A recent blog post discussed the Department of Revenue’s position on documentary stamps for transfers of real property in asset protection planning. Asset protection often involves conveyance of real property you own individually to your partnerships and limited liability companies .In the past, the Department was insisting on your paying documentary stamps where the legal entity that received the property was owned by the same individuals who owned the property to begin with. Recently, according to the recent post, the Department has retreated from its position and had imposed tax on such transfers only to the extent of a mortgage balance, if any, encumbering the property.
Last week, the Florida Supreme Court issued a legal opinion which affirmed the more liberal ruling of the documentary tax statute. The Supreme Court said that, “the transfer of property between a grantor and its wholly owned grantee, absent any exchange of value, is without consideration or a purchaser and thus not subject to the documentary stamp tax in section 201.02(1).” Transfers to wholly owned entities will be taxed on the amount of mortgage liability consistent with prior rulings of the court. This decision makes asset protection planning less expensive for people who own Florida real property. Crescent Miami Center, LLC v. Florida Department of Revenue