Request By:
Mr. James S. Secrest
Allen County Attorney
Box 35
210 W. Main Street
Scottsville, Kentucky 42164
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Three deeds have been lodged for recording with your county clerk. The real estate, lying in Allen County, was owned by a partnership composed of Lawrence Potts, Harold N. Potts, and Maloy Mullins. According to information given to the clerk, Mr. Elvis Russell, one of the partners, Lawrence E. Potts, is deceased. Thus an undivided 1/9 interest in the property, formerly belonging to Lawrence E. Potts, is purportedly being conveyed to each of his children, i.e., to John, Charles, and Lawrence Jr. The attorney who left the three deeds for recording maintains that the transactions are not subject to the transfer tax. As county attorney, you have advised the county clerk that the deed transactions are subject to the tax. Atlanta Counsel has informed us that the three deeds are merely to effectuate the terms of the will of Lawrence E. Potts, wherein he left the particular partnership property to his three sons equally, share and share alike. We assume that such will has been probated and that the subject property interest of Lawrence E. Potts, deceased, is not presently subject to any of his estate debts of any kind.
KRS 142.050 imposes a transfer tax upon the grantor named in the deed at the rate of fifty cents (50 ) for each five hundred dollars ($500) of value or fraction thereof, which value is declared in the deed upon the privilege of transferring title to real property.
Subsection (8) of the statute contains exceptions to the transfer tax, however, since the deed was designed to merely effectuate the will of Lawrence E. Potts, under the assumption that in the recorded will of Lawrence E. Potts he devised his undivided one-third (1/3) interest in subject partnership property to his three sons, equally, share and share alike, the holding of those interests in the property by the deceased's three sons occurred as a result of the probated will of their father. See KRS 394.130 and 394.300, and Rush v. Cornett, 169 Ky. 714, 185 S.W. 88 (1916) 90. Thus the deed of February 1, 1984, in legal reality transferred no real estate interest. Since KRS 142.050 relates to deeds, but not to wills, the transfer tax statute has no application here. See KRS 142.050(1)(a), which specifically excludes wills from the operation of the statute. Under this analysis, we never get to subsection (8), relating to the statutory exceptions. The deed to the three sons of Lawrence E. Potts mentions specifically the "partnership interest of Lawrence E. Potts, deceased. "