At a Nashville closing, the HUD-1 settlement statement shows a sales price of $500,000. The property was originally listed at $525,000, and the county's assessed value is $480,000. The outstanding mortgage being paid off is $310,000. For purposes of calculating the Tennessee realty transfer tax under Tenn. Code Ann. § 67-4-409, which figure should the closing attorney use as the tax base?
Correct Answer
B) $500,000 — the actual consideration stated in the purchase contract and deed
Under Tenn. Code Ann. § 67-4-409, the Tennessee realty transfer tax is calculated on the actual consideration paid — that is, the actual sales price as stated in the purchase contract and reflected in the deed. In this transaction, the consideration is $500,000. The closing attorney must use this figure, not the assessed value, the listing price, or the mortgage payoff amount.
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