Request By:
Mr. Bremer Ehrler
Jefferson County Clerk
Court House
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
A deed was presented in your office for recording which was a transfer from parents to son and daughter-in-law. At the time the deed was presented it had a stated consideration of $20,900.00. The deed was then taken back by the attorney and the consideration was changed to $1.00.
Two questions are asked:
(1) Is a conveyance to an in-law exempt from deed tax?
Answer: KRS 142.050(8)(3) exempts from the deed transfer tax transfers between husband and wife, or parent and child with only nominal consideration. Nowhere in the statute is there any mention made of exemption on transfers to in-laws. Applying the rule that exemptions from tax must be specifically spelled out, it is our opinion that the transfer tax applies to a transfer from a person to in-laws.
(2) Since the consideration was originally stated as $20,900.00, would it be correct to refuse to record the document if it had been changed to indicate a consideration of $1.00?
Answer: KRS 142.050(1)(b)(2.) provides that "value means in the case of a gift, or any deed with nominal consideration or without stated consideration, the estimated price the property would bring in an open market and under the then prevailing market conditions in a sale between a willing seller and a willing buyer, both conversant with the property and with prevailing general price levels.
In the absence of a stated value in a deed the property should be taxed at the prevailing market price level for property of this nature.