Was deed tax due when an estate transferred unencumbered property to an LLC owned equally by the will's seven beneficiaries?

Plain-English summary

A will left the estate's residue, including unencumbered real property in two Florida counties, in equal shares to the decedent's seven children. Instead of deeding undivided interests directly to the children, the personal representative proposed conveying the property to an LLC whose only members would be those seven children, each with an equal interest.

Florida found no documentary stamp tax due. The conveyance carried out the will and did not change any beneficiary's beneficial interest or percentage share.

The cited personal-representative rule treated deeds made in accordance with a will as nontaxable. It would tax a deed to the extent a devisee received a greater share than the will allowed in exchange for consideration, but that did not occur here.

What this means for you

Using an LLC as the recipient did not itself trigger deed tax because the ownership proportions exactly matched the will and the property was unencumbered. Different percentages, extra consideration, or debt were not decided.

Common questions

How many beneficiaries were involved? Seven children, each entitled to an equal share under the will.

Who owned the LLC? The same seven beneficiaries, in equal shares.

Was the property mortgaged? No. The ruling expressly described it as unencumbered.

Why was the deed nontaxable? It implemented the will without changing the beneficiaries' proportional interests.

Citations and references

• Fla. Stat. § 201.02(1) (consideration for documentary stamp tax)
• Fla. Admin. Code r. 12B-4.014(4) (personal representative's deeds under a will)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06B4-009

Original ruling text

SUMMARY
QUESTION: Will a conveyance of unencumbered real property from an estate to an LLC having the same
beneficiaries receiving the same percentage of interest as specified in the will be subject to documentary stamp tax on
the deed?
ANSWER - Based on Facts Below : The provisions of the will specified that seven beneficiaries were to receive
equal shares of the rest, residue and remainder of the estate. The personal representative of the will conveyed the
unencumbered real property to an LLC of which the only members were the same beneficiaries specified in the will.
The members of the LLC obtained equal shares (as specified in the will) in the real property conveyed to the LLC.
Therefore, the provisions of the will were carried out. Under the rule above, there is no documentary stamp tax due on
the conveyance.

October 31, 2006

Re: Technical Assistance Advisement No. 06B4-009
Documentary Stamp Tax on Real Property Conveyed to an LLC
Section 201.02(1), F.S.
Rule 12B-4.014(4), F.A.C.
XXX (Decedent)
Dear:
This is in response to your request for a technical assistance advisement asking for an opinion on whether a
conveyance of unencumbered property to an LLC of which the only members are the seven children named as
beneficiaries in the will of the decedent would be subject to documentary stamp tax.
FACTS AS PRESENTED BY PETITIONER
The will of the decedent specified that the decedent's seven children were to receive in equal shares the rest,
residue and remainder of the estate, which included unencumbered real property in Manatee County and Citrus
County.
Instead of conveying the unencumbered real property directly to the seven children of the decedent, if the personal
representative conveys the real property to an LLC of which the only members are these seven children who are the
beneficiaries as specified in the will, is the deed subject to the tax?
REQUESTED RULING
You request the Department's determination that a personal representative’s deed conveying the real estate from

the estate to the LLC of which the only members are the decedent's seven children would not be subject to
documentary stamp tax.
LAW AND DISCUSSION
Under s. 201.02, F.S.:
... For purposes of this section, consideration includes, but is not limited to, the money paid or agreed to be paid; the
discharge of an obligation; and the amount of any mortgage, purchase money mortgage lien, or other encumbrance,
whether or not the underlying indebtedness is assumed. If the consideration paid or given in exchange for real
property or any interest therein includes property other than money, it is presumed that the consideration is equal to
the fair market value of the real property or interest therein.
Pursuant to Rule 12B-4.014(4), F.A.C.:
(4) Personal Representative's Deed: A deed given by a personal representative in accordance with the terms of a will
is not taxable, including any term of the will that authorizes the personal representative to allocate and convey
different parcels to different devisees instead of conveying undivided interests in each parcel. However, if a devisee
takes a greater share in the realty than that to which the devisee is entitled under the will, the deed given by the
personal representative to convey such greater share is subject to a tax computed upon the amount of any
consideration given.
The personal representative will convey the unencumbered real property directly to an LLC of which the seven
beneficiaries of the will are the only members of the LLC. The beneficial interest of each of the beneficiaries under the
terms of the will did not change.
DETERMINATION
Therefore, the conveyance of the unencumbered property to the LLC (where each of the beneficiaries is an equal
member) is not subject to documentary stamp tax under s. 201.02, F.S.
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,
M.E. Clemens, C.P.A.
Senior Tax Specialist
Technical Assistance and Dispute Resolution
MEC/mh
Record ID: 23978