Paul L. Caron

Thursday, September 5, 2013

The Transfer Tax Trap -- It's Real

Tax Analysys Logo (2013)Maria P. Eberle & Hayes R. Holderness (both of McDermott Will & Emery, New York), The Transfer Tax Trap -- It's Real, 69 State Tax Notes 605 (Sept. 2, 2013):

Most states (and many localities) have some form of real property transfer tax (RPTT), which is generally imposed when the ownership of a piece of real property changes hands. However, not all RPTTs are created equally, and many taxpayers may find themselves with an unexpected tax bill if they don't pay close attention to each jurisdiction's rules. In our practice, we most often see RPTT issues arise in the context of corporate acquisitions, dispositions, mergers, and reorganizations -- including transactions that are generally regarded as "tax- free" because gains are exempt from income tax. This article provides an overview of the applicability of RPTTs to the most common types of transactions, and variations on those transactions, and offers insights into the numerous traps or opportunities that may exist. 

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