Real Estate Transfer Fee Common Questions

Spouse to Spouse Conveyances

  1. When does the "Between spouses" exemption under sec. 77.28(8m), Wis. Stats., apply?

Joint Tenancy

  1. In preparing a transfer tax return to accompany a deed in which the owner of a single-family residence is a single male. He has requested that we prepare a deed from him (as sole owner) to himself and his cohabitant (as joint tenants). The couple does not plan to marry. Following are my questions:
    • When figuring the transfer fee, should I figure it on ½ the value of the real estate or should I figure it on the entire value?
    • Grantor/Grantee relationship: Is it none? Or is it "Other" with the explanation of "cohabitants"?
    • Type of Transfer: Should it be "Other" and explained as "Conveyance" with no explanation?
    • Ownership interest transferred: Should it be "Full" or should it be "Other" and explained by "Grantor is conveying a ½ interest to Grantee"?
    • Does Grantor retain any of the following rights: Should it be "None" (because he is giving up his rights as an individual owner and conveying them to himself and his cohabitant as joint tenants)? Or should it be "Other" and explained with "Grantor retains a ½ interest"?
  2. In filing a quit claim deed from a surviving spouse disclaiming joint tenancy in the real estate of the decedent under sec. 854.13(2) (b), Wis. Stats., the effect is as though the surviving joint tenant had predeceased the decedent. Is a transfer return required? Also, would a return be required when the children of the decedent disclaimed any interest in the estate and they had no prior interest or title in the real estate?

Spouse to Spouse Conveyances

  1. When does the "Between spouses" exemption under sec. 77.28(8m), Wis. Stats., apply?

    Conveyances exempt from fee:

    • Conveyances between spouses while married, including a: sale, land contract, gift, etc.
    • Conveyances due to divorce where one party is to receive the property

    Note: A transfer return is required when the only document recorded is the divorce judgment. If the judgment is splitting various properties between each ex-spouse, it is considered two conveyances and requires two judgments and two receipts recorded.

    Conveyances subject to fee:

    • Conveyances where ex-spouses both hold joint title until the property is sold to a 3rd party and then one of the ex-spouses elects to take sole ownership either by gift or sale
      • Subject to transfer fee since the conveyance is not per the divorce decree
      • Transfer fee is due on one half of the property's fair market value
    • Conveyances to or from an entity where that spouse does not have an interest in the entity are subject to transfer fee. A transfer fee is due on the property's full fair market value.

Joint Tenancy

  1. In preparing a transfer tax return to accompany a deed in which the owner of a single-family residence is a single male. He has requested that we prepare a deed from him (as sole owner) to himself and his cohabitant (as joint tenants). The couple does not plan to marry. Following are my questions:
    • When figuring the transfer fee, should I figure it on ½ the value of the real estate or should I figure it on the entire value? Transfer fee is due on one half of the fair market value since one half of the value is being conveyed.
    • Grantor/Grantee relationship: Is it none? Or is it "Other" with the explanation of "cohabitants"? Either one applies or both may be checked. "Other" must have an explanation.
    • Type of Transfer: Should it be "Other" and explained as "Conveyance" with no explanation? "Other" can be checked and explained as "cohabitants."
    • Ownership interest transferred: Should it be "Full" or should it be "Other" and explained by "Grantor is conveying a ½ interest to Grantee"?"Other" and explained by "Grantor is conveying a ½ interest to Grantee".
    • Does Grantor retain any of the following rights: Should it be "None" (because he is giving up his rights as an individual owner and conveying them to himself and his cohabitant as joint tenants)? Or should it be "Other" and explained with "Grantor retains a ½ interest"? "Other" and explained with "Grantor retains a ½ interest".
  2. In filing a quit claim deed from a surviving spouse disclaiming joint tenancy in the real estate of the decedent  under sec. 854.13(2) (b), Wis. Stats., the effect is as though the surviving joint tenant had predeceased the decedent.  Is a transfer return required? Also, would a return be required when the children of the decedent disclaimed any interest in the estate and they had no prior interest or title in the real estate?

    The spousal deed would be exempt from return and fee per sec. 77.25(11), Wis. Stats., as being "By will, descent or survivorship."  It is assumed that spouses may also have an interest in the property under marital property law. For the children, since they had no prior interest or title in the property, this would be exempt from return and fee pursuant to sec.77.21 (1), Wis. Stats. You should state on the document something to the effect "this is a disclaimer only and not a conveyance as defined by sec. 77.21(1), Wis. Stats, and therefore is exempt from return and fee imposed under sec. 77.22(1), Wis. Stats. " If they had an interest in the property, then the use of the exemption per sec. 77.25(11), Wis. Stats., would apply. We have instructed the Register of Deeds that they should not accept exempt recordings verbally and the person recording the document should place the exemption on the document when no return is furnished.

FOR MORE INFORMATION CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Local Government Services Bureau
PO Box 8971, MS 6-97
Madison, WI 53708-8971
Phone: (608) 264-6885 or (608) 266-1594
Fax: (608) 264-6897
Email additional questions to eretr@revenue.wi.gov

March 21, 2014