Summer 2011Issue 12
Prestige Title Agency, Inc.

Prestige Title eNews

Summer 2011 

RCandRPTransfer Tax Consequences on Transfers of Controlling Interests in Entities Owning Real Property Interest

 

A corporation, partnership or other business entity conveying its interest in whole or in part in real property for consideration will, as a general rule, be subject to transfer tax. However, a transfer or acquisition of a controlling interest in a corporation or partnership having an interest in real property can also create transfer tax consequences.

 

A transfer or acquisition of a total of 50% or more of the voting stock, capital, profits or beneficial interests of a corporation or 50% or more of the capital, profits or beneficial interest of a partnership, trust or other entity are deemed controlling interests. NYC adds to this definition, 50% or more of the total fair market value of all classes of stock. NYS adds to this definition 50% or more of the capital, profits or beneficial interest in the voting stock of the corporation. No tax will be due if the entity whose interest is being acquired does not itself own at least a 50% interest in NY real property.

 

The types of interests subject to taxation include a fee, leasehold, a beneficial interest, an encumbrance, development rights, air rights, options to purchase, contracts of sale, and rights to use or occupy real property or to receive income, profits or rents from real property. Not subject to taxation are rights of first refusal to purchase real property and ownership of notes or other receivables secured by real property.

  

 

If you have any questions or would like further information regarding any of the articles in this newsletter, please contact Keith Eng, Esq. at (212) 651-1200 or keng@prestitle.com.  
 
Also, if there are any topics that you would like us to include in future newsletters, please feel free to e-mail us with suggestions at info@prestitle.com   
In This Issue
Announcements
Did you know that Prestige Title handles Commercial transactions nationwide?
 
Please contact Anthony Chiellino for further details at (212) 651-1200 or achiellino@prestitle.com.

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Update on FHFA Rulemaking on Private Transfer Fees - Click Here

 
If you have any questions or would like further information regarding any of the articles in this newsletter, please contact Keith Eng, Esq. at (212) 651-1200 or keng@prestitle.com.   
 
Also, if there are any topics that you would like us to include in future newsletters, please feel free to e-mail us with suggestions at info@prestitle.com.    
 
 
Prestige Title Agency, Inc. provides Commercial and Residential Title Services Nationwide. For more information, please contact Anthony Chiellino at (212) 651-1200 or achiellino@prestitle.com
 
 
15 W. 39th St. 10th Fl. New York, NY 10018 Tel (212) 651-1200 Fax (212) 651-1201
Member of New York State Land Title Association Member of American Land Title Association