Washington Real Estate Excise Tax Supplemental Statement

Real Estate Excise Tax Supplemental Statement
REV 84-0002ea
State of Washington
Department of Revenue
Miscellaneous Tax Section
PO Box 47477
Olympia WA 98504-7477

REAL ESTATE EXCISE TAX
SUPPLEMENTAL STATEMENT
(WAC 458-61A-304)

PLEASE NOTE: This completed document
cannot be saved to your hard drive without
the full version of Adobe Acrobat. If you are
not using the full version of Adobe Acrobat,
you must complete this form, then print.

This form must be submitted with the Real Estate Excise Tax Affidavit (FORM REV 84 0001A for deeded transfers and
Form REV 84 0001B for controlling interest transfers) for claims of tax exemption as provided below. Completion of this form is
required for the types of real property transfers listed in numbers 1-3 below. Only the first page of this form needs original signatures.
AUDIT: Information you provide on this form is subject to audit by the Department of Revenue. 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) Failure to provide supporting documentation
when requested may result in the assessment of tax, penalties, and interest. Any filing that is determined to be fraudulent will carry a
50% evasion penalty in addition to any other accrued penalties or interest when the tax is assessed.
Perjury in the second degree is a class C felony which is punishable by confinement in a state correctional institution for a maximum
term of five years, or by a fine in an amount fixed by the court of not more than $10,000, or by both such confinement and fine
(RCW 9A.72.030 and RCW 9A.20.021(1)(c)).
The persons signing below do hereby declare under penalty of perjury that the following is true (check appropriate statement):
1.

DATE OF SALE: (WAC 458-61A-306(2))
I, (print name)
certify that the
(type of instrument), dated
, was delivered to me in escrow by
(seller's name). NOTE: Agent named here must sign below and indicate name of firm. The payment of the tax is considered current if
it is not more than 90 days beyond the date shown on the instrument. If it is past 90 days, interest and penalties apply to the date of the
instrument.
Reasons held in escrow
Signature

Firm Name

2. GIFTS: (WAC 458-61A-201) The gift of equity is non-taxable; however, any consideration received is not a gift and is taxable. The
value exchanged or paid for equity plus the amount of debt equals the taxable amount. One of the boxes below must be checked.
Grantor (seller) gifts equity valued at $
to grantee (buyer).
NOTE: Examples of different transfer types are provided on the back. This is to assist you with correctly completing
this form and paying your tax.
"Consideration" means money or anything of value, either tangible (boats, motor homes, etc) or intangible, paid or delivered, or
contracted to be paid or delivered, including performance of services, in return for the transfer of real property. The term includes the
amount of any lien, mortgage, contract indebtedness, or other encumbrance, given to secure the purchase price, or any part thereof, or
remaining unpaid on the property at the time of sale. "Consideration" includes the assumption of an underlying debt on the property
by the buyer at the time of transfer.
A. Gifts with consideration
Grantor (seller) has made and will continue to make all payments after this transfer on the total debt of
1.
$
and has received from the grantee (buyer) $
(include in this figure the value of any items received in exchange for property). Any consideration received by
grantor is taxable.
2.
Grantee (buyer) will make payments on
% of total debt of $
for which grantor (seller)
is liable and pay grantor (seller) $
(include in this figure the value of any items received in
exchange for property). Any consideration received by grantor is taxable.
B. Gifts without consideration
1.
There is no debt on the property; Grantor (seller) has not received any consideration towards equity.
No tax is due.
2.
Grantor (seller) has made and will continue to make 100% of the payments on the total debt of $
and has not received any consideration towards equity. No tax is due.
3.
Grantee (buyer) has made and will continue to make 100% of the payments on total debt of $
and has not paid grantor (seller) any consideration towards equity. No tax is due.
4.
Grantor (seller) and grantee (buyer) have made and will continue to make payments from joint account on total
debt before and after the transfer. Grantee (buyer) has not paid grantor (seller) any consideration towards equity.
No tax is due.
Has there been or will there be a refinance of the debt?
YES
NO (If yes, please call 360-704-5905 to see if this transfer is
taxable). If grantor (seller) was on title as co-signor only, please see WAC 458-61A-215 for exemption requirements.
The undersigned acknowledge this transaction may be subject to audit and have read the above information regarding
record-keeping requirements and evasion penalties.
All Grantors (sellers) and Grantees (buyers) must sign below. Copies of this statement may be countersigned to
accommodate multiple signatures.

Grantors' Signatures

Grantees' Signatures

Date

Grantors' Names (print)
3.

Date

Grantees' Names (print)

IRS "TAX DEFERRED" EXCHANGE (WAC 458-61A-213)
I, (print name)
to
must sign below.

, certify that I am acting as an Exchange Facilitator in transferring real property
pursuant to IRC Section 1031, and in accordance with WAC 458-61A-213. NOTE: Exchange Facilitator

Exchange Facilitator’s Signature

Date

Exchange Facilitator’s Name (print)

For ask about the availability of this publication in an alternate format for the visually impaired, please call 360-705-6705. Teletype (TTY) users may use the
Washington Relay Service by calling 711.
REV 84 0002ea (7/20/23)

Reset This Form

Print This Form

COUNTY TREASURER

State of Washington
Department of Revenue
Miscellaneous Tax Section
PO Box 47477
Olympia WA 98504-7477

REAL ESTATE EXCISE TAX
SUPPLEMENTAL STATEMENT
(WAC 458-61A-304)

This form must be submitted with the Real Estate Excise Tax Affidavit (FORM REV 84 0001A for deeded transfers and
Form REV 84 0001B for controlling interest transfers) for claims of tax exemption as provided below. Completion of this form is
required for the types of real property transfers listed in numbers 1-3 below. Only the first page of this form needs original signatures.
AUDIT: Information you provide on this form is subject to audit by the Department of Revenue. 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) Failure to provide supporting documentation
when requested may result in the assessment of tax, penalties, and interest. Any filing that is determined to be fraudulent will carry a
50% evasion penalty in addition to any other accrued penalties or interest when the tax is assessed.
Perjury in the second degree is a class C felony which is punishable by confinement in a state correctional institution for a maximum
term of five years, or by a fine in an amount fixed by the court of not more than $10,000, or by both such confinement and fine
(RCW 9A.72.030 and RCW 9A.20.021(1)(c)).
The persons signing below do hereby declare under penalty of perjury that the following is true (check appropriate statement):
1.

DATE OF SALE: (WAC 458-61A-306(2))
I, (print name) Department of Revenue
certify that the Departmert
(type of instrument), dated 10/02
, was delivered to me in escrow by 654564
(seller's name). NOTE: Agent named here must sign below and indicate name of firm. The payment of the tax is considered current if
it is not more than 90 days beyond the date shown on the instrument. If it is past 90 days, interest and penalties apply to the date of the
instrument.
Reasons held in escrow 6546545646465465465465464645656465465
Signature

Firm Name

2. GIFTS: (WAC 458-61A-201) The gift of equity is non-taxable; however, any consideration received is not a gift and is taxable. The
value exchanged or paid for equity plus the amount of debt equals the taxable amount. One of the boxes below must be checked.
Grantor (seller) gifts equity valued at $ 100
to grantee (buyer).
NOTE: Examples of different transfer types are provided on the back. This is to assist you with correctly completing
this form and paying your tax.
"Consideration" means money or anything of value, either tangible (boats, motor homes, etc) or intangible, paid or delivered, or
contracted to be paid or delivered, including performance of services, in return for the transfer of real property. The term includes the
amount of any lien, mortgage, contract indebtedness, or other encumbrance, given to secure the purchase price, or any part thereof, or
remaining unpaid on the property at the time of sale. "Consideration" includes the assumption of an underlying debt on the property
by the buyer at the time of transfer.
A. Gifts with consideration
1.
Grantor (seller) has made and will continue to make all payments after this transfer on the total debt of
$ 100
and has received from the grantee (buyer) $ 100
(include in this figure the value of any items received in exchange for property). Any consideration received by
grantor is taxable.
Grantee (buyer) will make payments on 3213 % of total debt of $ 321321
for which grantor (seller)
2.
is liable and pay grantor (seller) $ 321321
(include in this figure the value of any items received in
exchange for property). Any consideration received by grantor is taxable.
B. Gifts without consideration
1.
There is no debt on the property; Grantor (seller) has not received any consideration towards equity.
No tax is due.
Grantor (seller) has made and will continue to make 100% of the payments on the total debt of $ 321321
2.
and has not received any consideration towards equity. No tax is due.
3.
Grantee (buyer) has made and will continue to make 100% of the payments on total debt of $ 321321321
and has not paid grantor (seller) any consideration towards equity. No tax is due.
4.
Grantor (seller) and grantee (buyer) have made and will continue to make payments from joint account on total
debt before and after the transfer. Grantee (buyer) has not paid grantor (seller) any consideration towards equity.
No tax is due.
YES
NO (If yes, please call 360-704-5905 to see if this transfer is
Has there been or will there be a refinance of the debt?
taxable). If grantor (seller) was on title as co-signor only, please see WAC 458-61A-215 for exemption requirements.
The undersigned acknowledge this transaction may be subject to audit and have read the above information regarding
record-keeping requirements and evasion penalties. All Grantor's (sellers) and Grantee's (buyers) must sign below.
Copies of this statement may be countersigned to accommodate multiple signatures.
All Grantors (sellers) and Grantees (buyers) must sign below. Copies of this statement may be countersigned to
accommodate multiple signatures.

Grantors' Signatures

Grantees' Signatures

Date

Grantors' Names (print)
3.

Date

Grantees' Names (print)

IRS "TAX DEFERRED" EXCHANGE (WAC 458-61A-213)
I, (print name) 321321
to 32132132
must sign below.

, certify that I am acting as an Exchange Facilitator in transferring real property
pursuant to IRC Section 1031, and in accordance with WAC 458-61A-213. NOTE: Exchange Facilitator

Exchange Facilitator’s Signature

Date

Exchange Facilitator’s Name (print)

For ask about the availability of this publication in an alternate format for the visually impaired, please call 360-705-6705. Teletype (TTY) users may use the
Washington Relay Service by calling 711.
REV 84 0002ea (7/20/23)

COUNTY ASSESSOR

State of Washington
Department of Revenue
Miscellaneous Tax Section
PO Box 47477
Olympia WA 98504-7477

PLEASE NOTE: This completed document
cannot be saved to your hard drive without
the full version of Adobe Acrobat. If you are
not using the full version of Adobe Acrobat,
you must complete this form, then print.

REAL ESTATE EXCISE TAX
SUPPLEMENTAL STATEMENT
(WAC 458-61A-304)

This form must be submitted with the Real Estate Excise Tax Affidavit (FORM REV 84 0001A for deeded transfers and
Form REV 84 0001B for controlling interest transfers) for claims of tax exemption as provided below. Completion of this form is
required for the types of real property transfers listed in numbers 1-3 below. Only the first page of this form needs original signatures.
AUDIT: Information you provide on this form is subject to audit by the Department of Revenue. 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) Failure to provide supporting documentation
when requested may result in the assessment of tax, penalties, and interest. Any filing that is determined to be fraudulent will carry a
50% evasion penalty in addition to any other accrued penalties or interest when the tax is assessed.
Perjury in the second degree is a class C felony which is punishable by confinement in a state correctional institution for a maximum
term of five years, or by a fine in an amount fixed by the court of not more than $10,000, or by both such confinement and fine
(RCW 9A.72.030 and RCW 9A.20.021(1)(c)).
The persons signing below do hereby declare under penalty of perjury that the following is true (check appropriate statement):
1.

DATE OF SALE: (WAC 458-61A-306(2))
I, (print name) Department of Revenue
certify that the Departmert
(type of instrument), dated 10/02
, was delivered to me in escrow by 654564
(seller's name). NOTE: Agent named here must sign below and indicate name of firm. The payment of the tax is considered current if
it is not more than 90 days beyond the date shown on the instrument. If it is past 90 days, interest and penalties apply to the date of the
instrument.
Reasons held in escrow 6546545646465465465465464645656465465
Signature

Firm Name

2. GIFTS: (WAC 458-61A-201) The gift of equity is non-taxable; however, any consideration received is not a gift and is taxable. The
value exchanged or paid for equity plus the amount of debt equals the taxable amount. One of the boxes below must be checked.
Grantor (seller) gifts equity valued at $ 100
to grantee (buyer).
NOTE: Examples of different transfer types are provided on the back. This is to assist you with correctly completing
this form and paying your tax.
"Consideration" means money or anything of value, either tangible (boats, motor homes, etc) or intangible, paid or delivered, or
contracted to be paid or delivered, including performance of services, in return for the transfer of real property. The term includes the
amount of any lien, mortgage, contract indebtedness, or other encumbrance, given to secure the purchase price, or any part thereof, or
remaining unpaid on the property at the time of sale. "Consideration" includes the assumption of an underlying debt on the property
by the buyer at the time of transfer.
A. Gifts with consideration
1.
Grantor (seller) has made and will continue to make all payments after this transfer on the total debt of
$ 100
and has received from the grantee (buyer) $ 100
(include in this figure the value of any items received in exchange for property). Any consideration received by
grantor is taxable.
Grantee (buyer) will make payments on 3213 % of total debt of $ 321321
for which grantor (seller)
2.
is liable and pay grantor (seller) $ 321321
(include in this figure the value of any items received in
exchange for property). Any consideration received by grantor is taxable.
B. Gifts without consideration
1.
There is no debt on the property; Grantor (seller) has not received any consideration towards equity.
No tax is due.
Grantor (seller) has made and will continue to make 100% of the payments on the total debt of $ 321321
2.
and has not received any consideration towards equity. No tax is due.
3.
Grantee (buyer) has made and will continue to make 100% of the payments on total debt of $ 321321321
and has not paid grantor (seller) any consideration towards equity. No tax is due.
4.
Grantor (seller) and grantee (buyer) have made and will continue to make payments from joint account on total
debt before and after the transfer. Grantee (buyer) has not paid grantor (seller) any consideration towards equity.
No tax is due.
YES
NO (If yes, please call 360-704-5905 to see if this transfer is
Has there been or will there be a refinance of the debt?
taxable). If grantor (seller) was on title as co-signor only, please see WAC 458-61A-215 for exemption requirements.
The undersigned acknowledge this transaction may be subject to audit and have read the above information regarding
record-keeping requirements and evasion penalties.
All Grantors (sellers) and Grantees (buyers) must sign below. Copies of this statement may be countersigned to
accommodate multiple signatures.

Grantors' Signatures

Grantees' Signatures

Date

Grantors' Names (print)
3.

Date

Grantees' Names (print)

IRS "TAX DEFERRED" EXCHANGE (WAC 458-61A-213)
I, (print name) 321321
to 32132132
must sign below.

, certify that I am acting as an Exchange Facilitator in transferring real property
pursuant to IRC Section 1031, and in accordance with WAC 458-61A-213. NOTE: Exchange Facilitator

Exchange Facilitator’s Signature

Date

Exchange Facilitator’s Name (print)

For ask about the availability of this publication in an alternate format for the visually impaired, please call 360-705-6705. Teletype (TTY) users may use the
Washington Relay Service by calling 711.
REV 84 0002ea (7/20/23)

Reset This Form

Print This Form

DEPARTMENT OF REVENUE

State of Washington
Department of Revenue
Miscellaneous Tax Section
PO Box 47477
Olympia WA 98504-7477

REAL ESTATE EXCISE TAX
SUPPLEMENTAL STATEMENT
(WAC 458-61A-304)

This form must be submitted with the Real Estate Excise Tax Affidavit (FORM REV 84 0001A for deeded transfers and
Form REV 84 0001B for controlling interest transfers) for claims of tax exemption as provided below. Completion of this form is
required for the types of real property transfers listed in numbers 1-3 below. Only the first page of this form needs original signatures.
AUDIT: Information you provide on this form is subject to audit by the Department of Revenue. 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) Failure to provide supporting documentation
when requested may result in the assessment of tax, penalties, and interest. Any filing that is determined to be fraudulent will carry a
50% evasion penalty in addition to any other accrued penalties or interest when the tax is assessed.
Perjury in the second degree is a class C felony which is punishable by confinement in a state correctional institution for a maximum
term of five years, or by a fine in an amount fixed by the court of not more than $10,000, or by both such confinement and fine
(RCW 9A.72.030 and RCW 9A.20.021(1)(c)).
The persons signing below do hereby declare under penalty of perjury that the following is true (check appropriate statement):
1.

DATE OF SALE: (WAC 458-61A-306(2))
I, (print name) Department of Revenue
certify that the Departmert
(type of instrument), dated 10/02
, was delivered to me in escrow by 654564
(seller's name). NOTE: Agent named here must sign below and indicate name of firm. The payment of the tax is considered current if
it is not more than 90 days beyond the date shown on the instrument. If it is past 90 days, interest and penalties apply to the date of the
instrument.
Reasons held in escrow 6546545646465465465465464645656465465
Signature

Firm Name

2. GIFTS: (WAC 458-61A-201) The gift of equity is non-taxable; however, any consideration received is not a gift and is taxable. The
value exchanged or paid for equity plus the amount of debt equals the taxable amount. One of the boxes below must be checked.
Grantor (seller) gifts equity valued at $ 100
to grantee (buyer).
NOTE: Examples of different transfer types are provided on the back. This is to assist you with correctly completing
this form and paying your tax.
"Consideration" means money or anything of value, either tangible (boats, motor homes, etc) or intangible, paid or delivered, or
contracted to be paid or delivered, including performance of services, in return for the transfer of real property. The term includes the
amount of any lien, mortgage, contract indebtedness, or other encumbrance, given to secure the purchase price, or any part thereof, or
remaining unpaid on the property at the time of sale. "Consideration" includes the assumption of an underlying debt on the property
by the buyer at the time of transfer.
A. Gifts with consideration
1.
Grantor (seller) has made and will continue to make all payments after this transfer on the total debt of
$ 100
and has received from the grantee (buyer) $ 100
(include in this figure the value of any items received in exchange for property). Any consideration received by
grantor is taxable.
Grantee (buyer) will make payments on 3213 % of total debt of $ 321321
for which grantor (seller)
2.
is liable and pay grantor (seller) $ 321321
(include in this figure the value of any items received in
exchange for property). Any consideration received by grantor is taxable.
B. Gifts without consideration
1.
There is no debt on the property; Grantor (seller) has not received any consideration towards equity.
No tax is due.
Grantor (seller) has made and will continue to make 100% of the payments on the total debt of $ 321321
2.
and has not received any consideration towards equity. No tax is due.
3.
Grantee (buyer) has made and will continue to make 100% of the payments on total debt of $ 321321321
and has not paid grantor (seller) any consideration towards equity. No tax is due.
4.
Grantor (seller) and grantee (buyer) have made and will continue to make payments from joint account on total
debt before and after the transfer. Grantee (buyer) has not paid grantor (seller) any consideration towards equity.
No tax is due.
YES
NO (If yes, please call 360-704-5905 to see if this transfer is
Has there been or will there be a refinance of the debt?
taxable). If grantor (seller) was on title as co-signor only, please see WAC 458-61A-215 for exemption requirements.
The undersigned acknowledge this transaction may be subject to audit and have read the above information regarding
record-keeping requirements and evasion penalties.
All Grantors (sellers) and Grantees (buyers) must sign below. Copies of this statement may be countersigned to
accommodate multiple signatures.

Grantors' Signatures

Grantees' Signatures

Date

Grantors' Names (print)
3.

Date

Grantees' Names (print)

IRS "TAX DEFERRED" EXCHANGE (WAC 458-61A-213)
I, (print name) 321321
to 32132132
must sign below.

, certify that I am acting as an Exchange Facilitator in transferring real property
pursuant to IRC Section 1031, and in accordance with WAC 458-61A-213. NOTE: Exchange Facilitator

Exchange Facilitator’s Signature

Date

Exchange Facilitator’s Name (print)

For ask about the availability of this publication in an alternate format for the visually impaired, please call 360-705-6705. Teletype (TTY) users may use the
Washington Relay Service by calling 711.
REV 84 0002ea (7/20/23)

TAXPAYER

WAC 458-61A-201 Gifts. (1) Introduction. Generally, a gift of real property is not a sale, and is not subject to the real estate excise tax. A gift of real
property is a transfer for which there is no consideration given in return for granting an interest in the property. If consideration is given in return for the
interest granted, then the transfer is not a gift, but a sale, and it is subject to the real estate excise tax to the extent of the consideration received.
(2) Consideration. See WAC 458-61A-102 for the definition of "consideration." Consideration may also include: (a) Monetary payments from the grantee
to the grantor; or (b) Monetary payments from the grantee toward underlying debt (such as a mortgage) on the property that was transferred, whether the
payments are made toward existing or refinanced debt.

(3) Assumption of debt. If the grantee agrees to assume payment of the grantor's debt on the property in return for the transfer, there is consideration, and
the transfer is not exempt from tax. Real estate excise tax is due on the amount of debt assumed, in addition to any other form of payment made by the grantee
to the grantor in return for the transfer. However, equity in the property can be gifted.
(4) Rebuttable presumption regarding refinancing transactions. (a) There is a rebuttable presumption that the transfer is a sale and not a gift if the
grantee is involved in a refinance of debt on the property within six months of the time of the transfer. (b) There is a rebuttable presumption that the transfer
is a gift and not a sale if the grantee is involved in a refinance of debt on the property more than six months from the time of the transfer.
(5) Documentation. (a) A completed real estate excise tax affidavit is required for transfers by gift. A supplemental statement approved by the department
must be completed and attached to the affidavit. The supplemental statement will attest to the existence or absence of underlying debt on the property, whether
the grantee has or will in the future make any payments on the debt, and whether a refinance of debt has occurred or is planned to occur. The statement must be
signed by both the grantor and the grantee. (b) The grantor must retain financial records providing proof that grantor is entitled to this exemption in case of
audit by the department. Failure to provide records upon request will result in subsequent denial of the exemption.

(6) Examples. (a) Overview. The following examples, while not exhaustive, illustrate some of the circumstances in which a grant of an interest in real
property may qualify for this exemption. These examples should be used only as a general guide. The taxability of each transaction must be determined after a
review of all the facts and circumstances.

(b) Examples--No debt. (i) John conveys his residence valued at $200,000 to Sara. John comes off of the title. There is no underlying debt on the property,
and Sara gives John no consideration for the transfer. The conveyance from John to Sara qualifies for the gift exemption from real estate excise tax. (ii) Keith
and Jean, as joint owners, convey their residence valued at $200,000 to Jean as her sole property. There is no underlying debt on the property. In exchange
for Keith's one-half interest in the property, Jean gives Keith $10,000. Keith has made a gift of $90,000 in equity, and received consideration of $10,000.
Real estate excise tax is due on the $10,000.

(c) Examples--Existing debt. (i) Josh conveys his residence valued at $200,000 to Samantha. Josh has $25,000 in equity and an underlying debt of
$175,000. Josh continues to make the mortgage payments out of his own funds, and Samantha does not contribute any payments toward the debt. Since Josh
continues to make the payments, there is no consideration from Samantha to Josh, and the transfer qualifies for exemption as a gift. (ii) Josh conveys the
residence to Samantha, and after the transfer, Samantha begins to make payments on the debt. Josh does not contribute to the payments on the debt after the
title is transferred. Josh has made a gift of his $25,000 equity, but real estate excise tax is due on the $175,000 debt that Samantha is now paying. (iii) Dan
conveys his residence valued at $200,000 to himself and Jill as tenants in common. Dan has $25,000 in equity and an underlying debt of $175,000. Dan and
Jill open a new joint bank account, to which they both contribute funds equally. Mortgage payments are made from their joint account. There is a rebuttable
presumption that real estate excise tax is due on the conveyance because Jill appears to be contributing toward payments on the debt. In that case, real estate
excise tax is due on the consideration given by Jill, (50% of the underlying debt) based upon her contributions to the joint account. The tax will be calculated
on a one-half interest in the existing debt ($87,500). (iv) Dan conveys the residence to himself and Jill. Dan has $25,000 in equity, and a mortgage of
$175,000. Dan and Jill open a new joint bank account, which is used to make the mortgage payments, but Dan contributes 100% of the funds to the account.
The conveyance is exempt from real estate excise tax, because Jill has not given any consideration in exchange for the transfer. (v) Bob conveys his residence
valued at $200,000 to himself and Jane as tenants in common. Bob has $25,000 equity, and an underlying debt of $175,000. Bob and Jane have contributed
varying amounts to an existing joint bank account for many years prior to the conveyance. Mortgage payments have been made from the joint account both
before and after the transfer. The conveyance is exempt from real estate excise tax, because Jane's contributions toward the joint account from which the
payments are made is not deemed consideration in exchange for the transfer from Bob (because she made contributions for many years before the transfer as
well as after the transfer, there is no evidence that her payments were consideration for the transfer). (vi) Bill and Melanie, as joint owners, convey their
residence valued at $200,000 to Melanie, as her sole property. There is an underlying debt of $170,000. Prior to the transfer, both Bill and Melanie had
contributed to the monthly payments on the debt. After the transfer, Melanie begins to make 100% of the payments, with Bill contributing nothing toward the
debt. Bill's equity ($15,000) is a gift, but Melanie's taking over the payments on the mortgage is consideration received by Bill. Real estate excise tax is due
on $85,000 (Bill's fractional interest in the property multiplied by the outstanding debt at the time of transfer: 50% x $170,000). (vii) Casey and Erin, as joint
owners, convey their residence to Erin. There is an underlying debt of $170,000 in both their names. For the three years prior to the transfer, Erin made 100%
of the payments on the debt. After the transfer, Erin continues to make 100% of the payments. The transfer is exempt from the real estate excise tax because
Erin made all the payments on the property before the transfer as well as after the transfer; there is no evidence that her payments were consideration for the
transfer.

(d) Examples--Refinanced debt. (i) Bob conveys his residence to himself and Jane. Within one month of the transfer, Bob and Jane refinance the underlying
debt of $175,000 in both their names, but Bob continues to make the payments on the debt. Jane does not contribute any funds toward the payments. The
conveyance qualifies for the gift exemption because Jane gave no consideration for the transfer. (ii) Casey and Erin, as joint owners, convey their residence
valued at $200,000 to Erin as sole owner. There is an underlying mortgage on the property of $170,000. Prior to the transfer, Casey and Erin had both
contributed to the monthly mortgage payments. Within one month of the transfer, Erin refinances the mortgage in her name only and begins to make
payments from her separate account. In this case, there is a rebuttable presumption that this is a disguised sale, since Erin, through her refinance, has assumed
sole responsibility for the underlying debt. Real estate excise tax is due on $85,000 (Casey's fractional interest in the property multiplied by the total debt on
the property: 50% x $170,000). (iii) Kyle conveys his residence valued at $200,000 to himself and Amy as tenants in common. Kyle has $25,000 in equity,
and an underlying debt of $175,000. Within one month of the transfer, Kyle and Amy refinance the mortgage in both their names, and open a joint bank
account to which they contribute funds equally. Payments on the new mortgage are made from the joint account. There is a rebuttable presumption that
Amy's contributions to the joint account are consideration for the transfer, since Amy appears to have agreed to pay half of the monthly debt payment, and
real estate excise tax may be due. The measure of the tax is one-half of the underlying debt to which Amy is contributing ($87,500). (iv) Kyle conveys his
residence to himself and Amy. Kyle continues to make the payments on the underlying debt of $175,000. Nine months after the transfer, Kyle and Amy
refinance the property in both of their names. After the refinance, Kyle and Amy contribute equally to a new joint bank account from which the mortgage
payments are now made. Amy's contribution to the mortgage nine months after the transfer is not deemed consideration in exchange for the transfer from
Kyle to the two of them as tenants in common. The conveyance will qualify for the gift exemption.
(e) Example--Refinanced debt--"Cosigner." Charlie and Sadie, a married couple, own a residence valued at $200,000 with an underlying mortgage of
$170,000. Sadie receives the property when they divorce. After a few months, Sadie tries to refinance, but her credit is insufficient to obtain a loan in her
name only. Aunt Grace offers to assist her by becoming a "co-borrower" on the loan. As a result, the bank requires that Aunt Grace be added to the title.
Following the refinance, Sadie makes 100% of the payments on the new debt, and Aunt Grace gives no consideration for being added to the title. The
conveyance adding Aunt Grace to the title is exempt from real estate excise tax. Although the quitclaim deed from Sadie to Aunt Grace may be phrased as a
gift, the transfer is exempt as Aunt Grace's presence on the title acts as an exempt security interest to protect Aunt Grace in the event Sadie defaults on her
mortgage. See WAC 458-61A-215 for this exemption.
(f) Example--Rental or commercial property. Sue owns a rental property valued at $200,000, with an underlying mortgage of $175,000. Sue conveys the
property to herself and Zack as tenants in common. Prior to the transfer, the rental income went to a bank account in Sue's name only, and she made the
mortgage payments from that account. After the transfer, Zack's name is added to the bank account. The rental income is now deposited in the joint account,
and the mortgage payments are made from that account. There is a rebuttable presumption that this is a taxable transaction, because this appears to be a
business arrangement. As a business venture, one-half of the rental income now belongs to Zack, and is being contributed toward payment of the mortgage.
The real estate excise tax will be due on the one-half interest of the debt contributed by Zack ($87,500).
REV 84 0002 instr. (7/20/23)