REAL ESTATE EXCISE TAX‑-TENANTS IN COMMON
An order by the court directing a sale of property owned by tenants in common and the sale thereafter is a taxable sale for real estate excise tax purposes.
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January 28, 1957
Honorable Willard A. Zellmer
Davenport, Washington Cite as: AGO 57-59 No. 8
In your letter of January 2, 1957, you inquired whether the one per cent real estate excise tax would apply to the following situation:
Certain real estate was owned by tenants in common and an action was brought by one of them against the others for partition.
The court held that the property could not be physically partitioned, directed that it be sold, and appointed a referee for that purpose; the property was duly advertised and sold by the referee to one of the defendants in the partition action.
It is our conclusion that the transfer ordered by the court in the above situation constitutes a "sale" as defined by RCW 28.45.010.
To determine whether a particular transaction comes within the provision of the real estate excise tax as set forth in chapter 28.45 RCW, reference must be made to the definition of a "sale" as defined in RCW 28.45.010. The above statute defines "sale" in part to:
"* * * include any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or title to real property, including standing timber, or any estate or interest therein for a valuable consideration, * * *"
On the basis of the excerpt above it would appear that a sale pursuant to an order of the court resulting from a request for the partitioning of real estate would come within the above definition and thus be subject to the one percent tax.
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The question then is whether the above facts come within the exclusionary provisions of the term "sale" wherein, in RCW 28.45.010, it is further provided in part as follows:
"The term shall not include * * * the partition of property by tenants in common by agreement or as the result of a court decree * * *"
The above quoted language clearly excludes from the definition of a "sale" a conveyance between tenants in common for a partition of real property pursuant to an agreement or as the result of an order of the court. However, in the situation with which we are here concerned, the court did not order a partition of the property, but rather directed that the property be sold. There was merely a division between the tenants in common of the proceeds of the sale, rather than a partition of the real property between the tenants in common. The fact that one of the tenants in common was the purchaser would not alter the result.
Consequently there was no partition of the real property. In our view the language of RCW 28.45.010,supra, excluding from the term "sale" the partitioning of property by tenants in common by agreement or as the result of a court decree, does not cover the sale ordered by the court about which you inquire.
Since the facts stated above do not come within the exclusionary provisions of the definition of a "sale," we conclude that there was a taxable transfer of real property within the definition of a "sale" as provided in RCW 28.45.010, supra.
We hope the above comments will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
ROBERT L. SIMPSON
Assistant Attorney General