Was documentary stamp tax due when a sole beneficiary moved Florida real property from a trust into that same person's IRA?

Subject

Transfer from Trust to Individual Retirement Accounts

Plain-English summary

No Florida documentary stamp tax was due on the described deed. A trust held encumbered Florida real property, and its trustee was the trust's sole beneficiary. The same person was also the sole beneficiary of an IRA held by an out-of-state custodian.

The proposed transaction would retitle the property from the trust to the IRA custodian. Because the same individual held the beneficial interest before and after the transfer, the Department concluded that the deed did not transfer beneficial ownership.

What this means for you

The ruling focused on beneficial ownership, not merely the name appearing in the title records. Its result depended on the same person being the sole beneficiary of both arrangements; a transfer involving different or additional beneficial owners would present different facts.

Common questions

Q: Did changing the titled owner to the IRA custodian trigger tax? No, not under these facts.

Q: Why was there no taxable transfer? The Department found no change in beneficial ownership because the same person was the sole beneficiary of both the trust and the IRA.

Q: Did the property have a mortgage or other encumbrance? The ruling described the property as encumbered but still concluded that no documentary stamp tax was due on this transaction.

Citations and references

• Fla. Stat. § 201.02 — documentary stamp tax provision identified in the ruling
• Fla. Admin. Code r. 12B-4.013(33) — trustee deeds are taxable to the extent they transfer beneficial ownership and involve consideration
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97B4-007

Original ruling text

Jun 03, 1997

Re: Technical Assistance Advisement No. 97(B)4-007
Documentary Stamp Tax; Transfer from Trust to Individual
Retirement Accounts
Section 201.02, F.S., Rule 12B-4.013(33), F.A.C.
XXX (hereinafter Trustee/Beneficiary
XXX (hereinafter Trust)
XXX (hereinafter IRA)
XXX (hereinafter Custodian)

Dear :

This is in response to your letter dated February 19, 1997,
requesting a Technical Assistance Advisement regarding the
application of documentary stamp tax under the facts and
documents set forth herein.

Statement of the Facts

The following is the description of the transaction
outlined in your letter:

The Trust holds title to encumbered real property located
in Florida. The Trustee of the Trust also has an IRA which
was set up pursuant to Section 408(a), U.S. Internal
Revenue Code. The IRA is held with an out of state
Custodian. The Trustee is the sole beneficiary of both the
Trust and the IRA.

The Trustee desires to transfer the property now in the
Trust to the IRA account. The properties currently titled
in the name of the Trustee will be titled in the name of
the Custodian of the IRA.

You request the Department's advice regarding the
applicability of documentary stamp tax in the described
transaction.

Provision of the Law

Rule 12B-4.013(33), F.A.C., provides

A deed to or from a trustee conveying real property is
taxable to the extent that the deed transfers the
beneficial ownership of the real property and to the extent
there is consideration for the transfer.

Conclusion

In that the Trustee/Beneficiary is the same for both the
Trust and the IRA, the conveyance of property from the Trust to
the IRA would not constitute a transfer of beneficial ownership
of the real property. Accordingly, no documentary stamp tax
would be due in this transaction.

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,

Celestine Grantham

Senior Tax Specialist
Technical Assistance and Dispute Resolution
Office of General Counsel

CG/mh