A Tennessee homeowner transfers her rental property to a limited liability company (LLC) that she solely owns for estate planning purposes. The deed is recorded with the county register of deeds. Under Tenn. Code Ann. § 67-4-409, which of the following best describes how the Tennessee realty transfer tax applies?
Correct Answer
D) The transfer tax applies to the greater of the consideration paid or the fair market value of the property
Tenn. Code Ann. § 67-4-409 imposes the realty transfer tax on the greater of the consideration paid for the transfer or the fair market value of the property transferred. Stating nominal consideration on a deed to a wholly owned LLC does not avoid the tax — the fair market value floor applies.
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Related Topics & Key Terms
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Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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