Was a deed from a land trust to a living trust taxable when the sole beneficial owner stayed the same?

Plain-English summary

A person served as trustee and sole primary beneficiary of a land trust holding the person's unencumbered Florida residence. To seek homestead treatment, the person planned to convey the property from the land trust to a living trust.

Florida's rule taxed a deed to or from a trustee only to the extent it transferred beneficial ownership and involved consideration. The same individual remained the beneficial owner after the transfer.

Florida therefore found no documentary stamp tax liability on the deed from the land trust to the living trust.

What this means for you

The trust names on title do not alone decide deed tax. The analysis turns on whether beneficial ownership changes and whether consideration exists.

Common questions

Was the property mortgaged? No. The ruling stated there were no mortgages, liens, or encumbrances.

Why was the transfer proposed? The beneficiary wanted title structured to seek homestead exemption treatment.

Did beneficial ownership change? No. The same person remained the sole beneficial owner.

Citations and references

• Fla. Stat. § 201.02 (documentary stamp tax on deeds)
• Fla. Stat. ch. 689 (trust conveyances)
• Fla. Admin. Code r. 12B-4.013(32) (trust deeds and beneficial ownership)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06B4-002

Original ruling text

SUMMARY
QUESTION: Whether a deed conveying property from a land trust to a living trust is subject to documentary stamp
tax.
ANSWER - Based on Facts Below: No. The conveyances of real property from a Land Trust to a Living Trust will not
incur tax.

March 16, 2006

Re: Technical Assistance Advisement No. 06B4-002
Documentary Stamp Tax
Land Trust
Section 201.02, F.S.
Rule 12B-4.013(32), F.A.C.
XXX (hereinafter Trustee/Beneficiary)
XXX (hereinafter Land Trust)
Dear :
Your letter requesting a Technical Assistance Advisement has been referred to this office for response. The
specific scenario for which advice has been requested is summarized below.
Facts as Presented by Petitioner
On November 15, 2000, the Land Trust obtained title to a piece of property located in Florida. The initial trustee
resigned, and the trust was assigned to a new trustee, who was also the sole primary beneficiary of the Land Trust.
The Trustee/Beneficiary resided on the Land Trust property in a manner consistent with it being his primary residence.
The Trustee/Beneficiary has been informed by the property appraiser's office that because the realty is titled in the
name of the Land Trust, he is not entitled to claim homestead exemption. Therefore, the Trustee/Beneficiary wants to
convey the property from the Land Trust to the Living Trust, so that he can properly qualify for the homestead
exemption. There are no mortgages, other liens, or encumbrances on the real property.
Request for Advisement
You request an advisement that no documentary stamp taxes will be due on the proposed transfer of the real
property to the Living Trust.
Provisions of Law and Discussion

Section 201.02(1), F.S., imposes documentary stamp tax on deeds that convey real property or interest therein to
a purchaser or any other person by his direction.
Regarding trusts pursuant to Chapter 689, F.S., Rule 12B-4.013(32), F.A.C., provides:
A deed to or from a trustee conveying real property is taxable to the extent that the deed transfers the beneficial
ownership of the real property and to the extent that there is consideration for the transfer....
Rule 12B-4.013(32)(a), F.A.C., No change in Beneficial Ownership, states:
A deed from X to a trustee is exempt from the stamp tax to the extent of X's beneficial ownership interest as a trust
beneficiary, whether or not the real property is encumbered by a mortgage. For example, if X owns encumbered or
unencumbered real property and conveys it to the trustee of a trust of which X is the sole beneficiary, the conveyance
is exempt from the stamp tax.
Position of the Department
The conveyance of the real property from the Land Trust to the Living Trust will not incur a tax liability for
documentary stamp tax.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the
Department only under the facts and circumstances described in the request for this advice as specified in s. 213.22,
F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that
subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules upon which this
advice is based may subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public records under
Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential
information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material and this
response, deleting names, addresses and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 15 days of the date of this letter.
Sincerely,
Celestine Grantham
Technical Assistance and Dispute Resolution
CG/mh
Record ID: 18347