Documentary Stamp Tax – Family Corporation, Partnership, and

96-333-2020 Rev. 3-2021

Guidance Bulletin

revenue.nebraska.gov/PAD, or 402-471-5984

Nebraska Department of Revenue

Property Assessment Division, PO Box 98919, Lincoln, Nebraska 68509-8919

March 2021

Documentary Stamp Tax – Family Corporation,

Partnership, and Limited Liability Company Exemption

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR)

until amended. A guidance document does not include internal procedural documents that only aect the

internal operations of DOR and does not impose additional requirements or penalties on regulated parties

or include condential information or rules and regulations made in accordance with the Administrative

Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on

regulated parties, you may request a review of the document.

This guidance document may change with updated information or added examples. DOR recommends you

do not print this document. Instead, sign up for the subscription service at revenue.nebraska.gov to get

updates on your topics of interest.

Pursuant to Neb. Rev. Stat. § 76-214, every grantee that intends to have a deed to real estate recorded and every

purchaser of real estate who wishes to record a memorandum of contract or land contract must le a completed

Real Estate Transfer Statement, Form 521, at the time such deed or document is presented for recording with

the county register of deeds. If the grantee or purchaser fails to furnish a completed Form 521, Nebraska law

prohibits the register of deeds from recording the deed, memorandum of contract, or land contract.

For the purposes of documentary stamp tax, Neb. Rev. Stat. § 76-901 provides that “all deeds purporting to

transfer legal title or benecial interest shall be presumed taxable unless it clearly appears on the face of the deed

or sucient documentary proof is presented to the register of deeds that the instrument is exempt under section

Neb. Rev. Stat. § 76-902.” 350 NAC 52-003.01 further dictates that documentary stamp tax exemptions are to

be strictly construed.

Under Nebraska law, it is the duty of a register of deeds to determine whether a deed presented for recording

is entitled to an exemption prior to recordation. If an exemption is claimed, the register of deeds must examine

the deed to determine whether it clearly appears on its face to qualify for an exemption. If not, but sucient

documentary proof is presented to the register of deeds which supports the claimed exemption, the register of

deeds may accept the exemption and record the deed. If the deed on its face fails to support the claimed exemption

and the supporting documentation does not support the claimed exemption, or no supporting documentation has

been provided, the Form 521 is not complete and the deed cannot be recorded unless and until documentary

stamp tax is collected.

Exemption 5b

Nebraska law allows for the exemption from documentary stamp tax of certain deeds involving family

corporations, partnerships, or limited liability companies (LLCs) that are transferred in the name of the corporation

or partnership. The exemption is not allowed when such deeds are transferred in the name of the individual

shareholders, partners, or members.

Neb. Rev. Stat. § 76-902(5)(b), also referred to as Exemption 5b, provides:

“Deeds to or from a family corporation, partnership, or limited liability company when all the shares of

stock of the corporation or interest in the partnership or limited liability company are owned by members of

a family, or a trust created for the benet of a member of that family, related to one another within the fourth

degree of kindred according to the rules of civil law, and their spouses, for no consideration other than the

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Documentary Stamp Tax – Family Corporation,

Partnership, and Limited Liability Company Exemption

issuance of stock of the corporation or interest in the partnership or limited liability company to such family

members or the return of the stock to the corporation in partial or complete liquidation of the corporation

or deeds in dissolution of the interest in the partnership or limited liability company. In order to qualify for

the exemption for family corporations, partnerships, or limited liability companies, the property shall be

transferred in the name of the corporation or partnership and not in the name of the individual shareholders,

partners, or members”

Generally, with certain exceptions, deeds to a family corporation, partnership or LLC from a family member,

deeds to a family member from a family corporation, partnership, or LLC, and deeds between two corporations,

partnerships, or LLCs whose shareholders or members are members of the same family, for no consideration,

may be eligible for exemption 5b upon a showing that the shareholders or members of the family entit(y)/(ies) are

members of the same family. The only consideration allowed is the issuance or return of stock in the corporation

or interest in the partnership or LLC. More detail is provided below.

When exemption 5b is claimed on the Form 521 being led, the register of deeds is to review the deed and any

supporting documentation, such as a sworn adavit, to ensure that the conveyance of real estate is eligible for

the exemption. If no supporting documentation is provided, the exemption should not be granted and the deed

should not be recorded unless documentary stamp tax is collected.

Deeds eligible for Exemption 5b, subject to exceptions:

• Deeds TO a corporation (whose stock are all owned by members of a family), a partnership (whose

partners are family members), or an LLC (whose members are family members), as grantee, given for no

consideration except the issuance of stock in the corporation or interest in the partnership or LLC to family

members. No other consideration is allowed;

• Deeds FROM a corporation (whose stock are all owned by members of a family), a partnership (whose

partners are family members), or an LLC (whose members are family members), as grantor, for no

consideration except the return of stock to a family member who is a shareholder in the corporation as part

of the partial or complete liquidation of the corporation or the dissolution of a family members interest in

the partnership or LLC. No other consideration is allowed.

Exceptions (Deeds NOT eligible for Exemption 5b):

• Deeds between family members in their names as individuals.

• Deeds involving a party, as grantor or grantee, who is not a member of the same family as the shareholders

or members of the other party to the transaction OR which is not also a family corporation, partnership, or

LLC of the same family as the other party in the transaction.