Documentary stamps are used to

• A. document the payment of a transfer tax.
• B. record the deed in the public records.
• C. evidence the mortgage is paid in full.
• D. certify the property boundaries.

Answer: (A)

Documentary stamps reflect the transfer tax due when real property changes hands. They are the tax evidence attached to or associated with the deed to show that the transfer tax has been paid as part of the closing process, and often must be settled before the deed is recorded. They aren’t about recording the deed itself (that’s a separate recording fee), nor about proving a mortgage is paid off or certifying property boundaries. In short, documentary stamps exist to document payment of the transfer tax on the conveyance of title.