Bar News - December 17, 2014
Real Estate Transfer Tax Forms Change in 2015
By: Tina Annis and Tim Boucher
On Nov. 20, a group of practitioners from the real property, tax, and estate planning sections of the NH Bar Association met informally with staff of the NH Department of Revenue (DRA) to discuss the new real estate transfer tax forms (Real Estate Tax Declaration of Consideration Form CD-57 and Inventory of Property Transfer Form PA-34).
Although the old versions of the forms are currently being accepted, beginning Jan. 1, taxpayers must report any real estate transfers on the updated versions of the forms.
The new forms can be found in “pdf” format on the department’s recently redesigned website (www.revenue.nh.gov). The forms include a bar code, which is scanned by the department into its computer system when filed. Although information can be entered onto the forms electronically, it is also acceptable to hand-write some or all of the required information, according to department staff.
The DRA is working on an electronic filing system for the future, which will allow taxpayers and practitioners to prepare and file the real estate transfer tax returns entirely online. The e-file system is expected to be voluntary, not mandatory.
One of the recent changes to the forms is a requirement that the private information of buyers and sellers to a transaction be reported separately. There is a Form CD-57-P for “purchasers” and a Form CD-57-S for “sellers.” The information on the two forms is identical, and there is significant overlap with the Form PA-34.
Practitioners at the meeting with DRA officials expressed concern about the redundancy of the questions and the increased time and expense of completing multiple forms. Once e-file is in place, the questions will only have to be answered once, officials said. In the meantime, the department will provide a single pdf form on its website that will contain all three transfer tax forms. It will be designed so that the common information will flow simultaneously to all forms. The new pdf should be available on the website soon, according to DRA officials. The department will also maintain the three forms as separate pdfs for those who need them separately.
Separate forms for buyer and seller are being used to protect the private information for parties to a transaction. This includes the addresses of the parties and, perhaps most importantly, social security numbers. Practitioners raised the question about the department’s new requirement of social security numbers on the forms. DRA officials reminded practitioners that the form is first and foremost a tax return.
Some practitioners have historically filed the forms without including social security numbers, but the department will no longer accept forms without this information.
The new Form CD-57 includes a section for the preparer to provide his or her information. Prior versions of the form included the preparer’s tax identification number, which has been removed from the forms.
There was a discussion about the possibility of a simplified form for non-contractual transfers, which are exempt from the transfer tax, or for transfers to revocable trusts, which under the Revenue Rules are treated differently and usually only pay minimum tax. DRA officials said they would look into that possibility. In addition, the DRA is considering adding an addendum to the forms to address cases in which there are multiple buyers and sellers.
The DRA officials made clear to the group that the new forms are being reviewed and scanned. Incomplete forms are being set aside and will likely be returned to the appropriate party.
Many real estate practitioners use real estate closing software that merges various transfer tax forms. Previous versions of the CD-57 and PA-34 were integrated into these systems. The DRA plans to work with real estate software vendors to integrate the new forms within the software programs.
Practitioners are encouraged to subscribe to the department’s “e-news,” via the department website, www.revenue.nh.gov, to receive automatic notifications about new forms and other updates.