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What are the legal ramifications of not paying transfer tax on a sale of real property?

Oakland, CA |

I sold the real property to a trust and signed a grant deed. $0 transfer tax was mistakenly written on the deed, thus appearing that I put my interest into the trust. However, the real property was actually sold to the trust, and the grant deed does specifically state that it was sold for valuable consideration in writing. Since transfer tax was not paid for this Grant Deed, what are the legal ramifications? Should the Grant Deed be fixed and re-recorded with the correct transfer tax?

Attorney Answers 2


If you transferred your property to a Trust that you are the sole beneficiary of, or you and your children and spouse are the sole beneficiaries, then you may be exempt from a transfer tax. You need to contact a tax attorney and inform them of your particular facts so he or she can give you specific advise.

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Usually there has to be a more than 50% in ownership before there is a "transfer" that would trigger the tax, but I agree with my colleague that you may need advice of a professional to see if you may have to pay the tax.

As a practical matter, if you didn't try to hide anything it may be up to the taxing authority to come to you and demand the taxes. But if you truly sold it to an entity that you are not at least a 50% owner, you may owe the tax.

This is general legal advice intended for informational purposes only and does not create and attorney/client relationship. If you wish further advice, please contact an attorney of your own choosing or you may contact me for further advice and make other arrangements including retaining my services.

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