Under Illinois law, which statement best describes how transfer tax payment responsibility is determined at closing?
Correct Answer
A) Statutory incidence, local custom, and contractual allocation are three distinct concepts that must each be considered separately to determine who pays a given transfer tax.
Answer A is correct because Illinois transfer tax payment involves three distinct layers: (1) statutory incidence under 35 ILCS 200/31-1 et seq. and applicable local ordinances, which establishes who is legally liable; (2) local custom, which varies by county and municipality; and (3) contractual allocation between buyer and seller in the purchase agreement. These three concepts do not always align, and a licensee must analyze each separately for every transaction rather than assuming a single universal rule applies.
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Related Topics & Key Terms
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