An exchange is the act of trading one parcel of real property owned exclusively by one party for another parcel of real property owned exclusively by another party.
Under the Deed Tax law, an exchange has been historically handled as if it were two separate transactions. Each party, functioning as a grantor, conveys legal ownership of his or her real property to the other party with a deed. Therefore, each party, functioning as a grantor, is responsible for paying tax on the transfer document.
For this type of exchange |
The basis for tax is |
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Property only |
Fair market value of the real property given |
Property plus cash consideration |
Fair market value of the real property given, plus cash consideration |