Request By:
Mr. Martin Roy Kirchhoff
Attorney at Law
31 East Fourth Street
Newport, Kentucky 41071
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You have a problem concerning the application of the real estate transfer tax of KRS 142.050 to a quit claim deed.
The property in question was first conveyed from AMBAC to Ford Motor Company by deed dated June 24, 1980, and recorded in D.B. 276, p. 10, clerk's office Boone County. The property was surveyed for that transaction.
Later, by deed dated April 21, 1982, Ford Motor Company conveyed the property to Cresticon, recorded in D.B. 293, p. 19, same clerk's office. A second survey of the property was conducted, but the survey of the earlier deed, at D.B. 276, p. 10, was used, since at the time Ford insisted on it.
However, since Cresticon wanted to have its second survey of record, it procured a quit claim deed of the same property from Ford. The quit claim deed contained no valuation, nor was the transfer tax paid.
The attached letter of the engineers who did the survey of the property indicates that the property surveyed for the quit claim deed is the same property described in AMBAC to Ford, D.B. 276, p. 10. The engineers merely wrote that there were some discrepancies in distances and bearings. The engineers professionally rationalized some of those differences, involving the use of a fence on one hand and a right-of-way line on the other. The engineers in essence are willing to certify that the parcels as surveyed for Cresticon are the same parcels of land conveyed by AMBAC to Ford Motor Company.
KRS 142.050(8)(d) constitutes an exception to the imposition of the transfer tax. It reads:
"The tax imposed by this section shall not apply to a transfer of title:
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"(d) which confirms or corrects a deed previously recorded. "
Under the facts given, it is our opinion that the quit claim deed was executed purely as a deed of correction as to the surveyed boundaries, although it was not called a deed of correction. We must stick to the realities of the situation. Since the transfer tax has been paid in connection with the transfer from Ford to Cresticon, it must not be paid again. Thus the quit claim deed does not call for imposing the tax, since it is exempt under KRS 142.050(8)(d), as above reasoned.
OAG 68-425, concluding that the tax applied to a quit claim deed, is clearly distinguishable, since in that opinion there is no showing that the tax had been paid on the same property involving the same grantor-grantee.
The fact that the parties chose the form of quit claim deed in this situation in no way changes the legal fact that the tax had been previously paid for the same property. The ultimate effect of the quit claim deed was merely to correct the engineers' description of the same property.
To impose the tax on the quit claim deed under these factual circumstances would be absurd. It was written in