It is our responsibility to accurately report the purchase price of a property to the county auditor to enable them to calculate transfer tax. The state law calls for the “value of the real property or interest in real property…granted, assigned, transferred, or otherwise conveyed by the deed.”
Therefore, we must report the purchase price as the price paid by the end-buyer in an assignment contract. The purchase price on the HUD-1 settlement statement must be the end-buyer’s purchase price, with any assignment fee deducted from the seller’s proceeds as a closing cost.
If you are involved in a transaction involving an assignment of contract, we recommend a double-closing instead where the contract assignor becomes the purchaser in the ‘A to B’ transaction and the seller in the ‘B to C’ transaction. This does involve paying transfer tax and recording fees for the second transaction, but it is the cleanest way to carry out a transaction like this one as there is no confusion on the part of the seller as to who is involved in the transaction or how much the seller will receive.