Robert is selling his home in Huntington, West Virginia for $350,000. The property's appraised fair market value is $320,000. At closing, the real estate excise tax (transfer tax) must be calculated based on which value under West Virginia law?
Correct Answer
C) The sales price of $350,000, because it is greater than the appraised fair market value
Under West Virginia's real estate excise tax rules, the transfer tax is calculated based on the sales price or the fair market value, whichever is greater. In this scenario, the sales price of $350,000 exceeds the appraised fair market value of $320,000, so the tax must be calculated on $350,000. This rule prevents tax avoidance through artificially low reported sales prices.
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Related Topics & Key Terms
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Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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