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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Tax avoidance Posted by Ward-CA- on November 26, 2003 at 5:15 PM In Reply to: avoiding 3.3% tax in CA posted by gcastro on November 26, 2003 at 3:08 PM : Ward, I know that forming a revocable trust in CA does not exempt you from The 3.3% when selling. However I would like to hear your opinion on this reasoning. I was reading the definition of a revocable trust vs. Irrevocable trust, and realized, that If I purchased a property subject to, using the THT method, and have the Seller assign me 100% of the interst of the trust, that this transaction should be exempt of the 3.3% tax when selling. Why? Becouse the seller cannot revoke the trust. Isn't that an irrevocable trust? I think it would be debatable in an audit with the IRS don't you tink? Anyways, I wonder if that is why the escrow company that I am working with never charges me the 3.3%, assuming it is an irrevocable trust rather than a revocable, when it clearly says on the deed that it was a revocable trust. ? =?=?=?=?=?=?=?=?=?=?= Gonzalo, First of all the 3.3% tax is an advance withholding of your CA income tax, NOT IRS. Perhaps the reason your escrow company doesn't debit you the 3.3% tax is that it is charged against the Seller's proceeds not the Buyer's, and only if the property is investment property rather than the Seller's home. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, I know that forming a revocable trust in CA does not exempt you from The 3.3% when selling. However I would like to hear your opinion on this reasoning. I was reading the definition of a revocable trust vs. Irrevocable trust, and realized, that If I purchased a property subject to, using the THT method, and have the Seller assign me 100% of the interst of the trust, that this transaction should be exempt of the 3.3% tax when selling. Why? Becouse the seller cannot revoke the trust. Isn't that an irrevocable trust? I think it would be debatable in an audit with the IRS don't you tink? Anyways, I wonder if that is why the escrow company that I am working with never charges me the 3.3%, assuming it is an irrevocable trust rather than a revocable, when it clearly says on the deed that it was a revocable trust. ? : =?=?=?=?=?=?=?=?=?=?= : Gonzalo, : First of all the 3.3% tax is an advance withholding of your CA income tax, NOT IRS. : Perhaps the reason your escrow company doesn't debit you the 3.3% tax is that it is charged against the Seller's proceeds not the Buyer's, and only if the property is investment property rather than the Seller's home. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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