How much documentary stamp tax applied when a $100 foreclosure bid was split among three certificates of title for three parcels?

Plain-English summary

Three co-lenders foreclosed one mortgage covering three parcels and made a single successful bid of $100. They proposed a court-approved bifurcation so the clerk would issue one certificate of title for each parcel to the corresponding co-lender.

Florida ruled that documentary stamp tax was $0.70 on each certificate, or $2.10 total. Foreclosure certificates are taxed on the highest and best bid, and each parcel's allocated share of the $100 bid was less than $100.

Provided no other consideration was given, splitting the bid to reflect the co-lenders' parcel interests was not a separate taxable assignment of the successful bid.

What this means for you

At a judicial foreclosure sale, the bid amount—not the property's fair market value—supplied the stated tax base. Multiple certificates can each incur the minimum tax even when they arise from one small bid.

Common questions

How much tax was due per certificate? $0.70.

What was the total for all three? $2.10.

Was the bifurcation a taxable bid assignment? No, with no other consideration and under the represented court-approved allocation.

Citations and references

• Fla. Stat. § 201.02(1) and (9) and Fla. Admin. Code r. 12B-4.013(25), as listed or discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 11B4-001

Original ruling text

Executive Director
Lisa Vickers

TAX: Documentary Stamp Tax
TAA NUMBER: 11B4-001
ISSUE: Documentary Stamp Tax – Certificate of Title
STATUTE CITE(S): Sections 201.02(1) and 201.02(9), F.S.
QUESTION: How much documentary stamp tax is due on three certificates of title issued pursuant to a single
successful bid for property received at a foreclosure sale? A certificate of title is to be issued to each of three
entities successfully foreclosing on a single mortgage. The three entities were the mortgagees under the foreclosed
mortgage. There was a successful bid of $100 offered by the three entities for the foreclosed property. The three
certificates will be issued as a bifurcation of what would otherwise have been a single certificate of title.
ANSWER: Documentary stamp tax is imposed under s. 201.02(1), F.S., on documents that transfer an interest in
Florida real property. The tax is based on the consideration for the property transferred at the rate of $.70 (in all
counties except Miami-Dade) per $100 of consideration or portion thereof. Section 201.02(9), F.S., provides that
the taxable consideration for property transferred by a certificate of title issued by the clerk of court under s.
45.031(5), F.S., in a judicial sale of real property under an order or final judgment issued pursuant to a foreclosure
proceeding is taxable based on the amount of the highest and best bid received for the property. Documentary
stamp tax would be due on each of the three certificates of title based on the portion of the successful bid
attributable to each of the properties. Since the successful bid was $100 for all properties, the consideration for a
single parcel of property under each certificate would be an amount less than $100. As such, documentary stamp
tax of $.70 would be due on each certificate of title.

January 10, 2011
XXX
XXX
XXX
Re:

Technical Assistance Advisement No. 11B4-001
Documentary Stamp Tax
XXX; XXX, XXX (“Taxpayers”)
Section 201.02(9), F.S.

Dear XXX:
This is in response to your letter dated XXX, requesting a determination regarding the imposition of
documentary stamp tax upon the issuance of separate Certificates of Title pursuant to a Final Judgment of
Foreclosure. This response constitutes a Technical Assistance Advisement under Chapter 12-11, Florida
Administrative Code (F.A.C.), and is issued to you under the authority of Section 213.22, Florida Statutes
(F.S.).
FACTS PROVIDED BY TAXPAYER
On XXX, (“Purchaser”), purchased three parcels of real property from the Taxpayers, who each owned
one of the three parcels, respectively. In conjunction with the transaction, the Purchaser executed and
delivered a single Note in the amount of $XXX to the Taxpayers, also the Co-Lenders, which was secured
by a single Mortgage and Security Agreement (“Mortgage”) on the three parcels, recorded with the Clerk
of the Court in XXX in OR BK XXX, PG XXX. The legal description set forth in the Mortgage expressly
indentified the three separate parcels of real property conveyed to the Purchaser by the Taxpayers.
On XXX, an action to foreclose the Mortgage was initiated by the Taxpayers, as Plaintiffs, against the
Purchasers, as Defendants, Circuit Court Case No. XXX. On XXX, the Circuit Court entered a Final
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Tallahassee, Florida 32399-0100

Technical Assistance Advisement 11B4-001
Page 2
Judgment of Foreclosure in favor of the Plaintiffs. The judicial sale of the real property was held on XXX,
and the highest and best bid was submitted by the Plaintiffs for the nominal amount of $XXX. It is the
desire of the Plaintiffs, as Co-Lenders and successful bidders, to bifurcate their bid and obtain the issuance
of three separate Certificates of Title for each individual parcel in the name of the party which had
previously owned such parcel. Upon the Plaintiffs’ filing of a Motion to Delay Issuance of Certificate of
Title before the Circuit Court, it was ordered that the County Clerk’s office delay the issuance of the
Certificate of Title to allow the Plaintiffs sufficient time to ensure and confirm the documentary stamp tax
ramifications of such action. The Plaintiffs anticipate filing a Bifurcation of Bid request with the Circuit
Court to obtain an order authorizing the County Clerk’s office to issue three separate Certificates of Title
to allocate the parcels foreclosed in accordance with the interest held by each Taxpayer, as Co-Lender
under the Mortgage, and to properly retitle the parcels in the name of each Co-Lender in order to reestablish their prior land ownership.
REQUESTED ADVISEMENT
Your letter requests confirmation that the issuance of three separate Certificates of Title and bifurcation of
the bid amount of $XXX will result in documentary stamp tax due in the amount of $XXX, pursuant to s.
201.02(9), F.S. Additionally, confirmation is requested that the bifurcation of the Plaintiffs’ successful bid
will not result in additional documentary stamp tax due as an assignment of bid pursuant to Rule 12B4.013(25), F.A.C.
LAW AND DISCUSSION
Under s. 201.02(9), F.S., a Certificate of Title issued by the Clerk of the Court upon a judicial sale of real
property under an order of Final Judgment is subject to documentary stamp tax based solely on the amount
of the highest and best bid for the property received at the foreclosure sale. An assignment of successful
bid at a foreclosure sale is taxable based on the consideration paid for the assignment. (See Rule 12B4.013(25), F.A.C.)
RESPONSE
The Certificate of Title constitutes the document whereby title is conveyed to the successful bidder at the
foreclosure sale. In this instance, the three proposed Certificates of Title enclosed with your request will
result from the bifurcation, once approved by the Circuit Court, of the $XXX bid amount to accurately
reflect the interest held by each Co-Lender under the Mortgage and to properly retitle the three parcels
into the name of the individual Taxpayer which held fee simple ownership in each of the parcels prior to
the original sale to the Purchaser. Therefore, the resultant bifurcation of the $XXX bid in order to issue
three Certificates of Title for the purpose of conveying the three parcels will result in $.70 tax due on each
Certificate of Title. Provided no other consideration is given for the parcels, the bifurcation of the
Plaintiffs’ successful bid will not constitute an assignment of bid. Accordingly, the total documentary
stamp tax due on the issuance of the Certificates of Title, if bifurcated, will be $.70 each, for a total of
$2.10
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.

Technical Assistance Advisement 11B4-001
Page 3
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,

Joy B. Eldred, C.P.A.
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 717-6488
JBE/tlg
Record ID: 93025