Was a nonresident decedent's Florida fee time-share interest treated as real or personal property for Florida estate tax?

Subject

Interest in a Time-Share

Plain-English summary

Florida treated the nonresident decedent's fee time-share interest as real property located in Florida. The Department therefore said the interest belonged in the Florida estate-tax calculation described for a nonresident estate.

The ruling explained that Florida law defined a fee time-share as land, buildings, and improvements subject to time-share interests sold as fee interests in real property. For the calculation in the advisement, the Florida property's gross value was reduced by any related nonrecourse mortgage and compared with the gross value of the entire federally taxable estate; that ratio was then applied to the federal credit for state death taxes.

What this means for you

A deeded or fee time-share owned by a nonresident was not treated as ordinary personal property merely because ownership was divided into time periods. The legal form of the interest and its Florida situs controlled the classification in this ruling.

Common questions

Was the time-share treated as Florida real property? Yes.

Did a mortgage affect the value used in the calculation? A related nonrecourse mortgage reduced the Florida property's value, but not below zero, under the method stated in the ruling.

Did the ruling apply to every type of time-share interest? No. The analysis relied on the statutory definitions for a fee interest in time-share real property and on the specific estate facts presented.

Citations and references

• Fla. Stat. §§ 718.120(3), 192.037(2), and 192.001(14)-(15)
• Fla. Admin. Code r. 12C-3.004
• Fla. Stat. § 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94C3-002

Original ruling text

Nov 18, 1994

Re: Technical Assistance Advisement No. 94(C)3-002
Estate Tax; Interest in a Time-Share
XXX (Taxpayer)

Dear :

Your recent request for a technical assistance advisement
has been received in this office.

Facts

The Taxpayer, who was a resident of a state other than
Florida, owned an interest in a Time-share located in Florida.

Requested Advisement

A determination whether the State of Florida would classify
and tax the Time-share interest as real property or personal
property to properly record it on the out-of-state estate tax
return.

Discussion and Law

Section 718.120 (3), F.S., provides that condominium
property divided into fee time-share real property shall be
assessed for purposes of ad valorem taxes as provided in s.
192.037, F.S.

Fee time-share property is listed on the assessment rolls
as a single entry for each time-share development. The assessed
values of each time-share development shall be the value of the
combined individual time-share periods or time-share estates
contained therein pursuant to s. 192.037 (2), F.S.

Section 192.001 (14) and (15), F.S., provides in part:

"(14) `Fee time-share real property' means the land and

buildings and other improvements to land that are subject
to time-share interests which are sold as a fee interest in
real property.
(15) `Time-share period titleholder' means the purchaser of
a time-share sold as a fee interest in real property..."

Rule 12C-3.004, F.A.C., provides that if the decedent was
not a resident of Florida (but was a citizen or resident of the
United States) and the estate owns property with a situs in
Florida and a credit for state death taxes is taken on the
federal return, estate tax will be due the State of Florida if
the Florida property, as reduced by any related nonrecourse
mortgage, has any value remaining after such reduction (but not
below zero).

To determine the amount of Florida estate tax due, divide
the gross value (net of nonrecourse mortgages) of the Florida
property by the gross value (net of nonrecourse mortgages) of
the entire estate taxable by the United States (including
property located outside the United States) and multiply this
number by the credit for state death taxes.

If the decedent's estate is not liable for the amount of
debt or mortgage on any of its Florida property (as in the case
of a nonrecourse mortgage), the value of such property must be
reduced (but not below zero) by any nonrecourse mortgages on the
property or other debt for which the estate is not liable to
determine the value of such property to be included in the
taxing formula for nonresident estate.

Conclusion

Based upon the statutory provisions and the information
provided in your request, the interest in the time-share would
be taxed as real property in this state.

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,

Nadine C. Posey
Tax Audit Specialist III
Technical Assistance

NCP/mh