How much Florida documentary stamp tax was due on a corrective deed replacing the wrong grantee on a previously taxed deed in lieu of foreclosure?

Plain-English summary

Only minimum documentary stamp tax was due on the corrective deed.

The original deed in lieu of foreclosure had already been recorded and taxed, but it mistakenly named a company as grantee instead of the trust company that owned the mortgage and note. The later deed from the incorrectly named company to the trust company corrected that defect.

Rule 12B-4.014(3), as cited in the ruling, required only minimum tax for a conveyance correcting a deficiency in a previous deed on which tax had been paid.

What this means for you

The result depended on the later deed truly correcting the prior taxed instrument rather than documenting a new substantive transfer.

Common questions

Q: Why was the corrective deed needed?
A: The deed in lieu of foreclosure named the wrong corporate grantee.

Q: Had tax been paid on the first deed?
A: Yes.

Q: What tax applied to the correction?
A: Only the minimum documentary stamp tax under the cited rule.

Citations and references

• Fla. Admin. Code r. 12B-4.014(3) — corrective deed after tax paid on original deed
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95B4-009

Original ruling text

Jun 29, 1995

Re: Technical Assistance Advisement No. 95(B)4-009
Documentary Stamp Tax; Corrective Deed
XXX (hereinafter Trust Company)
XXX (hereinafter Company)
XXX (hereinafter Taxpayers)

Dear :

This is in response to your request for a Technical
Assistance Advisement concerning the applicability of Florida
Documentary Stamp Tax as it applies to a recording of a
corporate warranty deed to correct an error.

You have also enclosed with your letter a Special Warranty
Deed for our determination.

Background

Approximately two years ago, Trust Company, the holder of a
mortgage encumbering certain real property in XXX County agreed
to accept a deed in lieu of foreclosure from the Taxpayers.

The deed from the Taxpayers erroneously named the Company
as grantee. It was placed of record and the Taxpayers were
released from further liability under the note and mortgage.

The Company was not the proper party to accept title to the
property and the deed should have named the owner and holder of
the mortgage and note, Trust Company, as the grantee on the deed
in lieu of foreclosure.

Because litigation involving insurance proceeds has been
ongoing since the date of the recording of the incorrect deed
and has now only recently been settled, the error in the naming
of the grantee in the deed in lieu of foreclosure has just come
to light and can now be corrected.

Department's Position

As stated in Rule 12B-4.014(3), F.A.C., where a conveyance
is made to correct a deficiency in a previous deed on which the
tax has been paid, only minimum tax is required.

Based on the above facts and pursuant to Rule 12B-4.014(3),
F.A.C., only minimum documentary stamp tax is due on a
corrective deed from Company to Trust Company.

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,

Baldan E. Sulker
Senior Tax Specialist
Technical Assistance

BES/mh