Is there an exemption that applies for a conveyance to or from a nonprofit organization or church?
There is no exemption for conveyances to or from a nonprofit organization or church per administrative rule (Tax 15.03(5), Wis. Adm. Code). The fee is based on the property's fair market value if the conveyance is a gift or deed of nominal consideration. If the conveyance is a sale, the sales price should be used.
What does the exemption under sec. 77.25(20), Wis. Stats. mean?
Exemption 20 is for a conveyance made under sec. 184.15, Wis. Stats. to a "nonprofit association" as defined under sec. 184.01(2), Wis. Stats.
1997 Wisconsin Act 140 adopted the Uniform Unincorporated Nonprofit Association Act. The Act defines a nonprofit association as an unincorporated organization consisting of three or more "members" joined by mutual consent for a common, nonprofit purpose and permits the nonprofit association, in its own name, to acquire, hold, encumber or transfer real or personal property. Prior to this section, property was held by a fiduciary for the nonprofit association.
Exemption 20 allows the fiduciary to convey the vested estate or interest to the nonprofit association in its own name per "184.15 Transfers by a Fiduciary" without incurring a transfer fee.
Does filing a deed or other type of document to create a separate tax parcel number for an improvement on land leased from or owned by another require the submission of a transfer return?
Yes. This document is confirming the ownership of the improvement is separate from the land and requires the submission of a transfer return and Exemption 3 applies.
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There are two adjoining parcels with two tax parcel numbers. Before a garage can be built on the vacant parcel, the parcels must be combined under one legal description for zoning purposes. Does a transfer return need to be filed when filing the deed combining the lots?
Yes. This document is modifying (correcting) the legal description of these two parcels into a single parcel and requires the submission of a transfer return and Exemption 3 applies.
One parcel is being split into two parcels, with no change in ownership. Does a transfer return need to be filed?
Yes. This document is modifying (correcting) the legal description of this parcel into two separate parcels and requires the submission of a transfer return and Exemption 3 applies.
Is the property lister responsible for adding or deleting parcel numbers on an Electronic Real Estate Transfer Return that are wrong, incomplete or missing?
No. However, it is correct that the property lister can edit parcel numbers for accuracy. It is very important the receipt "mirrors" the document for grantors, grantees and parcels. The property lister and the Wisconsin Department of Revenue are not responsible for completing the transfer return by adding parcels. It is the filer's responsibility to submit a complete return. The Electronic Real Estate Transfer Return (RETR) business rules insure all required items are completed. However, RETR cannot check that all grantors, grantees and parcels are included.
Criteria for an RETR:
All parcels listed on the document are on the Receipt
When there are five or fewer parcels, each must be listed in a separate parcel section (Add Parcel)
When there are more than five parcels, the first five must be listed separately under "Parcels" and the remainder may be listed separately on the Legal description page
Note: If your county does not require parcel numbers on the document (they are required on the return), you can verify the property using the legal description.
For more information on RETR criteria, visit:
revenue.wi.gov/Pages/Publications/slf-pe100e.aspx
My neighbor and I had a new survey done and we need to record a deed correcting the lot line between us. Is a transfer return required for a lot line correction?
Yes. You must submit a transfer return when correcting a lot line. Depending on how it is recorded, you could do one of the following:
Correct the previously recorded legal description, which is exempt from fee under state law (sec. 77.25(3), Wis. Stats.)
Convey real estate having a value of $1,000 or less, which is exempt from fee under state law (sec. 77.25(13), Wis. Stats.)
A mother sold the family home to her son and daughter-in-law. Is there a transfer fee due on this amount?
Yes. Since this is a sale and there is consideration, a transfer fee is due. Exemption 8 not only requires that the conveyance be between a parent and child, it also requires that the transfer is for no consideration.
If parents gift their home to their son and daughter-in-law, is it exempt under state law (sec. 77.25(8), Wis. Stats.)?
Yes. Exemption 77.25(8) applies since that is no consideration: "Between parent and child, stepparent and stepchild, parent and son-in-law or parent and daughter-in-law for nominal or no consideration."
Note: At the time of conveyance, if there is any kind of mortgage attached to the property, then there is consideration and a transfer fee is due on the debt.
My father is giving my spouse and I a home valued at $121,000. We are assuming the mortgage to pay the remaining $77,000. Are we exempt from fee and how do we complete the RETR?
The exemption under sec. 77.25(8), Wis. Stats., requires the conveyance to be between parent and child and for no consideration. Since you are assuming the remaining mortgage, your situation does not meet the requirement of "no consideration." You must pay the transfer fee on the $77,000. Exemption 8 would apply as a gift for the equity of $44,000 conveyed.
Complete the RETR as follows:
Transfer type: Select "Sale" and "Gift"
Financing: Check "Assumed existing financing"
Total value of real estate transferred: $121,000
Value subject to fee: $77,000
Select Exemption 8
A father and two sons own one-third each on three properties. One son is deeding his one-third interest in each property to his father and brother. The mortgage is $360,000 and the real estate value is $300,000 for the properties. What is the value subject to transfer fee?
Since there is no exemption for a conveyance between brothers, fair market value ($300,000) is used in determining half the transfer fee
Since the mortgage is consideration, the conveyances between the parent and child is subject to fee on the debt (mortgage $360,000) and is used in determining half the transfer fee
Equity conveyed by child to parent is covered by Exemption 8
Value subject to fee in this case is on $110,000. Calculated as follows: one-half of one-third of the fair market value for the brother to brother conveyance plus one-half of one-third of the mortgage balance for the father to son conveyance
Two individuals own a piece of land that is now split into two parcels. The individuals now own two parcels that they would like to transfer so each individual owns his own parcel. Is a transfer fee due or can an exemption be used?
If the value of each parcel is equal, then each of the two deeds being filed meets the requirements of the Exemption 5 (state law sec. 77.25(5) Wis. Stats.), for deeds of partition. Each parcel's value to be conveyed should be indicated on the transfer return as half the total value of the lot, since each party is conveying his/her half interest in the property to the other. In such case, no transfer fee is due.
Example: Each lot is valued at $50,000. On each transfer return, report $25,000 as the real estate value conveyed. Report $0 value subject to transfer fee, and claim Exemption 5.
An aunt, uncle, niece and nephew all own a single parcel together and want to partition it into four equal lots, with one lot going to each party. Is a transfer fee due, or is there an exemption available?
If the value of each parcel is equal, then these deeds being filed meet the requirements of Exemption 5, for a deed(s) of partition. The value conveyed for each transfer return is three-fourths of the total value of the other three lots they are conveying their one-fourth interest in to the one receiving the lot.
Example: The original parcel is worth $120,000 and each resulting lot is valued at $30,000. For each transfer return, you would report $22,500 as the real estate value conveyed (3 conveying owners x 1/4 interest, each worth $7,500). Report $0 value subject to transfer fee, and claim Exemption 5.
Two single-member LLCs hold title as tenants-in-common to six condominium units and are interested in splitting up these properties. Is a transfer fee due on the value of each condo unit, or does Exemption 5, on partition apply?
No transfer fee is due if the total values of the interests each LLC receives are the same. Transfer fees are due if the values are unequal.
Example: LLC A is conveying units 3, 4 and 9 to LLC B; LLC B is conveying units 10, 11 and 12 plus $11,000 cash to LLC A.
The exemption in sec. 77.25(5) for partition applies whether the co-owners are individuals, entities or a combination of either. Here the two owners are going to divide the six condo units between them. The exemption in sec. 77.25(5) Wis. Stats., for partition applies to the degree that the partition is equal, but the cash boot (cash paid) of $11,000 is subject to transfer fee. The party receiving the cash boot, LLC A, is the party that owes the transfer fee because they are giving up more value of real estate than they are receiving, and are considered the grantor of the difference in value. The return for LLC A would use Exemption 5 for the portion that qualifies as a partition, and a fee would be due on the cash boot of $11,000.
How do you complete the transfer returns when there is an uneven division of real estate among co-owners? Assume three siblings jointly own three properties: Property 1 has a fair market value of $60,000, and properties 2 and 3 have a value of $90,000 each. Sibling A receives property 1, sibling B receives property 2, and sibling C receives property 3.
Example summary - in a true partition, there is no gain (or loss) of value of ownership interest; the property is divided equally in value among the owners. In this example, sibling A conveyed an interest in value of $20,000. The fee due on the value of $20,000 is allocated on the transfer returns for the deeds to Properties 2 and 3, where sibling A is the grantor. Siblings B and C gained an interest over all; therefore, they did not "convey" a value in the real property and are not subject to transfer fee per state law (sec. 77.25(5), Wis. Stats.).
Completing the returns for the deed of:
Property 1 from B and C to Sibling A
Type of Transfer: Check "Other" and explain "partition"
Total value of Real Estate transferred: $40,000
Transfer Fee: $0.00
Exemption: 5 applies to B and C as there is no gain or loss in value
Property 2 from A and C to Sibling B
Type of Transfer: Check "Other" and explain "partition"
Total value of Real Estate transferred: $60,000
Transfer Fee: $30.00 (payable by A for $10,000, being one-half the $20,000 value differential)
Exemption: 5
Property 3 from A and B to Sibling C
Type of Transfer: Check "Other" and provide the explanation "partition"
Total Value of Real Estate transferred: $60,000
Transfer Fee: $30.00 (payable by A for $10,000, being one-half the $20,000 value differential)
Exemption: 5
Note: The property value is determined by each property's fair market value per state law (sec.77.21 (3), Wis. Stats.). Do not adjust the fair market value by the amount of any liens on the property.
Is a quit claim deed for a partnership filing or canceling a statement of qualification effective July 1, 2016 or after under state law (sec. 178.0901, Wis. Stats.), subject to a transfer fee?
No. A deed filed for a partnership filing or canceling a statement of qualification is exempt from transfer fee under state law (sec. 77.25(6d), Wis. Stats.).
Is a quit claim deed for a general partnership registering to be a limited liability partnership effective prior to July 1, 2016 under state law (sec. 178.40, Wis. Stats.), subject to a transfer fee?
No. A general partnership registering as a limited liability partnership, is exempt under state law (sec. 77.25(6d), Wis. Stats.). "Pursuant to partnerships registering as limited liability partnerships under sec. 178.40, Wis. Stats." Exemption 6d is only for a general partnership registering as a limited liability partnership.
Can a partnership convert to a limited liability company with an effective date of July 1, 2016 or after, and be exempt per state law (sec. 77.25(6m), Stats.)?
Yes. Effective July 1, 2016 or after, the exemption applies when converting a business entity to another form of business entity under state law (sec. 178.1141, 179.76, 180.1161, 181.1161, or 183.1207, Wis. Stats).
Sec. 178.1141(1) - domestic partnership may convert to another type of domestic entity, other than a domestic partnership, or to any type of foreign entity, under secs. 178.1141 to 178.1145, Wis. Stats., and a plan of conversion if the conversion is permitted under the governing law of the converting entity and the governing law to be applied to the converted entity
Sec. 178.1141(2) - foreign or domestic entity, other than a domestic partnership, may convert to a domestic partnership under secs. 178.1141 to 178.1145, Wis. Stats., and a plan of conversion if the conversion is permitted under the governing law of the converting entity and the converted entity satisfies the definition of a partnership under this chapter immediately after the conversion
Sec. 179.76(1) - domestic limited partnership may convert to another form of business entity if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction governing the organization of the business entity into which the domestic limited partnership is converting
Sec. 179.76(2) - business entity other than a domestic limited partnership may convert to a domestic limited partnership if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction that governs the business entity
Sec. 180.1161(1)(a) - domestic (business) corporation may convert to another form of business entity if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction governing the organization of the business entity into which the domestic corporation is converting
Sec. 180.1161(2)(a) - business entity other than a domestic corporation may convert to a domestic corporation if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction that governs the business entity
Sec. 181.1161(1)(a) - domestic (non-stock) corporation may register to be another form of business entity if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction governing the organization of the business entity into which the domestic corporation is converting
Sec. 181.1161(2)(a) - business entity other than a domestic (non-stock) corporation may convert to a domestic corporation if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction that governs the business entity.
Sec. 183.1207(1)(a) - domestic limited liability company may convert to another form of business entity if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction governing the organization of the business entity into which the domestic limited liability company is converting
Sec. 183.1207(2)(a) - business entity other than a domestic limited liability company may convert to a domestic limited liability company if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction that governs the business entity
Can a general partnership convert to a limited liability company with an effective date prior to July 1, 2016 and be exempt per state law (sec. 77.25(6m), Stats.)?
No. Prior to July 1, 2016, the exemption only applies when converting a business entity to another form of business entity under state law (sec. 179.76, 180.1161, 181.1161, or 183.1207, Wis. Stats).
Note: Prior to July 1, 2016, a general partnership can only register to be a limited liability partnership under state law (sec. 77.25(6d), Wis. Stats.), which provides, "Pursuant to partnerships registering as limited liability partnerships under sec. 178.40, Wis. Stats." and cannot be combined with sec. 77.25(6m), Wis. Stats.
Is a quit claim deed from a general partnership to a limited liability company subject to a transfer fee?
Yes. A conveyance between a limited liability company and a general partnership is subject to transfer fee.
What are some examples of required relationships for Exemption 15 for corporations, 15m partnerships and 15s limited liability companies?
All exemptions under sec. 77.25(15), (15m) and (15s), Wis. Stats., require the transfer to be between the entity and one or more owners "who are related to each other as spouses, lineal ascendants, lineal descendants, siblings or spouses of siblings." Examples that qualify for the exemption include the following:
Sole ownership: Sole individual
Spouses: Spouse and spouse
Lineal: Parent(s) and child(ren); parent(s) and son-in-law/daughter-in-law; or grandparent(s),
parent(s) and grandchild(ren). Children includes adopted children but not foster children.
Siblings: Brother(s) and sister(s)
Spouses of Siblings: Brother(s) and sister(s)-in-law; sister(s) and brother(s)-in-law; brother(s) and brother(s)-in law; and sister(s) and sister(s)-in-law.
Examples that do not meet the relationship requirements:
- Aunt/uncle and nieces/nephews
Note:
- Conveyance can be to or from the entity
- Transfer must, in all cases, be for no consideration other than the assumption of debt or the acquisition of an interest in the corporation, partnership or limited liability company
- Conveyances from a corporation have an additional requirement. The corporation must have owned the property for three or more years.
Is a transfer of real estate from a partnership to partners who are not related, subject to a transfer fee?
Yes. The only possible exemption for a conveyance between a partnership and the partners is the exemption in state law (sec. 77.25(15m), Wis. Stats.). Since the partners are not related as required by the exemption, a transfer fee is due on the total fair market value of the real estate conveyed.
Exemption 15m applies to transactions "Between a partnership and one or more partners if all of the partners are related to each other as spouses, lineal ascendants, lineal descendants, or spouses of siblings and if the transfer is for no consideration other than the assumption of debt or an interest in the partnership."
Contact us at RETR@wisconsin.gov.