Did Washington charge real estate excise tax when a court ordered commonly owned land sold instead of partitioned?

Plain-English summary

The Washington AG concluded that a court ordered sale of land owned by tenants in common triggered the one percent real estate excise tax described in the 1957 statute. The court had found that the land could not be physically partitioned, ordered a referee to sell it, and one of the co-owners bought it. The statute excluded a partition of property by agreement or court decree, but the AG distinguished dividing the property itself from selling it and dividing the proceeds. The buyer's status as a former co-owner did not change the result.

The opinion states: “There was merely a division between the tenants in common of the proceeds of the sale, rather than a partition of the real property between the tenants in common.” (source).

Currency note

This opinion was issued in 1957. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did a court ordered partition sale count as a taxable sale?
A: Yes, on these facts. The referee transferred the property for consideration after the court ordered sale rather than physical division.

Q: Why did the partition exception not apply?
A: The AG read the exception as covering a partition of real property among co-owners. Here the owners divided sale proceeds, not the land.

Q: Did it matter that another co-owner bought the land?
A: No. The opinion expressly said the purchaser's status as a tenant in common did not alter the tax result.

Background and statutory framework

The Lincoln County prosecutor asked whether the one percent tax applied after a referee sold jointly owned land in a partition action. The AG applied RCW 28.45.010's definition of “sale” and its express exclusion for partition of property by tenants in common.

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/real-estate-excise-tax-tenants-common

Original opinion text

Attorney General John J. O'Connell

REAL ESTATE EXCISE TAX‑-TENANTS IN COMMON

An order by the court directing a sale of property owned by tenants in common and the sale thereafter is a taxable sale for real estate excise tax purposes.

January 28, 1957

Honorable Willard A. Zellmer
Prosecuting Attorney
Lincoln County
Davenport, Washington Cite as: AGO 57-59 No. 8

Dear Sir:

In your letter of January 2, 1957, you inquired whether the one per cent real estate excise tax would apply to the following situation:

Certain real estate was owned by tenants in common and an action was brought by one of them against the others for partition.

The court held that the property could not be physically partitioned, directed that it be sold, and appointed a referee for that purpose; the property was duly advertised and sold by the referee to one of the defendants in the partition action.

It is our conclusion that the transfer ordered by the court in the above situation constitutes a "sale" as defined by RCW 28.45.010.

ANALYSIS

To determine whether a particular transaction comes within the provision of the real estate excise tax as set forth in chapter 28.45 RCW, reference must be made to the definition of a "sale" as defined in RCW 28.45.010. The above statute defines "sale" in part to:

" * * include any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or title to real property, including standing timber, or any estate or interest therein for a valuable consideration, * * "

On the basis of the excerpt above it would appear that a sale pursuant to an order of the court resulting from a request for the partitioning of real estate would come within the above definition and thus be subject to the one percent tax.

[[Orig. Op. Page 2]]

The question then is whether the above facts come within the exclusionary provisions of the term "sale" wherein, in RCW 28.45.010, it is further provided in part as follows:

"The term shall not include * * * the partition of property by tenants in common by agreement or as the result of a court decree * * *"

The above quoted language clearly excludes from the definition of a "sale" a conveyance between tenants in common for a partition of real property pursuant to an agreement or as the result of an order of the court. However, in the situation with which we are here concerned, the court did not order a partition of the property, but rather directed that the property be sold. There was merely a division between the tenants in common of the proceeds of the sale, rather than a partition of the real property between the tenants in common. The fact that one of the tenants in common was the purchaser would not alter the result.

Consequently there was no partition of the real property. In our view the language of RCW 28.45.010,supra, excluding from the term "sale" the partitioning of property by tenants in common by agreement or as the result of a court decree, does not cover the sale ordered by the court about which you inquire.

Since the facts stated above do not come within the exclusionary provisions of the definition of a "sale," we conclude that there was a taxable transfer of real property within the definition of a "sale" as provided in RCW 28.45.010, supra.

We hope the above comments will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

ROBERT L. SIMPSON
Assistant Attorney General