Did the original ruling impose documentary stamp tax when spouses deeded their own encumbered interests to their separate revocable trusts?

Subject

Deed to Revocable Trust

Plain-English summary

The original ruling found no documentary stamp tax when each spouse transferred that spouse's own encumbered interest to a separate revocable trust controlled by the grantor, but the official source says this ruling was superseded on August 27, 1993.

The original analysis said no irrevocable third-party conveyance occurred because each grantor retained control and remained sole beneficiary for life. It separately required the stated $0.70 minimum tax if a deed recited "$10 and other valuable consideration."

What this means for you

This is a historical, superseded conclusion and is not the Department's final position on the transaction.

Common questions

Q: Did the original ruling tax the encumbrance? No, on its stated revocable-trust facts.

Q: Did it require any minimum tax? Yes, when the deed used the stated consideration recital.

Q: Is the original ruling controlling? No. The source marks it superseded by TAA 93(B)4-014R.

Citations and references

• Fla. Stat. § 201.02(1) — documentary stamp tax on deeds
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B4-014

Original ruling text

Status: Superseded by TAA 93(B)4-014R (Revised), August 27,
1993

Jun 10, 1993

Re: Technical Assistance Advisement No. 93(B)4-014
Documentary Stamp Tax; Deed to Revocable Trust
Section 201.02, F.S.
XXX (hereinafter Husband)
XXX (hereinafter Wife)

Dear :

This is in answer to your request for a Technical
Assistance Advisement on substantially the following question:

Is a transfer of an 80% interest in encumbered property
held by Husband and Wife as tenants in common: one-half
conveyed to a revocable trust for Husband and one-half
conveyed to a separate revocable trust for Wife subject to
documentary stamp tax?

BACKGROUND

Husband and Wife hold title to encumbered property as
tenants in common. Each is transferring his/her 40% interest in
the property to his/her own separate revocable trust.

DISCUSSION AND LAW

Under s. 201.02(1), F.S., consideration includes mortgages.
Where property is conveyed in exchange for other property, the
basis for documentary stamp tax is usually the fair market value
of the property. However, where each grantor transfers his/her
own separate interest in property to his/her own separate
revocable trust, the conveyance can be reversed by the grantor
of the trust at any time prior to the date of death. Therefore,
no real conveyance to a third party which is irrevocable has
taken place. The grantor has not relinquished ownership of the

property. It is merely held under the umbrella of a trust which
the grantor still controls through the trustee. Therefore,
since there has been no real conveyance of the property, no
documentary stamp tax is due, even if the property is
encumbered.

DEPARTMENT'S POSITION

A conveyance of one's own portion of encumbered property to
one's own revocable trust is not subject to documentary stamp
tax under s. 201.02, F.S., even where the property is encumbered
provided the grantor of the trust is the sole beneficiary of the
trust for his lifetime.

However, if the deed reads $10 and other valuable
consideration, the minimum documentary stamp tax of $.70 is
required on that deed.

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 and your request
are public records under Chapter 119, F.S., which are subject to
disclosure to the public under the conditions of s. 213.22, F.S.
Your name, address, and any other details which might lead to
identification of the taxpayer must be deleted by the Department
before disclosure. In an effort to protect the confidentiality
of such information, we request you notify the undersigned in
writing within 15 days of any deletions you wish made to the
request or the response.

Sincerely,

M.E. Clemens
Technical Assistant
Technical Assistance

MEC/mh