Which document is used to document the payment of transfer tax?

Which document is used to document the payment of transfer tax?

• A. Documentary stamps
• B. Deed
• C. Mortgage note
• D. Closing statement

Answer: (A)

Documentary stamps are used to document payment of transfer tax. When property is conveyed, transfer tax is due, and the payment is evidenced by affixing documentary stamp taxes to the deed (the conveyance document). This stamp shows the tax has been paid as part of the closing process. The deed itself is the instrument of transfer, but it doesn’t prove tax payment on its own; the stamps on the deed serve that purpose. A closing statement lists charges and funds but isn’t the document that records transfer tax payment, and a mortgage note is unrelated to conveying the property and its tax.

Documentary stamps are used to document payment of transfer tax. When property is conveyed, transfer tax is due, and the payment is evidenced by affixing documentary stamp taxes to the deed (the conveyance document). This stamp shows the tax has been paid as part of the closing process. The deed itself is the instrument of transfer, but it doesn’t prove tax payment on its own; the stamps on the deed serve that purpose. A closing statement lists charges and funds but isn’t the document that records transfer tax payment, and a mortgage note is unrelated to conveying the property and its tax.