142.050 Real estate transfer tax -- Collection on recording -- Exemptions

142.050 Real estate transfer tax -- Collection on recording -- Exemptions.

(1) As used in this section, unless the context otherwise requires:

(a) "Deed" means any document, instrument, or writing other than a will and

other than a lease or easement, regardless of where made, executed, or

delivered, by which any real property in Kentucky, or any interest therein, is

conveyed, vested, granted, bargained, sold, transferred, or assigned.

(b) "Value" means:

1. In the case of any deed not a gift, the amount of the full actual

consideration therefor, paid or to be paid, including the amount of any

lien or liens thereon; and

2. In the case of a gift, or any deed with nominal consideration or without

stated consideration, the estimated price the property would bring in an

open market and under the then prevailing market conditions in a sale

between a willing seller and a willing buyer, both conversant with the

property and with prevailing general price levels.

(2) A tax upon the grantor named in the deed shall be imposed at the rate of fifty cents

($0.50) for each $500 of value or fraction thereof, which value is declared in the

deed upon the privilege of transferring title to real property.

(3) (a) If any deed evidencing a transfer of title subject to the tax herein imposed is

offered for recordation, the county clerk shall ascertain and compute the

amount of the tax due thereon and shall collect the amount as prerequisite to

acceptance of the deed for recordation.

(b) The amount of tax shall be computed on the basis of the value of the

transferred property as set forth in the deed.

(c) The tax required to be levied by this section shall be collected only once on

each transaction and in the county in which the deed is required to be recorded

by KRS 382.110(1).

(4) The county clerk shall collect the amount due and certify the date of payment and

the amount of collection on the deed. The county clerk shall retain five percent (5%)

as his fee for collection and remit the balance every three (3) months to the county

treasurer, who shall deposit the money in the county general fund.

(5) The Department of Revenue may prescribe regulations necessary to carry out the

purposes of this section.

(6) Any county clerk who willfully shall record any deed upon which a tax is imposed

by this section without collecting the proper amount of tax and certifying the date

and amount of collection on the deed as required by this section based on the

declared value indicated in the affidavit appended to the deed shall, upon

conviction, be fined $50 for each offense.

(7) The tax imposed by this section shall not apply to a transfer of title:

(a) Recorded prior to March 27, 1968;

(b) To, in the event of a deed of gift or deed with nominal consideration, or from

the United States of America, this state, any city or county within this state, or

any instrumentality, agency, or subdivision hereof;

(c) Solely in order to provide or release security for a debt or obligation;

(d) Which confirms or corrects a deed previously recorded;

(e) Between husband and wife, or between former spouses as part of a divorce

proceeding;

(f) On sale for delinquent taxes or assessments;

(g) On partition;

(h) Pursuant to:

1. Merger or consolidation between and among corporations, partnerships,

limited partnerships, or limited liability companies; or

2. Any conversion of a partnership, limited partnership, corporation, or

limited liability company into a partnership, limited partnership,

corporation, or limited liability company;

(i) Between a subsidiary corporation and its parent corporation for no

consideration, nominal consideration, or in sole consideration of the

cancellation or surrender of either corporation's stock;

(j) 1. Under a foreclosure proceeding; or

2. Pursuant to a voluntary surrender under a mortgage in lieu of a

foreclosure proceeding;

imited partnership,

corporation, or limited liability company;

(i) Between a subsidiary corporation and its parent corporation for no

consideration, nominal consideration, or in sole consideration of the

cancellation or surrender of either corporation's stock;

(j) 1. Under a foreclosure proceeding; or

2. Pursuant to a voluntary surrender under a mortgage in lieu of a

foreclosure proceeding;

(k) Between a person and a corporation, partnership, limited partnership or

limited liability company in an amount equal to the portion of the value of the

real property transferred that represents the proportionate interest of the

transferor of the property in the entity to which the property was transferred, if

the transfer was for nominal consideration;

(l) Between parent and child or grandparent and grandchild, with only nominal

consideration therefor;

(m) By a corporation, partnership, limited partnership, or limited liability company

to a person as owner or shareholder of the entity, upon dissolution of the

entity, in an amount equal to the portion of the value of the real property

transferred that represents the proportionate interest of the person to whom the

property was transferred, if the transfer was for nominal consideration;

(n) Between a trustee and a successor trustee; and

(o) Between a limited liability company and any of its members.

(8) The tax imposed by subsection (2) of this section shall not apply to transfers to a

trustee, to be held in trust, or from a trustee to a beneficiary of the trust if:

(a) The grantor is the sole beneficiary of the trust;

(b) The grantor is a beneficiary of the trust and a direct transfer from the grantor

of the trust to all other individual beneficiaries of the trust would have

qualified for an exemption from the tax pursuant to one (1) of the provisions

of subsection (7) of this section; or

(c) A direct transfer from the grantor of the trust to all other individual

beneficiaries of the trust would have qualified for an exemption from the tax

pursuant to one (1) of the provisions of subsection (7) of this section.

(9) As used in this section, "trust" shall have the same definition as contained in KRS

386B.1-010.