Does the fact that the two transfers constitute an overall agreement between the parties affect the tax consequences?
We answer the first and third questions in the negative and the second in the affirmative. [[Orig. Op. Page 2]] ANALYSIS It appears from the facts as set forth in your letter that a mortgagor, being in arrears and unable to make his mortgage payments, deeded the mortgaged property to the mortgagee. The indebtedness was thereupon cancelled and the mortgage satisfied. Immediately, a contract of sale was executed with the mortgagee as vendor and the mortgagor as vendee. The amount to be paid by the vendee consists of the unpaid balance of mortgage principal, accrued and delinquent interest to date of contract, taxes, insurance, recording fee and cost of title policy insuring title of the vendor. 1. We agree with your conclusion that the transfer by deed from the mortgagor to the mortgagee in lieu of foreclosure is not subject to the real estate excise tax under the provisions of RCW 28.45.010 which expressly exempts transfers for such purposes. 2. The subsequent sale on contract to the fo
