Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2018

Property Tax Annotations

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Annotation 220.0274.005

220.0274.005 Interspousal Transfer. C and K inherited two pieces of property and took title as tenants in common. Their tenancy in common interests were taken as their separate property. Subsequently, they transferred the properties to an LLC that was owned 50 percent by C and C’s spouse, J, trustees of the X Family Trust and 50 percent by K and K’s spouse, E, trustees of the Y Living Trust. Because the LLC was created during the marriages, the membership interests in the LLC are presumed to be community property of C and K and their respective spouses. When entity interests are owned as community property, the spouses are treated as having equal interests in the entity as if they were joint tenants. Therefore, for property tax purposes, C, J, K and E are treated as each having 25 percent interests in LLC.

Prior to the transfer of the Properties to LLC, C and K each owned 50 percent of the Properties. After the transfer, the Properties were owned by LLC, which was owned 25 percent each by C, J, K and E. Therefore, the ownership interest did not remain the same. Moreover, the interspousal exclusion is not applicable since the transfer of the properties was made from C and K to LLC and not to their respective spouses. C 2/29/2012.