By Ted Friedman and Charlie Kearns
The New York City Tax Appeals Tribunal held that the Petitioner, a Delaware LLC, owed New York City real property transfer tax (RPTT) on the transfer of an interest in certain real property. The Tribunal applied the step transaction doctrine and treated the contribution of the Petitioner’s tenant-in-common interest in the property to a newly formed LLC in exchange for a membership interest in the LLC, and the sale of that membership interest to a third party in exchange for cash and relief from liability under a mortgage, as interrelated steps in a single, taxable transaction. In the Matter of GKK 2 Herald LLC, No. TAT (E) 13-25 (RP) (NYC Tax App. Trib. July 15, 2016).