Also known as: transfer taxes · transfer-tax · estate transfer tax · gift transfer tax
Written by attorneys · grounded in primary & secondary sources — see below
A tax levied on the conveyance or passage of property from one person to another. The tax commonly appears in real estate closings as a required filing and in donative transfers as an estate, gift, or generation-skipping levy whose amount may prompt modification of governing documents.
Tanya Tang agrees to sell beachfront land to Tidal Energy. At the scheduled closing the title agent prepares the deed, closing statement, title commitment, and transfer tax forms. The parties review and execute the forms so the deed can be recorded without delay.
A physician registers to dispense marijuana under federal law. Each time the physician transfers a quantity to a patient the registration and transfer tax must be paid and documented. Failure to pay the tax exposes the physician to federal penalties even if state law permits the activity.
Select any source to read its text and confirm it supports the definition.
Purdy's will directs that all succession and transfer taxes be paid from the residuary estate left to his brother's descendants. The executors pay federal estate tax and state inheritance taxes. The residuary beneficiaries bear the reduction in the amount they ultimately receive.
Drye inherits his mother's estate but owes federal taxes. He attempts to disclaim his interest more than nine months after her death. Because the disclaimer is untimely under federal rules the interest remains his property and is reachable by the government's tax lien.
Closing documents include the deed, closing statement, title insurance commitment, and transfer tax forms. Lawyers and title agents review these instruments to ensure liens and encumbrances are addressed and that the deed correctly reflects the agreement before recording.
Supporting sources
A donative document may be modified when the change furthers the donor's tax objectives and does not violate the donor's probable intention. Courts have granted such modifications when extrinsic evidence shows the donor valued tax minimization and the alteration preserves the core beneficial scheme.
Supporting sources
A surviving joint tenant must disclaim the survivorship interest within nine months of the other tenant's death. An untimely disclaimer fails to qualify under I.R.C. § 2518 and leaves the interest subject to federal transfer-tax consequences and liens.
Supporting sources
The GST tax is imposed on transfers to beneficiaries two or more generations below the transferor. The tax is charged to the transferee on a direct skip at death and is calculated by reference to the beneficiary's generational assignment under federal rules.
Supporting sources
…all individuals importing, producing, selling, or dealing in marijuana, and required the payment of annual taxes in addition to transfer taxes whenever the drug changed hands.[^maj-15] Moreover, doctors wishing to prescribe marijuana for medical purposes were required to comply with rather burdensome administrative…