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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
S
495.0000 Sale
Annotation 495.0476
(a) In General—Definition
495.0476 Transfer of Boat Due to Bankruptcy Abandonment/Divorce. A boat is registered in the names of four partners, two married couples. Couple A declares bankruptcy. The court relieves them of their share of the debt remaining on the boat, and they abandon their interest in the boat. Couple B becomes the owner of the boat and the parties responsible for the entire remaining debt. Inasmuch as Couple A's relief from debt occurred by operation of law, there was no consideration for the transfer of the boat to Couple B and, therefore, no purchase occurred. Subsequently, Couple B divorced with the court awarding the equity and liability relating to the boat to the husband. Here again, the transfer is by operation of law rather than by passage of consideration in any form and no purchase resulted. 8/28/91.