Carol and her husband Robert transfer their Memphis home to Carol's sister as a gift. The deed lists a consideration of $0. The county register asks whether Tennessee realty transfer tax is owed. Which of the following best describes how the transfer tax applies to this transaction?
Correct Answer
D) Transfer tax may be owed based on the actual consideration or fair market value, as a gift to a sibling does not qualify for the spousal transfer exemption
Under Tenn. Code Ann. § 67-4-409, Tennessee provides specific exemptions from the realty transfer tax, including transfers between spouses and transfers to government entities. A transfer from a married couple to the wife's sister is NOT a transfer between spouses and does not fall within any blanket family exemption. Therefore, the transfer tax may apply based on actual consideration or assessed value, and the sibling relationship alone does not create an exemption.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
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