Deed Tax Bankruptcy
Chapter 11 and 12- Exemption Under Federal Law
The U.S. Congress has provided a special tax provision exempting deeds executed as part of a plan of reorganization under Chapter 11 and Chapter 12 bankruptcy cases. For more information on federal Bankruptcy Code see United States Code.
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Chapter 11, According to Section 1146 (a) of the federal Bankruptcy Code:
“The issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under a plan confirmed under Section 1129 of this title, may not be taxed under any law imposing a stamp tax or similar tax.”
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Chapter 12, According to section 1231 (a ) of the federal Bankruptcy Code:
“The issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under a plan confirmed under Section 1225 of this title, may not be taxed under any law imposing a stamp tax or similar tax.”
Deeds from Chapter 7, 9, and 13 Bankruptcy - Taxable
Deed tax is due on the execution of a deed conveying legal ownership of real property from a bankruptcy estate in connection with the following bankruptcy cases:
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Chapter 7 (liquidation)
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Chapter 9 (municipal reorganization)
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Chapter 13 (individual repayment plan)
