Preview:

IN THE COMMONWEALTH COURT OF PENNSYLVANIA John C. Gudzan, Petitioner v. Commonwealth of Pennsylvania, Respondent : : : : : : :

No. 731 F.R. 2006 Submitted: October 31, 2008

BEFORE:

HONORABLE BERNARD L. McGINLEY, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE JAMES R. KELLEY, Senior Judge FILED: December 18, 2008

OPINION BY SENIOR JUDGE KELLEY

John C. Gudzan petitions for review of an order of the Board of Finance and Revenue (Board) sustaining the assessment against him by the Department of Revenue (Department) for the realty transfer tax in the amount of $2,511.33, with interest in the amount of $21.33, on transferred property valued at $251,231.50. We affirm. The relevant facts in this matter, as stipulated by the parties, are as follows.1 Gudzan is an individual residing in Conway, Pennsylvania. After

Gudzan and his wife divorced on or about September 28, 2004, Gudzan agreed to
Pursuant to Pa.R.A.P. 1571(f), no record is certified to this Court by the Board. After the filing of the petition of review, the parties shall take appropriate steps to prepare and file a stipulation of such facts as may be agreed to and to identify the issues of fact, if any, which remain to be tried. Pa.R.A.P. 1571(f). In reviewing a determination of the Board, "[t]he facts stipulated by the parties on appeal are binding and conclusive and should be regarded as this Court's findings of fact." Philadelphia Gas Works v. Commonwealth, 741 A.2d 841, 843 n.2 (Pa. Cmwlth. 1999).
1

purchase from his former spouse her interest in 12 parcels of rental real estate located in Beaver County, Pennsylvania, which they jointly owned. On or about May 11, 2005, a deed evidencing the transfer of realty from Gudzan and his former spouse, as husband and wife, to Gudzan, an individual, was recorded by the Beaver County Recorder of Deeds. Since this transfer was exempt under Pennsylvania law as a transfer between persons who were previously husband and wife, no realty transfer tax was assessed on the transfer. On or about March 16, 2005, Gudzan created The California Avenue Land Trust. On or about May 19, 2005, a deed evidencing the transfer of the

realty (described as parcel 8 in the joint deed) from Gudzan to The California Avenue Land Trust was recorded by the Beaver County Recorder of Deeds. Pennsylvania realty transfer tax was not paid on this transfer. On the Realty Transfer Tax Statement of Value form filed with the Department with respect to this transfer, Gudzan's representative claimed an exemption from the tax by checking the following box on the form: "Transfer to a trust." On or about July 5, 2005, the Department issued a Pennsylvania Realty Transfer Tax Notice of Assessment (Notice of Assessment) to Gudzan relating to the transfer of realty from him to The California Avenue Land Trust. The Notice of Assessment provided that the transfer of realty from Gudzan to The California Avenue Land Trust was subject to the following tax: $2,511.33 in Pennsylvania realty transfer tax and $21.33 in interest accrued from May 19, 2005 through and including July 20, 2005, for a total of $2,532.66. The Notice of Assessment also provided that the Department had disallowed Gudzan's claimed exemption. Gudzan timely filed a petition with the Board of Appeals, Pennsylvania Department of Revenue, on or about October 3, 2005. The petition 2.

challenged the Department's July 5, 2005 assessment of $2,511.33 in Pennsylvania realty transfer tax plus applicable interest. On or about April 16, 2006, the Board of Appeals issued a decision and order sustaining the realty transfer tax deficiency. On or about July 10, 2006, Gudzan filed a petition with the Board. On or about November 17, 2006, the Board issued an order upholding the decision of the Board of Appeals and sustaining the assessment of the realty transfer tax. Therein, the Board concluded that Gudzan had failed to demonstrate The California Avenue Land Trust was an "ordinary" or "living" trust thereby entitling the transfer to an exclusion from the imposition of the realty transfer tax pursuant to the Realty Transfer Tax Act (Act).2 Consequently, the Board concluded that the transfer of the property to the trust was properly subject to the realty transfer tax. On or about December 18, 2006, Gudzan filed a petition of review with this Court seeking a review of the Board's order.3 Herein, Gudzan raises the following issues for our review: (1)

Whether the Board erred in sustaining the order of the Board of Appeals and determination of the Department that realty transfer tax was due because the deed from Gudzan to The California Avenue Land Trust does not effect a real transfer of interest in property to someone other than the grantor of said trust; (2) Whether the Board erred in sustaining the order of the Board of Appeals and determination of the Department that realty transfer tax was due because The California Avenue Land Trust is not an ordinary trust exempt from the tax; and (3) Whether the Board
Act of March 4, 1971, P.L. 6, as amended, added by the Act of May 5, 1981, P.L. 36, as amended, 72 P.S.

Download 731fr06-12-18-08.pdf

Pennsylvania Law