Findings Of Fact Prior to the hearing the parties jointly moved to consolidate the two (2) above styled cases and stated the stipulation would cover both 76-2197, D.O.A.H., and 77-604, D.O.A.H. The former involved six (6) deeds and the latter three (3) deeds. The following facts were stipulated to by the parties: The Respondent, Department of Revenue, imposed a documentary stamp tax upon six (6) deeds which transferred the title to properties from individual persons to Petitioner Corry. The transfer came about as a result of the following: In each of the six (6) transfers under question, Petitioner Corry sold property to certain individuals. The Petitioner gave to the individuals a deed and took back a purchase money mortgage. The purchasers made essentially no payments on the mortgage to Petitioner Corry and ultimately the purchasers deeded the property back to the Petitioner. The deeds were recorded in the courthouse records. In one of the deeds there is a specific statement that the deed is executed in lieu of foreclosure and that the purchaser is released from all liability. There is no such specific statement in the other deeds. By a Proposed Notice of Assessment dated August 3, 1976, the Respondent, Department of Revenue, sought to impose a documentary stamp tax upon the six (6) deeds. The consideration upon which the tax is based in cases like the instant case is usually the amount of mortgage debt forgiven but in the instant case no such information was provided and the tax was based on the assessed values of the property. Petitioner Corry is contesting the legal liability of Petitioner for the assessment and is not contesting the legal liability of Petitioner for the assessment and is not contesting the mathematical computation of the amount allegedly due. It is Petitioner's contention that the six (6) deeds are not subject to documentary stamp taxation inasmuch as the Petitioner paid nothing for the deeds and were signed by the mortgagors at the request of the Petitioner to clear title of the equitable owner. It is the Respondent Department of Revenue's contention that the six (6) deeds are subject to documentary stamp taxation since they are deeds in lieu of foreclosure or are deeds given when debts are rendered unenforceable. At the time the six (6) deeds were recorded on December 22, 1975, in Taylor County, the Deputy Clerk asked Petitioner how much he paid for the six (6) deeds in question and when he responded that he paid nothing for the deeds the Deputy Clerk advised him that he owed no documentary stamp tax or surtax thereon. Relying on the Deputy Clerk's advice, the deeds were recorded and no taxes were paid, only the recording fees. The Hearing Officer further finds: The deeds in question were secured for the purpose of clearing title to the equitable owner. The Petitioner paid nothing to the mortgagor for the deeds. The stipulation controls both cases No. 76-2197 and 77-604.
Recommendation Hold the assessments as valid assessment. DONE and ORDERED this 6th day of July, 1977, in Tallahassee, Florida. COPIES FURNISHED: Caroline C. Mueller, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 William W. Corry, Esquire Post Office Box 527 Tallahassee, Florida 32302 DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of July, 1977.
Findings Of Fact Paragraph 3 of the Petitioner's petition for administrative hearing provides: "That the Petitioners accepted a conveyance of certain real property in Brevard County, Florida in lieu of foreclosure of a mortgage held by them. The Department of Revenue contends that the documentary surtax should be paid on the deeds based on the amount of the outstanding mortgage at the time of the conveyances. It has served notice of the proposed assessments against each of the Petitioners in the following amounts, to wit: Jesse Jackson Parrish, Jr., tax - $187.00, penalty - $187.00, interest - $5.61, total due to date - $379.61; Ralph Bernard Parrish, tax - $187.00, penalty - $187.00, interest - $5.61, total due to date - $379.61; J.J. Parrish & Company, Inc., tax - $374.55, penalty - $374.55, interest - $11.24, total due to date - $760.34, and Pauline Bryan, tax - $187.00, penalty - $187.00, interest - $5.61, total due to date - $760.34, and Pauline Bryan, tax - $187.00, penalty - 187.00, interest - 5.61, total due to date - $379.61. That the statutes, Florida Statutes, 201.02, does not require payment of the documentary sur tax in such a case. The condition of this statute, by the court, in Leadership Housing, Inc., a Delaware corporation vs. Department of Revenue of the State of Florida, Fla. App. 336 So 2d 1239, holds that the statute should be strictly construed in favor of the tax payer and against the Government." In its answer the Respondent admitted the allegations contained in the first three sentences of the above quoted paragraph. In response to the last sentence of Paragraph 3 of the petition, the Respondent answered as follows: "Respondent denies the following allegations contained in the fourth sentence of paragraph three, if Petitioners are refering to section 201.021 Florida Statutes, and asserts that the conveyance which is the subject of this cause is subject to the imposition of documentary surtax stamps pursuant to section 201.021, Florida Statutes. Respondent, with respect to the allegations contained in the last sentence of Paragraph 3, admits to the existence of the decision in the Leadership Housing Inc., a Delaware corporation v. Department of Revenue of the State of Florida case, but asserts that such decision is not applicable in the instant cause." Since the allegations of the first three sentences of Paragraph 3 of the petition have been admitted by the Respondent, the allegations will be accepted as facts, and are intended to be construed as findings of fact herein. In Paragraph 2 of their petition, the Petitioners alleged: "There are no issues of material fact." In its answer the Respondent did not admit this allegation, but rather asserted that it was without knowledge with respect to it. The position taken by the Respondent at the final hearing clearly indicates that the Respondent is in agreement that there are no issues of fact to be determined in this case. On or about December 23, 1975, Alexander H. Clattenberg, Jr. and John Lowndes, Trustees, executed warranty deeds granting to Jesse Jackson Parrish, Jr., Ralph Bernard Parrish, and Pauline Parrish Bryan three separate parcels of land located in Brevard County, Florida. These warranty deeds were received in evidence respectively as Respondent's Exhibits 4, 2, and 3. On or about July 8, 1976, Alexander H. Clattenberg, Jr. and John F. Lowndes, Trustees, executed a warranty deed granting to J. J. Parrish & Company, Inc., certain real property located in Brevard County, Florida. A copy of this deed was received in evidence as Respondent's Exhibit 1. On or about December 29, 1976, the Respondent issued notices of proposed assessment against Jesse Jackson Parish, Jr., Ralph Bernard Parrish, and J. J. Parrish & Company, Inc. based upon Respondent's Exhibits 4, 2, and 1. Copies of these notices of proposed assessment were received in evidence as Respondent's Exhibit 5. A copy of a proposed assessment against Pauline Parrish Bryan was neither offered into evidence nor received. It is alleged in the Petitioners' petition, and admitted in the Respondent's answer, however, that a notice of proposed assessment was served upon Pauline Bryan. Except insofar as the pleadings contain undisputed allegations respecting the consideration for the warranty deeds that were received in evidence as Respondent's Exhibits 1 through 4, there was no evidence presented at the final hearing from which any findings can be made respecting the consideration for the deeds.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED: That the Respondent assess documentary surtaxes, interest, and penalties against the Petitioners in the amounts set out in Paragraph 3 of the Petitioners' petition for administrative hearing. RECOMMENDED this 31st day of May, 1977, in Tallahassee, Florida. STEVEN PFEIFFER Assistant Director Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Mr. Harry L. Coe Executive Director Department of Revenue Room 102, Carlton Building Tallahassee, Florida 32304 Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 Joe D. Matheny, Esquire Henderson, Matheny & Jones P. O. Box 6536 Titusville, Florida 32780
Findings Of Fact On July 17, 1975, petitioner and his wife executed a mortgage encumbering certain real property in Broward County and a promissory note in the principal amount of fifty-seven thousand five hundred dollars ($57,500.00) in favor of William J. and Carol M. Galione. Respondent's exhibit No. 1. This instrument was recorded the same day in the official records of Broward County. At that time, petitioner paid documentary stamp tax in the amount of eighty-six and one quarter dollars ($86.25); and intangible tax in the amount of one hundred fifteen dollars ($115.00). Petitioner's exhibit No. 1. On February 1, 1977, petitioner and his wife entered into a mortgage modification agreement by which the same real property was encumbered as security for indebtedness to the Galiones in the principal amount of ninety- thousand dollars ($90,000.00). Joint exhibit No. 1. By the same instrument, the monthly payments petitioner and his wife had originally undertaken to pay the Galiones were increased and a new maturity date for the balance was established. On February 8, 1977, this instrument was recorded in the official records of Broward County. In connection with this recordation, petitioner paid documentary stamp tax in the amount of fifty-one and fifteen hundredths dollars ($51.15) and intangible tax in the amount of sixty-eight and thirteen hundredths dollars ($68.13).
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent's proposed assessment against petitioner be made final. DONE and ENTERED this 3rd day of July, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Edwin J. Stacker, Jr., Esquire Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32301 Robert W. Crawford, Esquire 1215 East Broward Boulevard Fort Lauderdale, Florida 33301
Findings Of Fact The facts in this case are derived from the exhibits submitted into evidence at the hearing and the testimony of petitioner H.R. Thornton, Jr. The pertinent documents show that a portion of a lot located in the toxin of St. Cloud, Florida, owned by Garold D. Doak, Sr. and Susan E. Doak, his wife, was mortgaged by the Doaks to Peachtree Mortgage Corporation on December 28, 1972, in the amount of $16,850.00. On January 4, 1973, Peachtree Mortgage Corporation assigned the Mortgage to the Hamilton Federal Savings and Loan association of Brooklyn, New York. On February 6, 1976, a lis pendens was filed against the property by the assignee of the mortgage in the Circuit Court of the Ninth Judicial Circuit of Osceola County, Florida, incident to an action to foreclose the mortgage. On March 15, 1976, the Doaks executed quitclaim deeds on the property to Stephene J. Houseman. On April 6, 1976, a final judgement of foreclosure was entered in the Circuit Court of the Ninth Judicial Circuit in favor of Hamilton Federal Savings and Loan Association of Brooklyn, New York. (Exhibit 1-6) On April 27, 1976, Houseman executed a quitclaim deed on the property to petitioners. On April 30, 1976, the Thorntons conveyed their interest in the property by warranty deed to Jaiies Francis Wiczorek and Shirley Lillian Wiczorek, his wife. The deed recited that it was subject to the outstanding mortgage to Hamilton Federal Savings and Loan Association with a principal balance of sec. 16,224.52 which the grantees agreed to assume and pay. The deed further recited a consideration of $4,000.00 and documentary stamp tax in an appropriate amount was paid based on a consideration which included the cash payment and the mortgage amount. On July 30, 1976, the mortgage in question was satisfied. (Exhibits 8-10) Only minimal documentary stamp tax of thirty cents was paid on the quitclaim deed from Houseman to petitioners. Respondent issued a notice of proposed assessment of additional documentary stamp tax in the amount of $48.60, surtax in the amount of $17.60, penalties in like amounts, and interest thereon, for a total of $158.51, on March 21, 1977. The proposed assessment was based on consideration stated to be the existing mortgage on the property in the amount of $16,224.52. On April 29, 1977, petitioners filed their petition for an administrative hearing, challenging the proposed assessment on the grounds that there was no evidence to show the taxable consideration as found by respondent. By an amended and revised notice of proposed assessment, dated April 29, 1977, the amount for documentary surtax, penalty and interest thereon was deleted leaving only the sums relating to documentary stamp tax, penalty, and interest in the amount of $102.30. (Exhibit 8) Petitioner H.R. Thornton, Jr. took the quitclaim deed in question to cancel a $100.00 debt owed him by Houseman. He had no intent to make the mortgage payments or payments or pay any other consideration for the transfer. (Testimony of Thornton)
Recommendation That petitioners be held liable for payment of documentary stamp tax, penalty and interest under Chapter 201, Florida Statutes, as modified herein with respect to the penalty. Done and Entered this 29th day of August, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Daniel C. Brown, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 H. R. Thornton, Jr., Esquire Post Office Box 345 St. Cloud, Florida 32769
Findings Of Fact Based upon the oral argument of the parties and the evidence adduced at the hearing, as well as the pleadings, the following pertinent facts are found: On June 30, 1973, an agreement for purchase and sale was executed between Bayshore 21, Inc., as purchaser, and Arthree, Inc., as seller, for the purchase and sale of real estate commonly known as the Carriage House. This agreement was executed by Bayshore 21, Inc. in its corporate name, and not as a trustee or other representative capacity. The provisions of this agreement were individually guaranteed by Marvin Glick, the president and sole stockholder of Bayshore 21, Inc. The purchase and sale agreement discloses that the total purchase price of the property is $19,500,000, payable by taking subject to a first mortgage held by the Prudential Insurance Company with the remainder, subject to certain prorations, to be paid in cash. An earnest money deposit in the amount of $500,000.00 was placed in escrow by Bayshore at the time of execution of the purchase and sale agreement. Bayshore 21, Inc. represented and warranted in said agreement that it was a corporation duly organized and in good standing with full capacity to make and execute the agreement and to consummate the transaction embodied therein. Further, Bayshore warranted that there was no provision in its charter or bylaws, nor was it a party to any agreement, which would limit or prevent its consummation of the agreement. Also, Bayshore reserved the right to assign it's interests to any other party upon the assignee's assumptions of Bayshore's obligations or to direct Arthree, Inc. that the deed or other closing instruments would run in favor of a designated grantee other than Bayshore. Pursuant to the agreement for purchase and sale described above, Arthree, Inc. conveyed the Carriage House to Bayshore 21, Inc. by warranty deed dated August 17, 1973. There was evidence that the transaction was not closed until August 23, 1973. Bayshore 21, Inc. took title in its own corporate name, and not as a trustee or in a representative capacity. Proper documentary stamps were attached to this document. On either August 22 or 23, 1973, Bayshore 21, Inc. executed a $1,300,000.00 note and mortgage to Commercial Trading Company, Inc. and a $5,000,000.00 note and mortgage to Security Mortgage Investors. These notes and mortgages were in the corporate name of Bayshore 21, Inc. but were guaranteed by the petitioner and Marvin Glick. These guarantees contain language that the mortgagee may proceed directly against the guarantors in the event of default. There was evidence that utilization of Bayshore 21, Inc. to effectuate the loans from Commercial Trading Company and Security Mortgage Investors was required by said mortgagees because of the fact that the then prevailing interest rate levels were in excess of the noncorporate statutory interest limit. On August 23, 1973, a joint venture agreement was entered into between petitioner and Marvin Glick. This joint venture agreement provided that "The parties acknowledge that BAYSHORE 21, INC. has taken title to certain property as trustee for ZUCKERMAN-VERNON CORP. and MARVIN GLICK and, upon completion of the financing arrangements, will convey the property to ZUCKERMAN-VERNON CORP. and MARVIN GLICK, a fifty (50 percent) percent interest being conveyed to each party. The property that is the subject of this joint venture is the CARRIAGE HOUSE, located at 54th Street and Collins Avenue, Miami Beach, Florida, each party to this agreement having a fifty (50 percent) percent interest in said property." On August 27, 1973, title to the Carriage House was conveyed by quitclaim deed from Bayshore 21, Inc. to Marvin Glick and petitioner, each to have an undivided fifty percent interest. Minimal stamps were affixed to this document, which bore the notation "No documentary stamps are required on this Deed inasmuch as the Grantor took title solely as Trustee for the Grantees herein." Thereafter, the respondent Department of Revenue assessed the parties to this August 27, 1973 deed for the documentary stamp taxes due, based upon the $18,550,000.00 existing mortgages on the property at the time of the conveyance ($12,250,000.00 to Prudential, $5,000,000.00 to Commercial Trading Company and $5,000,000.00 to Security Mortgage Investors). The delinquent documentary stamp taxes were assessed in the amount of $55,649.70, and a penalty was assessed in a like amount, making the total amount due $111,299.40.
Recommendation Based upon the above findings of fact and conclusions of law, it is recommended that petitioner be assessed the taxes and penalties set forth In the proposed Notice of Assessment of Tax and Penalty under Chapter 201, Florida Statutes, dated April 23, 1975. Respectfully submitted and entered this 30th day of January, 1976, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Ed Straughn Executive Director Department of Revenue Room 102, Carlton Building Tallahassee, Florida 32304 Paul R. Lipton, Esquire 17071 West Dixie Highway North Miami Beach, Florida Harold F.X. Purnell, Esquire Assistant Attorney General The Capitol Tallahassee, Florida
Findings Of Fact On May 8, 1986, Petitioner filed with the Department of Revenue, as agent for the Comptroller, an application for documentary stamp tax refund in the amount of $16,125.00. Subsequently, the Department of Revenue recommended that the application be denied and on November 24, 1986, the Comptroller issued an Order denying the application. Thereafter Petitioner duly requested an Administrative Hearing pursuant to the provisions of Chapter 120, Florida Statutes, and such hearing was duly conducted by William J. Kendrick, Hearing Officer for the Division of Administrative Hearings, on April 13, 1987, in Tallahassee, Florida. On June 10, 1987, Hearing Officer Kendrick issued his Recommended Order in which he separately stated Findings of Fact and Conclusions of Law and recommended that the application be approved. Copies of that Recommended Order have been furnished to all parties. Petitioner has filed no exceptions to the Recommended Order as of the date hereof, however, the Assistant Attorney General, representing the Comptroller in this matter, has filed exceptions to paragraph 5 of the hearing officer's Conclusions of Law which reads as follows. The tax imposed by Section 201.08, Florida Statutes, is levied on a written obligation to pay money, not on a security interest. Under the provisions of Section 201.09(2), a security interest (mortgage) is not subject to taxation if the written obliga- tion to pay money (promissory note) is exempt from the tax. Therefore, whether the transac- tion is exempt is dependent upon whether there was any material change in the promissory note and the renewal note, and not whether there as any material change in the mortgage. Since, in the instant case, there was no material change between the original promissory note and the renewal note, it follows that the subject transaction is exempt from the tax levied by Section 201.08, Florida Statutes. The Findings of Fact as determined by the Hearing Officer were by stipulated agreement of the parties filed with the hearing officer on June 8, 1987. Those findings are adopted as the Findings of Fact for this Order and were as follows: On February 2, 1981, a Mortgage and Security Agreement was signed by the proper corporate officers of SNW Corp. ("SNW"), PNW Corp ("PNW"), and KNW Corp. ("KNW"), all Florida Corporations securing a Note in the amount of $22,000,000.00 upon which documen- tary and intangible taxes were paid. On October 1, 1983, an Amendment to the Mortgage was signed by the appropriate corporate officers of SNW, PNW AND KNW. No documentary stamps were affixed to this document. On March 13, 1986, a Second Amend- ment to Mortgage and Security Agreement (the "Second Amendment") was signed by the appro- priate corporate officers of SNW, PNW, KNW, and Kenneth Wolofsky, Individually and as Trustee. The Second Amendment refers to the Mortgage and was intended to "secure that certain Renewal Note" from SNW, PNW AND KNW in the amount of $10,000,000.00. The Renewal Note was executed by Kenneth Wolofsky solely in his corporate capacity on behalf of KNW not individually or as trustee. Petitioner, Chicago Title Company, was acting in its capacity as agent for the borrowers and was responsible for having the Second Amendment to Mortgage and Security Agreement dated March 13, 1986, recorded. Documentary stamps were paid under protest upon recordation of the Second Amend- ment in the amount of $16,125.00. Petitioner filed an Application for Refund from the State of Florida for the documentary stamps paid on the Second Amend- ment which was denied by the Comptroller of the State of Florida. Thereafter, the Peti- tioner sought an administrative hearing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner's request for refund in the sum of $16,125.00 be GRANTED. DONE AND ORDERED this 10th day of June, 1987, in Tallahassee, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2900 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of June, 1987. APPENDIX Petitioner's proposed findings of fact 1-6 are addressed in paragraphs 1-6, respectively. Respondent's proposed findings of fact 1-6 are addressed in paragraphs 1-6, respectively. COPIES FURNISHED: Warren R. Tranzenfeld, Esquire Kirkpatrick & Lockhart 1428 Brickell Avenue Forth Floor Miami, Florida 33131 Alan Burns, Esquire Department of Legal Affairs Tax Section, Capitol Building Tallahassee, Florida 32399-1050 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0305 =================================================================
Findings Of Fact By warranty deed dated July 29, 1974 Marco Cove, Inc. conveyed certain property to the Barnett Bank of Naples, Florida as Trustee. At the time of these conveyances the properties were subject to a first mortgage dated September 14, 1971 in an original principal amount of $1,400,000 to AMI Investments, Inc. mortgagee and a second mortgage dated August 24, 1973 in the amount of $130,278 to Joseph R. Lynch, Inc. By quitclaim deed dated November 5, 1974 (Exhibit 8) Donald P. Landis conveyed his interest in Apartment Number C-3 in the condominium here involved to the Barnett Bank of Naples, Trustee. It appears that at the time of the conveyances here involved Marco Cove, Inc. was delinquent on both mortgages, owed materialmen's liens on the property, had sold some of the units to innocent purchasers without giving clear title, and had not placed in escrow the sums so received from these purchasers. Barnett Bank accepted title as trustee, so the various rights of the parties could be resolved without foreclosure proceedings. Although Petitioner contested that Barnett Bank was Trustee for AMI Investments, Inc., Exhibit 10, which was admitted into evidence without objection, clearly shows the bank understood they were trustees for AMI Investments, Inc. and accepted the deeds here involved. At the time of the conveyances the balance owned on the first mortgage was $63,356.16 and on the second mortgage $130,278. Respondent's third Notice of Proposed Assessment (Exhibit 3) assesses documentary stamp taxes and penalties in the amount of $59.25 on each of the three condominium units conveyed to the Trustee and documentary stamp tax and penalty in the amount of $547.88 on the conveyance of the entire condominium for a total tax and penalty of $725.63. No surtax is claimed. The conveyances to the Trustee did not extinguish the mortgages and the Trustee took title to the properties subject to these mortgages. Petitioner has subsequently sold its rights as first mortgagee to a third party for some $66,000.
The Issue The issue for consideration in this case is whether deeds by property owners which convey unencumbered real property to a corporation solely owned by them, are subject to a documentary stamp tax imposable under Section 201.021(1), Florida Statutes, and Rule 12B-4.013(7), Florida Administrative Code.
Findings Of Fact By Warranty Deed dated April 30, 1991, W. Dewey Kennell sold eight condominium apartments, units 1731, 1733, 1735, 1737, 1741, 1743, 1745 and 1747, in Baywood Colony Southwood Apartments IV, a condominium, to Kurt Rabau and Ronald Rabau, his son, residents of Germany. The Rabaus purchased the properties as an investment in rental property for income. At the time of the sale, the property was subject to mortgages totaling $250,000, which the Rabaus paid off on May 24, 1994. Sometime after the purchase, the Rabaus were advised to incorporate and hold title to the properties in a corporate capacity to protect themselves against personal liability. Thereafter, on September 14, 1994, the Rabaus formed Kuro, Inc., the Petitioner herein, to take and hold title to the properties, with Kurt Rabau and Ronald Rabau each owning 50% of the corporate stock. There were no other owners of stock in the corporation. On October 12, 1994, the Rabaus transferred all eight properties to Kuro, Inc. Kuro, Inc. had no assets other than the eight apartments, and did no business prior to the transfer of those apartments to it. Consequently, the stock of Kuro, Inc. was valueless prior to the receipt of the transferred apartments. The corporation’s federal tax form relating to transfer of property to a corporation, the “Corporation’s Statement on Transfer of Property Under Code Section 351” reflects that the Rabaus “transferred the jointly owned property [described therein] for which Kuro Inc. issued the stock”. From the evidence presented it is clear that the Kuro Inc. stock was issued in exchange for the contribution of the apartments to the corporation. Other documents in the corporation’s 1994 tax return indicate that the property was valued at fair market value at the time of transfer to the corporation, and the transferee’s, (corporation’s) adjusted basis was identical after the transfer. Each of the Rabaus received 500 shares of the corporation’s stock which was valued at $618,642. Of that amount, $617,642 was considered additional paid-in capital. There was no additional property received or possessed by the corporation. A minimal documentary stamp tax was paid by the parties at the time the eight Warranty Deeds for the apartments were transferred to the corporation. The consideration reflected on the face of each deed was “...the sum of $10.00 and other valuable consideration.” Subsequent to the transfer, the Department conducted an audit of the Clerk of Circuit Court in Sarasota County and, on November 10, 1994, issued a Notice of Intent to Make Documentary Stamp Tax and Discretionary Surtax Audit Changes, by which it indicated its intent to impose a documentary tax of $4,207.00 on the transfers, a 50% penalty of $2,103.50, and interest totaling $38.73 through November 10, 1994, with additional interest to accrue at the rate of 1% per month, prorated daily ($1.38), until date of payment. Thereafter, on March 27, 1995, the Department issued a Notice of Proposed Assessment to Kuro, Inc., and Petitioner timely filed a protest. Subsequent to that action, on January 11, 1996, the Department issued its Notice of Decision sustaining the proposed assessment, penalty and accrued interest, and Petitioner requested formal hearing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a final order imposing a tax in the amount of $4,207.00 with interest from date of filing at 1 percent per month based on the amount of tax not paid to date of payment. DONE and ENTERED this 22nd day of April, 1997, in Tallahassee, Florida. ARNOLD H. POLLOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 1997. COPIES FURNISHED: C. Samuel Whitehead, Esquire 2199 Ringling Boulevard Sarasota, Florida 34237 James F. McAuley, Esquire Office of the Attorney General The capitol - Tax Section Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue Tallahassee, Florida 32399-1011
The Issue Whether the Petitioner is liable for documentary stamp taxes and interest to the Respondent totaling $80,405.54, plus additional interest accruing from the date of the assessment, as reflected in the Notice of Proposed Assessment dated January 24, 2011.
Recommendation Based on the foregoing, Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order finding that Jorge Ramos does not owe documentary stamp taxes on the October 18, 2007, Warranty Deed and withdrawing the assessment in the amount of $80,405.54, plus interest at $11.89 per day from January 25, 2011. DONE AND ENTERED this 1st day of June, 2012, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of June 2012.
Findings Of Fact On December 27, 1976, Petitioner entered into an Assumption Agreement and Release of Seller, a copy of which is appended to this recommended order as Exhibit "A". The agreement contains, in writing, the obligation of Flagler Hospital, Inc., to pay Petitioner the sum of $238,464,52. The document is not a renewal of an existing obligation. On April 25, 1977, Respondent gave Petitioner notice that a penalty and interest under Section 201.08, Florida Statutes, had been assessed against it in the amount of $729.42 because the agreement constituted a note or written obligation to pay money. The agreement was executed in the State of Florida. No documentary stamp taxes have been paid regarding the agreement. The mathematical computation of the tax, penalty and interest is correct. The agreement represents the assumption of an existing debt between Petitioner and Inter-Medic Health Centers, Inc., by Flagler Hospital, Inc. The original debt is evidenced by a note and mortgage dated February 11, 1976. Documentary stamp taxes in the amount of $360.00 were paid as to the original note. No additional indebtedness was created by the agreement, but the agreement releases the original obligor, Inter-Medic Health Centers, Inc., from liability.
