Use of a single deed, rather than two, to complete relocation home sale transactions has long been standard practice in the relocation industry. Doing so facilitates efficient completion of two-sale transactions, saves clients a set of document costs, and often saves money on transfer taxes or recording fees.
In such transactions, the employer or relocation management company (RMC) obtains a deed from the selling employee that is completed except for the name of the person to whom the property is being transferred (a “blank deed”). When it sells the property, the employer or RMC adds the name of the eventual buyer to the deed, and it is recorded.
The Internal Revenue Service has accepted the blank deed as consistent with favorable tax treatment of properly structured home sale programs. However, there are a number of issues that arise in various states that prompt many employers or RMCs to use two deeds in those jurisdictions. This subject has been covered extensively in the Worldwide ERC® MasterSource Tax & Legal Library for many years under the article heading “Blank Deed: State Issues and Rev. Rul. 2005-74.”
Recently, however, the Worldwide ERC® Real Estate & Mortgage Forum, and the Worldwide ERC® Tax Forum, undertook to take a new look at state-by-state factors that are relevant in considering whether to use one deed or two in each state, and to reduce that research to an easily-used chart. The chart, which also contains citations to the relevant laws in each state, can be accessed here: State by State Blank Deed.
The chart is a useful reference tool in considering whether to use one deed or two in particular states.
As always, you should consult with your own tax and legal advisors in making decisions on this issue. For more information click on www.erc.org