TAX NEWS - 2010

Florida Documentary Stamp Tax - Short Sales

Documentary stamp tax is due on any document that transfers an interest in Florida real property. The tax is based on the consideration paid or given for the property interest transferred.

Consideration for a document that transfers an interest in Florida real property under a short sale does not include the amount of an indebtedness forgiven or released by a mortgagee holding a mortgage on the grantor's interest in the property.

A short sale is defined as a purchase and sale of real property in which all the following apply:

- The grantor's interest is encumbered by a mortgage or mortgages securing indebtedness in an aggregate amount greater than the purchase price paid by the grantee.
- A mortgagee releases the real property from the mortgage in exchange for a payment of less than the outstanding mortgage balance.
- The releasing mortgagee does not receive, directly or indirectly, any interest in the real property.
- The releasing mortgagee is not controlled by or related to the grantor or the grantee.