Form Rev 84-0001b - Real Estate Excise Tax Affidavit/return - 1998 Page 2
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1
2Please use a current Real Estate Excise Tax Rate schedule (Form REV 84 0013) when computing the tax due. This schedule is
available at your County Treasurer’s office or by calling the Miscellaneous Tax Section, Department of Revenue (360) 753-5545.
Questions regarding the taxability of transactions should be directed, in writing, to the Miscellaneous Tax Section, Department of
Revenue, PO Box 47477, Olympia, WA 98504-7477.
cannot be reasonably be determined, the market value assessment for
The following information is extracted from WAC 458-61-025:
the property maintained on the county property tax rolls at the time
Definitions.
of the sale shall be used as the selling price.
(a) The term “transfer of a controlling interest in an entity”
Example 1 - A partnership owns real property and consists of two
means the transfer or acquisition within any twelve-month
partners, A and B. The true and fair value of the real property
period of a controlling interest in any entity with an interest in
owned by the partnership is $100,000. Each has a 50% partnership
real property located in this state for a valuable consideration.
interest. A transfers it’s 50% interest in the partnership to B for
For purposes of this subsection, all acquisitions of persons
valuable consideration. The taxable selling price is the true and
acting in concert shall be aggregated for purposes of
fair value of the real property owned by the partnership, or
determining whether a transfer or acquisition of a controlling
$100,000.
interest has taken place.
Example 2 - B corporation owns real property and consists of
(b) “Controlling interest” means: (i) In the case of a corporation,
three stockholders, X, Y and Z. The true and fair value of the real
either fifty percent or more of the total combined voting power
property owned by the corporation is $200,000. X, Y and Z each
of all classes of stock of the corporation entitled to vote, or
own one-third interest of the corporation. X and Y transfer their
fifty percent of the capital, profits, or beneficial interest in the
two-thirds interest in the corporation to Z for valuable
voting stock of the corporation; and; (ii) In the case of a
consideration. The taxable selling price is the true and fair value
partnership, association, trust, or other entity, fifty percent or
of the real property owned by the corporation, or $200,000.
more of the capital, profits, or beneficial interest in such
Date of Sale. Where the controlling interest is acquired in one
partnership, association, trust, or other entity.
transaction, the actual date of transfer of the controlling interest
shall be considered the date of sale. Examples of when an interest
(c) The terms “person” or “company” are herein used
in an entity is transferred includes when the payment is received
interchangeably, means any individual, receiver,
by the seller and the shares of stock are delivered to the buyer, or
administrator, executor, assignee, trustee in bankruptcy, trust,
when payment is received by the seller and partnership documents
estate, firm, copartnership, joint venture, club, company, joint
are signed, etc.
stock company, business trust, municipal corporation,
political subdivision of the state of Washington, corporation,
(a) Where the acquisition of a controlling interest involves the
association, society, or any group of individuals acting as a
aggregation of interests of persons acting in concert, the
unit, whether mutual, cooperative, fraternal, nonprofit, or
selling price of each transfer or acquisition shall be
otherwise and the United States or any instrumentality
determined as the actual date of that transfer or acquisition.
thereof.
The actual date control is transferred, not the date of the
contract arranging the transfer, determines if the transactions
(d) “True and fair value” means market value which is the
falls within the twelve month period.
amount of money which a willing, but unobliged, buyer would
pay a willing, but unobligated, owner for real property, taking
Tax Liability. Where there is a transfer or acquisition of a
into consideration all reasonable, possible uses of the
controlling interest in an entity that has an interest in real property
property.
on or after July 1, 1993, in general, the seller of the interest is liable
for the tax.
(e) The “twelve month period” is any twelve months and may
span two calendar years. The twelve month period begins at
(a) Where the seller has not paid the tax by the due date and
the first transfer or acquisition of any controlling interest and
neither the buyer nor the seller has notified the department of
may relate back or forward as far as twelve months from the
the sale within 30 days of the sale, the buyer will also become
first transfer or acquisition of the interest.
liable for the tax.
(f) “Acting in concert” occurs: (i) When one or more persons
(b) Where the controlling interest is transferred by a series of
have a relationship with each other such that one person
sales, each seller is liable for its proportional share of the tax
influences or controls the actions of another through common
valued on the date of sale.
ownership. For example, if a parent corporation and a
Filing of Returns. For a sale of a beneficial interest in real property
wholly-owned subsidiary each purchase a 25% interest in an
where a tax is due under this chapter and where no instrument is
entity, the two corporations will be considered to have acted in
recorded in the official real property records of the county in which
concert to acquire a controlling interest (i.e. 50%) in the
the property is located, the sale shall be reported to the department.
entity; (ii) Where individuals or entities are not commonly
controlled or owned but the unity with which purchasers have
(a) The sale shall be reported within five days from the date of the
negotiated and will consummate the acquisition of ownership
sale on the Department of Revenue Affidavit Form, 84-0001B.
interests indicates that they are acting as a single entity.
(b) The Affidavit Form shall be signed by both the seller and the
In General. In order for the tax to apply when the controlling
buyer and shall be accompanied by payment of the tax due.
interest in an entity which has an interest in real property in this
The affidavit form shall also be used to disclose the sale, in
state has been transferred, the following elements must have
which case; (i) It shall be signed by either seller or the buyer,
occurred:
dependent on the status of the person making disclosure; (ii)
It shall be accompanied by payment of the tax due only when
(a) The transfer or acquisition of the controlling interest must
submitted by the seller.
have occurred within a twelve month period;
(c) Any person who intentionally makes a false statement on any
(b) The controlling interest must have been acquired by a single
return or form required to be filed with the department under
person, or a group of persons acting in concert which
this chapter shall be guilty of perjury.
aggregate to a controlling interest;
(c) The entity must have an interest in real property located in
Due Date, Interest and Penalties. The tax imposed is due and
this state; and,
payable immediately at the date of sale. Please see RCW 82.45.100
for interest and penalty computations.
(d) The transfer is not otherwise exempt under Chapter 82.45
RCW and Chapter 458-61 WAC.
Measure of the Tax. The measure of the tax is the selling price. The
Exemptions. As the transfer and acquisition of a controlling
selling price shall be the true and fair value of the real property
interest in an entity which owns real estate in this state is statutorily
owned by the entity and located in this state. The true and fair value
defined as “sale” of the real property owned by the entity, the
may be determined by a fair market value appraisal of the property
exemptions of Chapter 82.45 RCW also apply to the sale of a
or by an allocation of assets by the seller and the buyer made
controlling interest.
pursuant to section 1060 of the Internal Revenue Code of 1986. If the
true and fair value of the property to be valued at the time of the sale
To inquire about the availability of this form in an alternate format for the visually impaired or a language other than English,
please call (360) 753-3217. Teletype (TTY) users may call (800) 451-7985. You may also access tax information on our Internet
home page at Under the “Forms” hot button, go to “Other Forms and Schedules”.
REV 84 0001B-2 (6-08-98)
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