Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article IV - County Collections › Chapter 91 - REALTY TRANSFER TAX › Subchapter E - GENERAL › Section 91.101 - Definitions

Current through Register Vol. 54, No. 28, July 13, 2024
The following words and terms, when used in this
						  chapter, have the following meanings:
Association
-
(i) An unincorporated enterprise owned or
						conducted by two or more persons, including, but not limited to, a partnership,
						limited partnership, limited liability partnership or restricted professional
						company that is deemed to be a limited partnership under
						15 Pa.C.S. §
													8997
						(relating to taxation of restricted professional companies) or joint
						venture.
(ii) The term does not
						include an ordinary or living trust, limited liability company, decedent's
						estate, tenancy in common, tenancy by the entireties or joint
						tenancy.
Child
-A son or daughter by either
						  natural birth or adoption. The term does not include:
(i) A stepson or stepdaughter.
(ii) A son or daughter of an individual whose
						parental rights have been terminated.
Conservancy
-An entity which possesses
						  a tax exempt status under section 501(c)(3) of the Internal Revenue Code
						  (26 U.S.C.A. §
													501(c)(3)) and which has as
						  its primary purpose, the preservation of land for historic, recreational,
						  scenic, agricultural or open space opportunities.
Conversion
-A change of an
						  entity's:
(i) Form of
						organization.
(ii) Place of
						organization.
(iii) Name or
						identity.
Corporation
-A corporation, joint-stock
						  association, limited liability company, business trust or banking institution
						  which is organized under the laws of the Commonwealth, the United States or any
						  other state, territory or foreign country or dependency.
Debt
-A legally enforceable obligation
						  arising out of a genuine debtor-creditor relationship to pay a fixed or
						  determinable sum of money at a future date.
Document
-A deed, quitclaim deed,
						  ground rent, lease, occupancy agreement, contract or other writing evidencing
						  an interest in realty other than:
(i)
						A will.
(ii) A conventional
						mortgage or assignment, extension, release or satisfaction thereof.
(iii) A contract for a deed or agreement of
						sale for the sale of realty whereby the legal title does not pass to the
						grantee until the total consideration specified in the contract or agreement
						has been paid, and the consideration is payable over a period of time not
						exceeding 30 years.
(iv) An
						instrument which solely grants, vests or confirms a public utility
						easement.
Entity
-An association or
						  corporation.
Family farm realty
-One of the
						  following:
(i) Realty devoted to the
						business of agriculture which was transferred without tax to a family farm
						corporation by document accepted after July 1, 1986, or recorded after July 31,
						1986, by a member of the same family which directly owns at least 75% of each
						class of the stock of that family farm corporation.
(ii) Realty which was transferred to a family
						farm corporation without tax after February 15, 1986, under a document accepted
						prior to July 2, 1986, and recorded prior to August 1, 1986, by a sole
						proprietor family member.
Financing transaction
-An arrangement
						  in which the following apply:
(i)
						Realty is transferred by the debtor solely for the purpose of serving as
						security for the payment of a debt.
(ii) No sale or gift is intended.
(iii) The debtor retains possession and
						beneficial ownership of the real estate transferred before default.
(iv) The transferee obtains title or
						ownership to the real estate only so far as is necessary to render the
						instrument of transfer effective as security for the debt.
(v) The transferee or the transferee's
						successor is obligated to return the transferred real estate at no or only
						nominal consideration to the debtor upon payment of the debt before
						default.
Living trust
-An ordinary trust:
(i) Which, throughout the settlor's lifetime,
						is wholly revocable by the settlor without the consent of an adverse
						party.
(ii) Which vests no present
						interest in any of the trust corpus or income in any person other than the
						settlor or trustee until the settlor dies.
(iii) All the corpus and income of which can
						be reached or materially affected by the settlor without revocation of the
						trust or the consent of an adverse party.
(iv) From which no transfer of corpus or
						income may be made by the trustee at any time prior to the death of the settlor
						to any person in the capacity of a beneficiary other than the
						settlor.
(v) Under which the
						trustee exercises no discretion as to the disposition of the trust corpus or
						income during the settlor's lifetime to any person other than the settlor
						without the express direction of the settlor to make the specific
						disposition.
(vi) Which the trustee
						or, if the settlor was the trustee, the successor trustee is required under the
						governing instrument to distribute the corpus and retained income upon the
						death of the settlor.
Example 1.
If a trust agreement
						  provides that the income of the trust is distributable one-half to the settlor
						  and one-half to another person, at least annually, the trust is not a living
						  trust because income of the trust is required to be transferred to someone
						  other than the settlor in the capacity as a beneficiary during the settlor's
						  lifetime.
Example 2.
If a trust agreement
						  provides that during the settlor's lifetime, the trustee may in the trustee's
						  sole and absolute discretion, make distributions to members of the settlor's
						  family (or other persons), the trust does not qualify as a living trust because
						  someone other than the settlor can receive trust corpus or income without the
						  settlor's consent prior to the settlor's death.
Example 3.
If a trust agreement
						  provides that during the settlor's lifetime, the trustee, solely at the
						  direction of the settlor, may transfer trust corpus or income to a person other
						  than the settlor, the provision will not in itself disqualify the trust as a
						  living trust. Because the trustee has the authority to distribute trust corpus
						  or income to someone other than the settlor only at the settlor's direction,
						  effectively the settlor is making the transfer. Thus, the settlor is the party
						  who is reaching and materially affecting the trust corpus or income. Further,
						  the transfer is not made to the other person in the capacity as a trust
						  beneficiary.
Ordinary trust
-
(i) A private trust which takes effect during
						the lifetime of the settlor of the trust and for which the trustees of the
						trust take title to property primarily for the purpose of protecting, managing
						or conserving trust assets, under the ordinary rules applied in the orphan's
						court division of the court of common pleas or in other chancery or probate
						courts, until distribution to the beneficiaries of the trust.
(ii) The term does not include:
(A) Business trusts organized under
						Pennsylvania law or the law of any state or foreign jurisdiction, or any form
						of trust that has either of the following features:
(I) The treatment of beneficiaries as
						associates.
(II) Beneficial
						interests in the trust estate or profits that are evidenced by transferable
						shares, similar to corporate shares, or are otherwise treated as personal
						property.