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.
Findings Of Fact The parties stipulated to the facts-of the case as follows: On March 2, 1972, the petitioners, Fred W. Baggett and John S. Miller, Jr., along with one Michael W. Duggar, incorporated a Florida corporation known as Tallahassee Properties , Inc. and filed Articles of Incorporation with the Secretary of State, State of Florida. On June 29, 1972, the above described corporation took title to the property described as follows: All that part of Lot Number 176 in the Original Plan of the City of Tallahassee, in the County of Leon, State of Florida, described as follows: to-wit: Begin at the Northwest corner of said lot and run thence East along the South line of College Avenue (formerly Clinton Street) 39 feet to the wall of a brick building, thence run South along the side of said building 60 feet, thence run West 39 feet to the East line of Adams Street, thence run North along the East line of Adams Street 60 feet to the Northwest corner of said Lot 176, being the point of beginning; from LeRoy Collins and Mary Call Collins, said deed being recorded in Official Records Book 532, Page 327 of the Public Records of Leon County, Florida. On that same date, Tallahassee Properties, Inc. executed a note and mortgage in the amount of $55,000 to Leon Federal Savings and Loan Association, said mortgage being recorded in Official Records Book 532, Page 328 of the Public Records of Leon County, Florida. The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Michael W. Duggar. On June 29, 1972, Tallahassee Properties, Inc. executed a note in the original principal amount of $72,405.84 to LeRoy Collins and Mary Call Collins secured by a second mortgage on the property and as recorded in Official Records Book 532, Page 376 of the Public Records of Leon County, Florida, The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Michael W. Duggar. On September 8, 1972, an agreement was entered into between Michael W. Duggar and Ronald C. LaFace of Tallahassee, Florida, wherein the said Michael W. - Duggar conveyed his interest in Tallahassee Properties, Inc. to Ronald C. LaFace and the said Ronald C. LaFace agreed therein to hold Michael W. Duggar harmless and relieve him of liability and indemnifying him for any liabilities which Michael W. Duggar may or could have as a result of his interest in Tallahassee Properties, Inc. This is the reason that the said Ronald C. LaFace is the proper party petitioner in this action. On April 18, 1973, Tallahassee Properties, Inc. executed an additional note to Leon Federal Savings and Loan Association in the amount of $17,500 which said note was also secured by that certain mortgage dated June 29, 1972 and recorded June 29, 1972 in Official Records Book 532, Page 328 of the Public Records of Leon County, Florida. The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Ronald C. LaFace. On April 23, 1973 by an instrument recorded in Official Records Book 584, Page 94 of the Public Records of Leon County, Florida, Tallahassee Properties, Inc. conveyed an equal one-third interest in the subject property to John S. Miller, Jr., Fred W. Baggett and 5 Ronald C. LaFace. Affixed to the said deed were documentary surtax stamps in the amount of 55 cents and State of Florida documentary stamp tax in the amount of 30 cents. By letter dated September 24, 1975, the respondent, State of Florida, Department of Revenue, informed the petitioners that they had failed to pay an additional documentary stamp tax in the amount of $434.70 due on that certain warranty deed described above as having been recorded on April 23, 1973 in the Public Records of Leon County, Florida. This proceeding was initiated by petitioners after having received said letter from the respondent for a determination that the assessment was improper in that the subject conveyance was not a taxable event. Respondent has asserted that a tax of $434.70 is due and owing from the petitioners. In addition, they have assessed an additional 100 percent penalty for a total claim of $869.40 exclusive of interest or other penalties. The assessment was determined by the Department of Revenue on the basis of adding the original principal balance of the three above described notes secured by mortgages. The original principal amount of the notes was $144,905.84. By the application of the tax imposed by Section 201.02, Florida Statutes, if the petitioners have any liability for payment of the documentary stamp tax, then the determination of $434.70 as an assessment is a correct figure. Petitioners' exhibits 1 through 4, respondent's exhibit 1 and 2, and posthearing briefs of counsel are appended to the record.
Recommendation That petitioners be, found not liable for the proposed assessment of documentary stamp tax and penalty under Chapter 201, Florida Statutes. Done and Entered this 10th 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: Edwin J. Stacker, Esquire Department of Legal Affairs the Capitol Tallahassee, Florida 32304 Daniel J. Wiser, Esquire Post Office Box 1752 Tallahassee, Florida 32302
Findings Of Fact Petitioners were desirous of having a custom built home on a lot of their choice. During the course of this endeavor they met Jack Brolsma, President of Jack Brolsma & Associates (hereinafter called Brolsma) a builder, and also learned that a particular lot owned by Yanow in which they were interested was for sale at a price of thirty thousand dollars ($30,000) plus interest on mortgage. On July 17, 1977 the Greenes entered into a contract with Brolsma to construct a house on Lot 12, Plat IV, The President Country Club in West Palm Beach, Florida for one hundred thirty five thousand dollars ($135,000). Brolsma at all times here involved, was a builder of custom homes and not a land developer as that term is generally recognized. Jack Brolsma owned fifty percent of the corporation bearing his name. The contract provided that Greene would obtain a construction money mortgage and pay to Brolsma one hundred thirty five thousand dollars ($135,000) for the house and lot with the understanding that the lot would be deeded to Greene at cost to Brolsma plus a cost for de-mucking which previous testings had indicated would be required to provide a stable foundation. By Warranty Deed dated August 1, 1977 (Exhibit 10) Brolsma acquired title to Lot 12 from the Yanows. Documentary stamp taxes attached to this deed indicates that the total price was thirty one thousand nine hundred dollars ($31,900). By Warranty Deed dated August 1, 1977 (Exhibit 4) Brolsma deeded Lot 12 to the Greenes. This deed was recorded August 9, 1977. The Greenes qualified for a one hundred eight thousand dollar ($108,000) mortgage with Sun First National Bank of Delray Beach, and on August 8, 1977 executed a mortgage (Exhibit 7) and the transaction closed. Buyers and sellers closing statements are contained in Exhibit 3. At the closing on August 8, 1977 documentary stamps in the amount of four hundred five dollars ($405) and surtax of one hundred forty eight dollars and fifty cents ($148.50) was charged to buyer and affixed to deed. At closing buyers paid some twenty seven thousand five hundred dollars ($27,500) and the previous mortgage on the land was satisfied. Thereafter the construction was commenced with the mortgagee making disbursement to Brolsma per schedule (Exhibit 13). Prior to the time Lot 12 was purchased by Brolsma, Petitioners were aware of the ownership of this lot and that it was for sale for approximately thirty thousand dollars ($30,000). Since Brolsma was more familiar with acquiring land than were Petitioners he agreed to obtain the lot upon which Petitioners had contracted to have their house built.
Findings Of Fact Petitioner is in the land development business. Petitioner sold residential lots to various purchasers and contracted through a sister corporation to construct homes on the lots. At the time the lots were conveyed no improvements had been made. Petitioner placed documentary tax stamps and documentary surtax stamps upon the deeds reflecting the consideration for the deeds as the price of the lots. Respondent contends that stamps should have been placed on the deeds reflecting the consideration as the price of the lots plus improvements. Accordingly Respondent is proposing to assess additional stamp taxes, surtaxes, penalties and interest upon the Petitioner in the total amount of $13,002.10. The pleadings, answers to interrogatories and responses to requests for admissions establish that unless Rule 12A-4.13(22), Florida Administrative Code is invalid, Petitioner is liable for the taxes Respondent proposes to assess. The transactions which form the basis of the proposed assessment are package deals within the meaning of the Rule.
Findings Of Fact On January 15, 1975, Gerardo Benesch, Jitka Benesch, H. Albert Grotte, Regina Grotte, Milorad Dordevic, Catalina Dordevic, Milodrag Savovic and Marina Savovic executed an agreement associating themselves in a general partnership, Andean Investment Company. The stated purpose of the partnership was to engage in the business of real estate development, selling, renting, and dealing generally in real estate of all kinds. It was recited in the agreement that, by forming the partnership, the parties wished to reduce their prior expense of managing separate properties through separate managerial agreements. To this end, they transferred certain real estate by quit-claim deed to the partnership, and these properties represented its capital. The agreement provided in Article IV that the net profits or net losses of the partnership would be distributed or chargeable, as the case might be, to each of the partners in percentage proportions based on the amount of their investment in the partnership. The property consisted of warehouses located in Deerfield Beach and Fort Lauderdale, Florida, from which rentals were derived (Petition and Exhibits thereto). All of the properties were encumbered by mortgages of varying amounts and all but two of the quit-claim deeds transferred title subject to the mortgage thereon. Two deeds provided specifically that the partnership assumed the existing mortgage. Although Petitioner's counsel states that this was not intended and was a "scrivener's error", Petitioner partnership has, in fact, made the mortgage payments on all of the properties since their transfer under the aforesaid deeds (Composite Exhibit 1, Stipulation). Petitioner paid only minimal documentary stamp tax on the deeds. Respondent thereafter issued four proposed Notices of Assessment of Documentary Stamp Tax, Surtax, and Penalty against the Petitioner on January 6, 1976, in the total amount of $3,797.00. The tax was computed under Rule 12A-4.13(10)(c), F.A.C., based on transfers of realty (Composite Exhibit 2, Testimony of Dahlem). At the hearing, Petitioner disputed the manner in which Respondent had computed the documentary stamp tax in that each assessment dealt with a husband and wife who held individual percentage interests in the net worth of the partnership. Respondent's computation did not take into consideration the double interest in each assessment. The parties therefore agreed that a recomputation would be made by Respondent and submitted as a late-filed exhibit. This was done and the new computation reflects a total tax liability, including surtax and penalty, in the total amount of $4,053.40 (Composite Exhibit 3).
Recommendation That Petitioner's request for relief from tax liability be denied, and that Petitioner's liability for documentary stamp tax, surtax, and penalties in the total amount of $4,053.40 be sustained. DONE and ORDERED this 26th day of May, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Tax Division, Northwood Mall Tallahassee, Florida 32303 Allan F. Meyer, Esquire Suite 1500 Post Office Box 14310 Ft. Lauderdale, Florida 33302 Zayle A. Bernstein, Esquire Post Office Box 14310 Fort Lauderdale, Florida 33302
The Issue By this petition, American Foam Rubber Distributors, Inc. (AFRD) and Edward Rothbard seek to have the Department of Revenue's assessment for documentary stamp tax and penalties on a transfer of real property by quit claim deed from Edward Rothbard to AFRD set aside. Petitioners contend that the transfer was without consideration and therefore nontaxable under sec. 201.02, F.S. , while Respondent contends that consideration flowed to the grantor by virtue of the grantee making the mortgage payments; and therefore, documentary tax stamps were due on the deed of conveyance computed on the amount of the mortgage at the time of transfer. One witness testified in behalf of Petitioners and four exhibits were admitted into evidence. From the pleadings, interrogatories and evidence presented at the hearing, the facts are largely undisputed and are as follows:
Findings Of Fact Edward Rothbard owns 100 percent of the outstanding stock of AFRD and he has been the sole shareholder and chief executive officer of the company since the company s inception in 1962. On March 9, 1973 the Seaboard Coastline Railroad (SCL) entered into an agreement with AFRD to sell a tract of land in Miami to the latter at an agreed price of $116,978.00 with certain conditions. The principal condition was that the grantee erect a warehouse on the property within one year from the date of the transfer. By deed dated August 23, 1973 the property was conveyed by SCL to Edward Rothbard rather than as per the contract. This deed was apparently delivered in late October, 1973 and the proper documentary stamp tax was paid on this transaction. Mr. Rothbard's testimony that the sole reason for taking the property in his name was to expedite the transaction was not rebutted. In exhibits 1 and 2 copies of letters from SCL dated September 21 and 26, 1973, SCL referred to Rothbard as nominee of AFRD to be grantee of the property. Exhibit 4, the title page of an interim title insurance binder, indicates that the title insurance policy on the property purchased from SCL was intended to be in the name of AFRD. In August, 1974 the building erected on the site for the use and benefit of AFRD was completed and Edward Rothbard mortgaged the property to secure a note in the amount of $550,000.00. His wife also executed the note and mortgage. AFRD occupied the building in September, 1975 and made all mortgage payments to the mortgagee including the first payment. By quitclaim deed executed February 26, 1975 Edward Rothbard conveyed the property here involved to AFRD subject to the mortgage. Minimum documentary tax stamps were placed on this deed. On February 26, 1975 the outstanding balance due on the mortgage was $543,969.59.
Findings Of Fact The facts in this case are undisputed. On April l6, 1976, petitioner Arthur J. Coyle and his wife Katie Coyle, became the sole shareholders of Sara- Wolf, Inc., a Florida Corporation, whose assets consisted of an apartment building in Miami Beach, Florida. Thereafter, the Coyles decided to transfer the corporate assets to themselves as individuals. They were advised by their attorney that, in view of the 1975 decision of the First District Court of Appeal in Florida Department of Revenue v. DeMaria, 321 So 2d 101 (Fla. 1st DCA 1975) in a similar factual situation, no state documentary stamp tax would be due on the transaction. Therefore, relying upon that judicial decision, petitioner and his wife proceeded to execute a quit claim deed of the corporate real estate to themselves on May 13, 1976, and file the same in the public records of Dade County, Florida, on May 18, 1976, with payment of only nominal documentary stamp tax. The decision of the District Court of Appeal had been stayed by the Supreme Court on December 8, 1975. Subsequent to the decision of the Supreme Court in the DeMaria case on October 14, 1976, which quashed the lower court's decision, respondent issued a notice of proposed assessment of documentary stamp tax in the amount of $526.50 based on a taxable consideration of $175,500, less 30 cents tax paid, for a total tax due of $526.20 plus a like amount as a penalty, and $42.00 in interest, for a total asserted liability of $1,094.40. (Testimony of petitioner, Exhibits 1-3)
Recommendation That the proposed assessment of $1,094.40 against petitioner Arthur J. Coyle and Katie Coyle is valid and should be enforced. DONE and ENTERED this 31st day of May, 1977 in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Robert A. Glassman, Esquire 903 Biscayne Building 19 West Flagler Street Miami, Florida 33130 Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
The Issue The issue in this proceeding is whether the Petitioners are entitled to refund of documentary stamp taxes paid pursuant to Sections 201.01 and 201.08 Florida Statutes.
Findings Of Fact Both Petitioners are limited partnerships validly existing and in good standing under the laws of the State of Florida. (Petitioner's exhibits No. 1 and No. 5.) Sugar Creek Business Center Phase I, Ltd. ("Sugar Creek") As to this Petitioner, the parties have further stipulated: On or about March 27, 1986, Petitioner and First Union National Bank, a national banking association, with its principal office located in Charlotte, North Carolina (the "Lender"), entered into a certain Construction Loan Agreement (the "Loan Agreement"). Pursuant to the Loan Agreement, Lender agreed to make and Petitioner agreed to accept a loan in the amount of $6,300,000.00 (the "Loan") to be used solely for the purpose of paying for the cost of developing and constructing a commercial building in Charlotte, Mecklenberg County, North Carolina. The Lender retained the law firm of Fowler, White, Gillen, Boggs, Villareal & Banker, P. A., Post Office Box 1438, 501 E Kennedy Boulevard, Suite 1700, Tampa, Florida 33602, as its Florida counsel in connection with closing the Loan. Petitioner retained the law firm of Peirsol, Boroughs, Grimm, Bennett & Griffin, Professional Association, Post Office Box 3309, Orlando, Florida 32802, as its counsel in connection with closing the Loan. On or about March 27, 1986, the General Partners of Petitioner executed a promissory note in the amount of $6,300,000.00 payable to Lender (the "Note"), a Deed of Trust and Security Agreement securing the Note in favor of Gibson L. Smith, Jr. Trustee, and First Union National Bank, Beneficiary (the "Mortgage"), and all other loan closing documents pursuant to the Loan Agreement. The Mortgage encumbers only land and the improvements thereon located in Charlotte, Mecklenberg County, North Carolina and was filed in the Public Records of Mecklenburg County, North Carolina on March 27, 1986, subsequent to closing upon the Loan Agreement. The proceeds of the Loan evidenced by the Note and secured by the Mortgage were used solely to develop and construct a commercial building upon the land encumbered by the Mortgage in Charlotte, Mecklenburg County, North Carolina. Florida documentary stamps were purchased from the area office of the Department of Revenue located in Tampa, Florida on May 1, 1986 and affixed to the Note to evidence payment of Florida documentary stamp tax with respect to the Note in the amount of $9,450.00 pursuant to Sections 201.00 and 201.08, Florida Statutes. (Petitioner's Exhibit No. 1) John Simpson, Jr., Esquire of Peirsol, Boroughs, Grimm, Bennett and Griffin, P. A. represented Sugar Creek in the purchase of property and the acquisition and closing of construction financing for improvements. The loan documents were mailed to him. He gave them to his client in Orlando, who signed and delivered them back to him in escrow. Simpson took the documents to Charlotte, North Carolina, for the closing on or around March 27, 1986. The purchase of property and loan closed simultaneously and the funds were disbursed in Charlotte. (Testimony of John Simpson, Jr., Esquire) One Dezavala Center, Ltd. As to this Petitioner, the parties have stipulated: On or about July 30, 1985, Petitioner and the First National Bank of Chicago, a national banking association, with its principal office located in Chicago, Illinois (the "Lender"), entered into a certain Construction Loan Agreement (the "Loan Agreement"). Pursuant to the Loan Agreement, Lender agreed to make and Petitioner agreed to accept a loan in the amount of $6,600,000.00 (the "Loan") to be used solely for the purpose of paying for the cost of developing and constructing four commercial buildings located in San Antonio, Bexar County, Texas. The Lender retained the law firm of Holland & Knight, 1200 Brickel Avenue, Post Office Box 015441, Miami, Florida 33101, as its Florida counsel in connection with closing the Loan. Petitioner retained the law firm of Peirsol, Boroughs, Grimm, Bennett & Griffin, Professional Association, Post Office Box 3309, Orlando, Florida 32802, as its counsel in connection with closing the Loan. On or about July 30, 1985, the General Partners of Petitioner executed a promissory note in the amount of $6,600,000.00 payable to Lender (the "Note"), a Deed of Trust, Mortgage, and Security Agreement securing the Note in favor of Harry M. Roberts, Jr., Esquire, Trustee (the "Mortgage"), and all other loan closing documents as required under the Loan Agreement. The Mortgage encumbers only land and the improvements thereon located in San Antonio, Bexar County, Texas and was filed in the Public Records of Bexar County, Texas on August 1, 1985, subsequent to closing upon the Loan Agreement. The proceeds of the Loan evidenced by the Note and secured by the Mortgage were used solely to develop and construct four commercial buildings on the land encumbered by the Mortgage in San Antonio, Bexar County, Texas. Florida documentary stamps were purchased from the area office of the Department of Revenue located in Miami, Florida on August 5, 1985, and affixed to the Note to evidence payment of Florida documentary stamp with respect to the Note in the amount of $9,900.00 pursuant to Sections 201.00 and 201.08 Florida Statutes. John Simpson, Jr., Esquire, also represented One Dezavala in the closing for the acquisition of the property and the loan. The note and other loan documents were signed in Orlando by Petitioner's General Partners. The documents were given to the lender's Florida Counsel in escrow, who sent the documents to the lender's Texas counsel. Closing on the acquisition of property and the loan took place simultaneously in San Antonio, Texas and the funds were disbursed in San Antonio. (Testimony of John Simpson, Jr., Esquire) Photocopies of the notes and stamps were admitted as Exhibits No. 3 and No. 7. The parties, by oral stipulation at the final hearing, agreed that before the Comptroller could be compelled to issue a Final Order authorizing the refund of such money as may properly be found owing Petitioners, Petitioners would make available to the Comptroller or his representatives, for inspection, cancellation and/or obliteration, the original documentary stamps forming the basis for the request for refund.
Findings Of Fact By warranty deed dated July 9, 1973, Floyd L. and Michael Lewis conveyed the fee simple title to certain realty in North Miami Beach to Petitioners Eugene J. Howard and Herbert Seidel. The purchase price for the property was $405,000. The property sold consisted of a twenty-two (22) unit apartment building with twenty (20) furnished apartments and included storage shed, a pool, patio and dock furniture. The closing statement signed by the sellers and purchasers stated: "Florida documentary stamps - on deed - $1,215.00, Florida documentary surtax - on deed - $132.20." $1,347.20 was credited to the Petitioners Howard and Seidel. Petitioners actually paid $10.85 surtax and $132.20 documentary tax. The 1974 tax assessment of the Dade County Property Appraiser for the property was $241,769.00 realty and $14,500.00 for the personalty. Petitioner contends: That part of the purchase price was applicable to -personal property. That the Hearing Officer should make an allocation of the realty included and an allocation for the personalty included. That the Petitioners believe they are entitled to the equitable defense of laches in that the Respondent did not advise Petitioners of the possible error of miscalculation until approximately two years had passed. That if the stamp tax is found to be due and if a penalty is included, the penalty is "excessive penalty" under the Eighth Amendment of the Constitution of the United States of America, and Article I, Section 17, of the Florida Constitution. Respondent contends: That there was an agreement between the Parties, in a signed document that $1,215 in documentary stamps and $132.20 in surtax stamps, reflecting the actual consideration paid for the realty under consideration, would be affixed to the conveyance. That Petitioners failed to fulfill such a an agreement and affixed $132.20 in documentary stamps and $10.85 in surtax stamps to the deed. . That the Department is entitled to the delinquent taxes plus penalty. That the assessment is dated July 9, 1975 and a three- year statute of limitations is applicable. The Hearing Officer further finds: The purchase price for the property under consideration was $405,000. Documentary stamps required on such a purchase were $1,215.; that stamps actually paid were in the amount of $132.20, that $10.85 was actually paid and still due and owing is $121.35. That the Petitioners as well as the Sellers were aware of the proper amount of tax due and signed a receipt reflecting the monies allocable for documentary and surtax stamps. That the Petitioners failed either intentionally or negligently to pay the proper amount of documentary and surtax stamps at the time of recording the deed.
Recommendation Assess the documentary stamps and the documentary surtax against Petitioners together with applicable penalties. DONE and ORDERED this 9th day of July, 1976, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Eugene J. Howard, Esquire 2212 Biscayne Blvd. Miami, Florida 33137 Harold F. X. Purnell, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304
Findings Of Fact Based upon the witnesses' testimony and the documentary evidence received herein, the following relevant facts are found. During December of 1977, an agreement was entered into between W. C. Brown and Tommy Bishop for the purchase/sale of 480 acres of land in Northeast Walton County for a total purchase price of $240,000. Pursuant to that agreement, Tommy Bishop agreed to assume $170,000 of a mortgage which was held by the Federal Land Bank Board and a note for $50,000 to W. C. Brown, payable in ten (10) annual installments plus a $20,000 cash payment upon receipt of which the purchaser, Tommy Bishop, could take possession of the parcel in question. (Petitioners' Composite Exhibit A). By warranty deed dated September 14, 1976, the subject parcel was transferred from the Browns to Tommy and Betty M. Bishop. (Respondent's Composite Exhibit A.) On or about March 16, 1977, Tommy Bishop and his wife transferred the subject parcel of land to his father, Leon F. Bishop, and his wife, Dorothy M. Bishop. A quit claim deed was executed and was recorded in the Official Records of Walton County at Book 119, page 181. (Respondent's Exhibit B.) It is this quit claim deed that is the focus of this Petition. Petitioner, Leon F. Bishop, contends that he purchased the subject tract of land from the Browns and gave it to his son as a means to encourage him to settle down and assist him in the farming and cattle operation, without success. Petitioner contends that he alone was principally obligated to make all the payments necessary to satisfy the obligation to the seller, and that at no point was his son, Tommy Bishop, ever obligated to make any payments on the obligation. Petitioner testified that he endorsed the notes and made all payments to the Federal Home Loan Bank Board and to the Bank of Florala, Alabama. Although it is true that the documents received evidence that the Petitioner satisfied the obligations necessary to consummate the purchase of the subject parcel of land, until the quit claim deed executed on March 16, 1977, was entered into between his son and himself, the son was equally obligated to satisfy the obligations. Hover, once the quit claim deed was executed, there was a shift in the economic burden and, as such, a taxable transfer occurred on the quit claim deed, creating a documentary tax obligation authorized pursuant to Section 201.02, Florida Statutes. Also, see Rule 12A-4.12(2), Florida Administrative Code.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED: That the Department of Revenue's proposed assessment filed herein be upheld. ENTERED this 26th day of October, 1979, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Gillis E. Powell, Esquire John D. Moriarty, Esquire Post Office Box 277 Department of Revenue Crestview, Florida 32536 Room 103, Carlton Building Tallahassee, Florida 32301 Barbara Staros Harmon, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301
