What Florida deed, documentary stamp, and intangible taxes applied when divorcing spouses divided real property and one gave the other a secured note?

Plain-English summary

Florida imposed deed tax on half the value of the conveyed real property and imposed documentary stamp and nonrecurring intangible tax on the secured equalization note.

The divorce judgment divided four real properties and other marital assets. The wife received three properties and had to give the husband a note to equalize the overall distribution. That note was secured by a mortgage on one of the properties.

The Department explained that an unencumbered interspousal deed is generally not taxable, except when one spouse pays consideration for interests worth more than that spouse's undivided share. Because each spouse was entitled to 50% and the wife received the husband's additional interests, deed tax was computed on 50% of the Florida real property's value. Documentary stamp tax and nonrecurring intangible tax were also due on the full amount of the secured note.

What this means for you

• A divorce judgment did not automatically make every deed tax free.
• Consideration for property beyond a spouse's existing undivided share was taxable.
• Documentary stamp tax was payable on the mortgage when recorded, with a notation on the note.
• The nonrecurring intangible tax was due at recordation or within 30 days after creation of the obligation.

Common questions

Q: What value was subject to deed tax?
A: Fifty percent of the conveyed Florida real property's value on the ruling's facts.

Q: Was documentary stamp tax due on the wife's secured note?
A: Yes, on the note amount, paid on the mortgage at recordation.

Q: Was nonrecurring intangible tax also due?
A: Yes, on the secured obligation.

Citations and references

• Fla. Stat. § 201.02 — documentary stamp tax on realty conveyances
• Fla. Stat. § 201.08(1) — recorded mortgages and obligations
• Fla. Stat. § 199.133(1) — nonrecurring intangible tax
• Fla. Admin. Code r. 12B-4.012(2)(a), (b) — consideration
• Fla. Admin. Code r. 12B-4.014(2)(d) — interspousal deeds
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96M-001

Original ruling text

May 13, 1996

Re: Technical Assistance Advisement No. 96(M)-001
Documentary Stamp Tax on Deed/Documentary Stamp Tax and
Intangible Tax on Note and Mortgage; Final Judgment of
Dissolution of Marriage
XXX (Wife)
XXX (Husband)
XXX (Property 1)
XXX (Property 2)
XXX (Property 3)
XXX (Property 4)

Dear :

You have petitioned for a technical assistance advisement
pursuant to s. 213.22, F.S., and Rule 12-11.003, F.A.C.

Issue

The issue deals with the documentary stamp tax on
conveyances of real property resulting from a divorce settlement
and execution of a new note by the Wife and the mortgage
encumbering the Property 1 which was given to secure the payment
of the note.

Background

Under the final judgment, the trial judge determined that
the value of the Husband and Wife's marital assets totaled $XX
and the enforceable marital debts of the parties totaled $XX.
The Husband is awarded 50 percent of the real Property 4 and
other personal properties. The Wife is awarded the real
Properties 1, 2 and 3 and other personal properties. To
equalize the distributions of both the real and personal
properties between the two parties, the court required that the
Wife execute a note in the amount of $XX, made payable to the
Husband, which note was to be secured by a mortgage on the
Property 1.

Requested Advisement

1. The documentary stamp tax to be paid on the deed
   executed by Husband by which he transferred his onehalf interest in the Property 1 to the Wife.

At the time of the entry of the final judgment, the
Property 1 was not encumbered by a mortgage. When the
Property 1 deed is recorded by the Wife, the Property
1 will still not be encumbered by a mortgage. However,
the same day the Wife records the Property 1 deed, the
Husband will record the Property 1 mortgage.

2. The amount of documentary stamp and intangible tax due
   with respect to the note executed by the Wife for the
   sum of $XX and the mortgage encumbering the Property 1
   which was given to secure the payment of the note.

Discussion and Law

As stated in Rule 12B-4.012 (2)(a),(b), F.A.C.,
"consideration" under s. 201.02, F.S., includes, but shall not
be limited to, money paid or to be paid, the amount of any
indebtedness discharged by a transfer of any interest in real
property, mortgage indebtedness and other encumbrances which the
real property interest being transferred is subject to,
notwithstanding the transferee may be liable for such
indebtedness. Where property other than money is exchanged for
interests in real property, there is the presumption that the
consideration is equal to the fair market value of the real
property interest being transferred.

"Property other than money" includes, but shall not be
limited to, property that is corporeal or incorporeal, tangible
or intangible, visible or invisible, real or personal;
everything that has an exchangeable value or which goes to make
up wealth or estate.

Deeds transferring unencumbered property between spouses
are not taxable, except that any consideration paid by one
spouse to the other spouse for additional shares greater in

value than their undivided interest is taxable. See Rule 12B4.014 (2)(d), F.A.C.

Section 201.08(1), F.S., imposes documentary stamp tax on
mortgages, trust deeds, security agreements, or other evidences
of indebtedness filed or recorded in this state, and for each
renewal of the same, the tax shall be 35 cents on each $100 or
fraction thereof of the indebtedness or obligation evidenced
thereby. When there is both a mortgage, trust deed, or security
agreement and a note, certificate of indebtedness, or
obligation, the tax shall be paid on the mortgage, trust deed,
or security agreement at the time of recordation.

Section 199.133(1), F.S., levies a one time nonrecurring
tax of 2 mills on each dollar of the just valuation of all
notes, bonds, and other obligations for payment of money which
are secured by mortgage, deed of trust, or other lien upon real
property situated in this state.

Department's Position

Since the Husband and the Wife are equally entitled to 50
percent of the real Properties conveyed, and the final judgment
is awarding the Wife the interest in these three real
properties, 50 percent of the value of the Florida real property
would be subject to tax. The deed tax would be computed on 50
percent of $XX or $XX.

Documentary stamp tax and intangible tax would be due on
the sum of $XX. The documentary stamp tax is required to be
paid on the mortgage at the time of recordation and a notation
is required to be made on the note that the tax has been paid
and the proper stamps affixed to the mortgage. The intangible
tax is due when the instrument is presented for recordation or
within 30 days following the creation of the obligation.

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
Tax Policy and Dispute Resolution
Office of General Counsel

BES/mh