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#531407 - 04/13/06 01:05 PM Documentary Stamps issue
Rather be in Vegas Offline
100 Club
Joined: Oct 2005
Posts: 248
Florida
A Promissory Note for a line of credit subject to Doc. Stamps was executed by borrower and delivered to the Bank outside Florida territorial waters to avoid the taxes. IF an increase was provided and not signed in the same matter as when firt issued, but rather in Florida. Do I have our borrower pay doc stamps on the entire amount or just the increase portion?
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MAGG17

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#531408 - 04/17/06 06:17 PM Re: Documentary Stamps issue
Georgia Golfer Offline
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Georgia Golfer
Joined: Jun 2003
Posts: 415
1st Tee
just my opinion, but I would think that the doc stamps only apply to the increase. The original line was exempt from doc stamps due to the way it closed, that's not going to change after the fact...right?

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#531409 - 04/19/06 07:38 PM Re: Documentary Stamps issue
MagicCity Offline

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MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
Is going offshore to avoid Doc stamps a common practise?
Approx. how much does the person save?
- vs. what they spend in gas for the boat?

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#531410 - 04/19/06 09:00 PM Re: Documentary Stamps issue
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,292
I had checked into this and meant to respond previously but forgot! Based on something I read on the Florida state site, I think you had best get some official guidance on this questios. The state may very well want to full tax (which has now been capped at $2,450.)

"Mortgages, Liens, and Other Evidences of Indebtedness

Documentary stamp tax is due on a mortgage, lien, or other evidence of indebtedness filed or recorded in Florida. The tax rate is $.35 per $100 (or portion thereof) and is based on the amount of the indebtedness or obligation secured, even if the indebtedness is contingent. When a mortgage, lien, or other evidence of indebtedness is given to secure a previously unsecured indebtedness or obligation upon which the maximum tax of $2,450 was paid, tax is due on the full amount of the indebtedness or obligation secured, minus the $2,450 already paid."

Apparently the old documentary stamps were quite onerous, making trips offshore wellworth while in the case of sizeable loans. One example said that the stamps on a $25,000,000 loan would have cost $85,000! It was cheaper to hire a boat and captain and head out to sea.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#531411 - 04/20/06 05:11 PM Re: Documentary Stamps issue
MagicCity Offline

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MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
Thanks,and thanks for the link.

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#531412 - 04/20/06 09:58 PM Re: Documentary Stamps issue
ToTo Offline
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Joined: Apr 2004
Posts: 595
OZ
FWIW, I'm just going to add my two bits. I think if the renewal was done within the state of Florida, you have to pay the stamp tax. I believe that if you want to avoid the tax, each time you renew, you need to execute and deliver the note outside the state of Florida.

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