
security devices are exempt transfers (See WAC 458-61A-208).
Audit:
Information you provide on this form is subject to audit by the Department of Revenue. Underpayments of tax will result in the issuance
of a tax assessment with interest and penalties. Note: in the event of an audit, it is the taxpayers’ responsibility to provide documentation
to support the selling price or any exemption claimed. This documentation must be maintained for a minimum of four years from
date of sale (RCW 82.45.100).
Ruling requests:
You may request a predetermination of your tax liability. The written opinion will be binding on both you and the Department based on
the facts presented (WAC 458-20-100(9)). Send your ruling request to:
Department of Revenue
Taxpayer Information & Education
P.O. Box 47478
Olympia, WA 98504-7478
FAX (360) 705-6655
Perjury:
Perjury is a class C felony which is punishable by imprisonment in the state correctional institution for a maximum term of not more than
five years, or by a fine in an amount fixed by the court of not more than five thousand dollars ($5,000.00), or by both imprisonment and
fine (RCW 9A.20.020 (1C)).
For tax assistance visit or call (360) 570-3265. To inquire about the availability of this document in an alternate format for
the visually impaired, please call (360) 705-6715. Teletype (TTY) users may call 1-800-451-7985.
REV 84 0001Be (a) (12/29/06)
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial