FloridadoCuMentaryStaMptaX&tranSFerSoFenCuMberedproperty
tax law Section
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the extent of the transferor’s
continued beneficial ownership as
a trust beneficiary, regardless of
whether or not the transferred
real property is encumbered by a
mortgage. Furthermore, a deed of
real property from the grantor of
a revocable trust to the trustee
of a revocable trust, and a deed
back to the grantor from the
trustee upon the revocation of a
revocable trust, are not transfers
of ownership that would be
subject to documentary stamp
tax even when the property is
encumbered by a mortgage.
If a person other than the
transferor is a trust beneficiary,
then a deed from the transferor
to the trustee is taxable to the
extent of the consideration for
the beneficial interest in the
real property transferred to such
other persons. For this purpose,
mortgage indebtedness will be
treated as consideration and
documentary stamp tax will
be based on the non-grantor
beneficiaries’ proportionate share
of the mortgage indebtedness.
The documentary stamp tax
consequences of transfers of
real estate to entities (including
single-member limited liability
companies) are discussed in Rule
12B-4.060. If the transfer results
in an assignment of beneficial
interest (e.g., the ownership of
the real estate before and after
the transfer is not consistent) then
the transfer is taxable; however,
unlike transfers to trusts, a transfer
to an entity may still be taxable
even when there is no shift in
beneficial interest. Example 6 found
in Rule 12B-4.060(9)(f) provides that
the transfer of encumbered real
property from an individual to an
LLC owned solely by the individual
is subject to documentary stamp
taxes based on the mortgage balance.
There are numerous other
nuances and exceptions in the
world of Florida documentary
stamp taxes, but it is important
that both practitioners and clients
approach any transfer of real
property with caution. n
Authors: Christopher Dingman -
Buchanan Ingersoll & Rooney and
Matthew Schnitzlein - Macfarlane
Ferguson & McMullen
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