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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Regarding the Callifornia Property Transfer Tax, is it autodeterminable

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Regarding the Callifornia Property Transfer Tax, is it autodeterminable or the tax authority determines it for the transferror? What is the amount considered, the sale price or the fair market value?

LEV :

Hi and welcome to Just Answer!


The California Property Transfer Tax is based on locality and property value - see here - http://www.californiacityfinance.com/PropTransfTaxRates.pdf


If the property is sold at its fair market value - the transfer tax is based on the sale price.


If the property is sold below the fair market value to the related party - the fair market value is used.


See for reference - http://www.boe.ca.gov/lawguides/property/current/ptlg/rt/11925.html


(d) No levy shall be imposed pursuant to this part by reason of any transfer between an individual or individuals and a legal entity or between legal entities that results solely in a change in the method of holding title to the realty and in which proportional ownership interests in the realty, whether represented by stock, membership interest, partnership interest, cotenancy interest, or otherwise, directly or indirectly, remain the same immediately after the transfer.


Thus a simple transfer from the owner to a 100% owned LLC is not subject of the transfer tax in CA.

Customer:

Thank you very much for your assistance,

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