Nev. Admin. Code § 375.150 — 375.150

NAC 375.150    Examples of methods of determining value or tax base. ( NRS 360.090 , 375.015 , 375.030 )    The
following examples are given to illustrate methods of determining value or the
tax base on which to compute any tax imposed by chapter 375 of NRS:
1.  “A,” the owner of a residence, sold the
residence for $250,000. The tax is based on $250,000, the amount paid for the
property.
2.  “A,” the owner of certain real estate,
sold it to “B” for $144,000. “B” paid the amount of $25,000 in cash, leaving a
balance of $119,000, and “A” gave “B” a deed to the property. The tax is
computed on $144,000, the amount paid or to be paid.
3.  The holder of a trust deed in the amount
of $120,000 foreclosed upon the property securing the deed. At the foreclosure
sale, because of taxes and additional expenses incurred, the trustee bid
$122,500, and a trustee’s deed was issued to the beneficiary. The beneficiary
then accepted a mortgage in the amount of $125,000 as consideration for the
retransfer of the property to the former owner. The tax on the trustee’s deed
should be computed on the amount bid for the property plus any costs, in this
example $122,500. The deed from the beneficiary to the former owner of the
property is a conveyance of realty sold, and the tax should be computed upon
the amount paid, namely $125,000.
4.  For a full purchase price of $500,000,
“A” conveys to “B” land on which there is an encumbrance of $410,000 at the
time of sale. “A” signs a contract agreeing to pay off the encumbrance at a
later date. The deed of conveyance from “A” to “B” is subject to tax on the
full purchase price of $500,000. The fact that the seller retained a
contractual obligation on the property does not diminish the amount that “B”
will pay, $500,000.
5.  “A,” the owner of certain real estate,
sold it to “B” for a consideration of $240,000. “B” paid the amount of $125,000
in cash, leaving a balance due of $115,000. “A” accepted bonds of the Home
Owners’ Loan Corporation for the balance of $115,000 and gave “B” a deed to the
property. The tax is based on the total purchase price of $240,000, the
$125,000 in cash and the $115,000 value of the bonds.
6.  Two corporations that do not have
identical ownership exchange properties worth $450,000 each. Each transfer is
taxable on the $450,000 value. Each corporation is receiving something of value
in exchange for the property it is transferring.
7.  To qualify for a loan to refinance their
home, a married couple adds the husband’s parents to the title, with the
married couple and the husband’s parents all as joint tenants. The value of the
property is $145,000. Because the transfer to the husband’s parents from the
wife is not exempt from the tax and the joint tenants each have a right to the
whole property, the transfer is taxable on the $145,000 value.
8.  A couple buys a home from the Veteran’s
Administration for $97,142.36. The transfer is taxable on the amount of
purchase, $97,142.36.
9.  A university foundation receives property
valued at $1,000,000. The transfer is exempt from taxation pursuant to subsection
15 of NRS 375.090 . The
university foundation sells the property to another party in a transaction that
is not exempt pursuant to NRS
375.090 for $750,000. The second transfer is taxable on the amount of
purchase, $750,000.
10.  A corporation owns property valued at
$180,000. To refinance the property, the corporation transfers the property to
one of its shareholders pursuant to the requirements of the lender. The
transfer is taxable on the value of the property, $180,000.
11.  “A” owns property worth $50,000. “B”
owns property worth $75,000. “A” and “B” form a limited-liability company and
are the only two members. “A” and “B” transfer their properties to the
limited-liability company. Each transfer is taxable for the value of the
properties, $50,000 and $75,000, respectively.
12.  “A” and “B,” who are not married and not
related within the first degree of consanguinity, own two identical properties,
each worth $50,000, as joint tenants. “A” and “B” wish to transfer their interest
in each property to the other so that “A” owns one property as the sole owner
and “B” owns the other property as the sole owner. Because “A” and “B” are
giving up their respective rights in the other parcel, the transfers are made
with consideration and thus each transfer is taxable for the $50,000 value. If
“A” and “B” held title to each property in 50 percent fractional interests,
each transfer would be taxable for $25,000.
13.  “A” and “B” are joint tenants of a
10-acre parcel that is worth $150,000. “A” and “B” are not married and are not
related within the first degree of consanguinity. They wish to partition the
property with each receiving a 5-acre parcel in his own name. The transfer of
each 5-acre parcel is taxable at a $75,000 value. If they each owned a 50
percent fractional interest in the parcel, the transfer of each 5-acre parcel
would be exempt from taxation, but if 6 acres were transferred to “A” and 4
acres were transferred to “B,” the transfer to “A” would be taxed on the value
of 1 acre, $15,000.
14.  A partnership owns real property worth
$100,000. There is a mortgage on the property, and the partnership wishes to
refinance the mortgage. As a condition of refinancing, the lender requires the
property to be held in title by only one partner. The transfer from the
partnership to the single partner is taxable on the entire $100,000 value. Once
the refinancing is complete, any transfer of title back to the partnership is
also taxable on the entire $100,000 value.
15.  “A” and “B” own adjoining lots. “A” agrees
to buy part of “B’s” lot for $1,500,000. To expedite the mapping requirements,
“B” transfers 100 percent of his lot to “A,” but retains a contractual
obligation from “A” that after all mapping and adjustments to the legal
description of the lot are complete, “A” will transfer back to “B” the property
outside the purchased area. The first transfer is taxable on the $1,500,000
amount. Because the second transfer is made without stated consideration, the
transfer back to “B” of the excess area is taxable based on the fair market
value of that area.
[Tax Comm’n, Real Property Transfer Tax Ruling No. 2,
eff. 1-1-68]—(A by R181-01, 5-13-2002; A by Dep’t of Taxation by R224-03, 4-30-2004)