Payment of Doc Stamps on SHORT SALES

By
Real Estate Broker/Owner with Keller Williams Town & Country

IMPORTANT INFORMATION FOR ANYONE INVOLVED IN

--PLEASE READ IMMEDIATELY--

AS THIS AFFECTS YOUR CURRENT SHORT SALE TRANSACTION

PAYMENT OF DOC STAMPS ON SHORT SALES

 Directive from Florida Department of Revenue

The Florida Department of Revenue (FDOR) has recently issued clarification on how documentary stamp tax on Short Sale Real Estate transactions will be calculated.

FDOR has declared that real property documentary stamp tax is due on the sale price plus any forgiven debt.

          Example:

Current mortgage balance is $200,000; real property is sold $150,000; Bank forgives debt of $50,000. Total consideration for the transfer of the real property is $200,000. Upon which, documentary stamp tax is calculated.

I have attached the following documents to help everyone involved in a short sale process to better understand FDORs requirements and to assist in the process of obtaining from the lender the amount of forgiven debt:

  • ASSIGNMENT OF INTEREST -- Authorization to refund any overpayment of doc stamps to the lender -- Present to the seller(s) for signature and date.
  • DOC STAMP LETTER TO MORTGAGE COMPANY -- Notification to Seller's mortgage holder that payoff will be decreased by the amount of doc stamps owed, and request for confirmation of seller's payoff.
  • DOR LETTER DOC STAMPS SHORT SALES -- To be sent to seller's mortgage company as an attachment to the Doc Stamp letter to Mortgage Company (explanation)

If you are currently working towards closing a short sale transaction, please address this with the title company and lender right away.

 

Comments (1)

Mott Marvin Kornicki
Waterway Realtors® • Notary Public & Apostille - Sunny Isles, FL
Miami Notary & Apostille 786-229-7999

I was wondering when and if the State of Florida would address that issue. Next, the tax rate will be adjusted in a similar way.

Aug 29, 2008 02:06 AM