Also known as: transfer tax
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A tax imposed on the conveyance of real property. Closing documents for a real estate transfer routinely include transfer tax forms along with the deed and closing statement to ensure proper recording and compliance with applicable recording requirements.
A tax imposed on the conveyance of real property. Closing documents for a real estate transfer routinely include transfer tax forms along with the deed and closing statement to ensure proper recording and compliance with applicable recording requirements.
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Federal excise taxes levied on gratuitous transfers of wealth. The three taxes collectively known as transfer taxes are the estate tax on transfers at death, the gift tax on lifetime transfers, and the generation-skipping transfer tax on transfers that skip a generation.
Select any source to read its text and confirm it supports the definition.
Federal excise taxes levied on gratuitous transfers of wealth. The three taxes collectively known as transfer taxes are the estate tax on transfers at death, the gift tax on lifetime transfers, and the generation-skipping transfer tax on transfers that skip a generation.
Each sense below has its own examples, sources, and questions.
Thaddeus Tran sells his commercial building to True North Logistics. At closing the title agent prepares the deed, closing statement, title commitment, and transfer tax forms. The parties execute all documents and the deed is recorded immediately after closing.
Closing documents for a real estate transfer include the deed, closing statement, title insurance commitment or opinion, and often payoff statements, affidavits, and transfer tax forms. Lawyers and title agents oversee preparation to ensure the deed and other instruments correctly reflect the agreement and that liens and encumbrances are addressed.
Supporting sources
Thomas Thompson's will directs that all succession and transfer taxes be paid from the residuary estate left to his brother's descendants. The executors pay state inheritance taxes and then seek a refund of the federal estate tax paid on the same amounts under the 1916 federal statute.
Tonya Takahashi disclaims an inheritance more than nine months after the decedent's death. The United States asserts a federal tax lien against the disclaimed property. The court holds the disclaimer ineffective for federal transfer tax purposes because it was untimely under I.R.C. § 2518.
The federal estate tax on transfers at death, the gift tax on lifetime transfers, and the generation-skipping transfer tax together constitute the federal transfer taxes. Each taxes gratuitous transfers of wealth and backstops the others to prevent avoidance.
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A donative document may be modified in a manner that does not violate the donor's probable intention when the modification is needed to achieve the donor's tax objectives. Courts apply this rule to both state and federal transfer taxes provided the change preserves the donor's overall dispositive scheme.
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For federal transfer tax purposes a surviving joint tenant who seeks to disclaim the portion obtained by right of survivorship must disclaim within nine months of the other joint tenant's death. An untimely disclaimer does not qualify as a valid tax-effective disclaimer under I.R.C. § 2518.
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…the Code, which renders qualifying state-law disclaimers “with respect to any interest in property” effective for federal wealth-transfer tax purposes and for those purposes only.[^maj-3] Drye nevertheless refers to cases indicating that state law is the proper guide to the critical determination whether his interest in his…