Request By:
Mr. Timothy W. Martin
Attorney at Law
Brown, Todd & Heyburn
16th Floor Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
In your letter of March 17, 1983, you asked whether the following transactions would be exempt from the real estate transfer tax imposed by KRS 142.050:
(1) Transfers from individuals to a partnership composed of those same individuals whereby the property is placed in the "partnership's name";
(2) Transfers from a partnership to the individuals comprising the partnership in dissolution or otherwise, the transfer being by one deed to the three partners as "tenants-in-common";
(3) Transfers where the partnership, in essence, subdivides the property and transfers portions of the property to the individual partners with the subdivision of the property being based on the partners' respective percentage of ownership; and
(4) A transfer by a trustee to a successor trustee appointed pursuant to the original trust instrument.
Assuming the conveyance is made with only nominal consideration, the type of transfer described in (1) would be exempt from the real estate transfer tax pursuant to KRS 142.050(8)(k). That subsection exempts the transfer of title of real estate "between individuals and the corporation, with only nominal consideration therefor, if those individuals are the exclusive owners of that corporation." Pursuant to KRS 446.010(8), "'Corporation' may extend and be applied to any corporation, company, partnership, joint stock company or association."
The type of transfer described in (2) would also be exempt from the real estate transfer tax pursuant to KRS 142.050(8)(k).
The type of transfer described in (3) would constitute a partition of the property. Transfers of title arising from the partition of property are exempt from the real estate transfer tax pursuant to KRS 142.050(8)(g). Please see OAG 77-119.
The type of transaction described in (4) does not appear to fall within any of the exemptions set out in subsection (8) of KRS 142.050. Consequently, the transfer described in (4) would be subject to the real estate transfer tax.