What documentary stamp tax applied to the trustee and title-clearing hotel-property deeds?

Subject

Deeds to Beneficiary or to Successor Trustee

Plain-English summary

Only the minimum Florida documentary stamp tax applied to both proposed deed paths. The bank trustee could deed the hotel property either to a successor trustee or to the trust's sole corporate beneficiary for minimum tax.

The Tribe's quitclaim deed to either recipient, used to clear a public-record ambiguity caused by an earlier grantee-description error, also required only the minimum tax as a corrective deed.

What this means for you

The result depended on continuity of beneficial ownership and correction of the recorded title description. The ruling did not treat the deeds as ordinary sales of the hotel property to a new beneficial owner.

Common questions

Was the trustee-to-successor-trustee deed fully taxable? No. Only minimum documentary stamp tax applied.

What about a deed directly to the sole beneficiary? The same minimum-tax result applied.

Why was the Tribe's quitclaim deed treated similarly? It was described as clearing an ambiguity in the public records.

Citations and references

• Fla. Stat. §§ 201.02(1) and 213.22
• Fla. Admin. Code r. 12B-4.014(2), (3)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94B4-012

Original ruling text

Aug 31, 1994

Re: Technical Assistance Advisement No. 94(B)4-012
Documentary Stamp Tax
Deeds to Beneficiary or to Successor Trustee
XXX (Corporation)
XXX (Trust)
XXX (Tribe)
XXX (Hotel Property)

Dear :

You have petitioned for a Technical Assistance Advisement
pursuant to s. 213.22, F.S., and Florida Administrative Code
Rule 12-11.003.

Issue

Whether a deed from the Bank, as Trustee for the Trust, of
the Hotel Property to either a Successor Trustee for the Trust,
or to the Corporation as the sole beneficiary of the Trust, is
subject to tax under section 201.02, F.S. In addition, whether
a quit claim deed from the Tribe to either the Successor Trustee
or to the Corporation, as sole beneficiary of the Trust, to
clear title, is subject to tax under section 201.02, F.S.

Background

The Tribe was organized and recognized under the Indian
Reorganization Act of June 18, 1934, 48 Stat. 984, 25 U.S. Code,
as was the Tribe's wholly owned Corporation. The trust
agreement was and at all times has been between the Bank and the
Corporation as the sole beneficiary of the Trust, and the Bank
at no time had the authority to act on behalf of the Tribe.

On March 21, 1984, the Bank, as Trustee for the Trust,
acquired a mortgage lien interest in the Hotel Property. An
additional leasehold mortgage lien interest was acquired on
October 7, 1985. By an assignment (the Assignment of Mortgage)

from another bank dated September 29, 1986, the Bank as Trustee
for the Trust, acquired certain Multi-Family Mortgages,
Assignments of Rents and Security Agreements dated July 29,
1983, and April 30, 1984, respectively. The four mortgages
described are herein collectively referred to as `the
Mortgages'.

Notwithstanding the fact that the Bank acquired the
Mortgages as Trustee for the Trust, the instruments by which the
Bank acquired the interests identified the Bank as Trustee for
the Tribe, due to a clerical error. The Bank as Trustee for the
Trust acquired Final Judgements of Foreclosure with respect to
the Mortgages. The Bank as Trustee for the Trust received a
Certificate of Title on April 13, 1988. The Certificate of
Title also reflected that the Bank was Trustee for the Tribe
instead of the Trust.

At the time the foreclosure was taking place, negotiations
were being held with a realty corporation as the fee owner of
the Hotel Property. A warranty deed was recorded on April 14,
1988, transferring the Hotel Property to the Bank as Trustee for
the Trust. The inconsistency between the description of the
grantee in the Certificate of Title and the warranty deed has
led to confusion in the public records.

The Corporation now desires to have the Bank, as Trustee
for the Trust, transfer the Hotel Property either to a Successor
Trustee for the Trust or to the Corporation as sole beneficiary
of the Trust. Further, a quit claim deed will be given by the
Tribe to the Successor Trustee or to the Corporation, as sole
beneficiary of the Trust, for the purpose of eliminating any
ambiguity in the public records.

Your position is that both an instrument of conveyance from
the Bank as Trustee to the Successor Trustee or to the
Corporation as the sole beneficiary and the quit claim deed from
the Tribe to The Successor Trustee or to the Corporation will
require only the minimum documentary stamp tax.

Discussion and Law

The tax levied by s. 201.02(1), F.S., is an excise tax on
deeds, instruments, or writings transferring any interest in
real property. The tax shall be 70 cents per each $100 of
consideration. For purposes of this section, consideration
includes money paid or to be paid, the discharge of any
obligation, and the amount of any mortgage, purchase money
mortgage, or other encumbrance. If the consideration is other
than money, the consideration shall be presumed to be the fair
market value of the real property being transferred.

Rule 12B-4.014(2), F.A.C., provides that a conveyance of
unencumbered property as a gift is not taxable and that a
conveyance to or by a trustee not pursuant to a sale is not
taxable. In addition, Rule 12B-4.014(3), F.A.C., provides that
a deed to correct a deficiency in a previous deed on which the
tax has been paid requires only the minimum tax.

Department's Position

Therefore, a deed from the Bank as Trustee to the Successor
Trustee or to the Corporation as sole beneficiary will require
only the minimum documentary stamp tax pursuant to rule 12B4.014(2), F.A.C. In addition, the quit claim deed from the
Tribe to the Successor Trustee or to the Corporation as sole
beneficiary to clear title will require only the minimum
documentary stamp tax pursuant to Rule 12B-4.014(3), F.A.C.

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,

James E. Silvey
Tax Law Specialist
Technical Assistance

JES/jes