New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter IV - Sales And Use And Other Miscellaneous Taxes › Subchapter B - Real Estate Transfer Tax › Part 575 - General Provisions › Section 575.12 - Real property situated partly within and partly without the State of New York

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 1415(d)
(a) Where real property is situated partly
				  within and partly without the boundaries of the State of New York, the
				  consideration subject to tax is such part of the total consideration as is
				  attributable to the portion of such real property situated within the State of
				  New York or to the interest in such portion. If the consideration attributable
				  to the property located in the State of New York is set forth in the contract,
				  such amount may be used to compute the tax due.
(b) If the contract does not set forth the
				  amount of consideration attributable to the portion of real property or
				  interest therein situated within the State of New York, the consideration must
				  be reasonably allocated between the portion of such property or interest
				  therein situated within the State of New York and the portion of such property
				  or interest therein situated without the State of New York.
(1) If the grantor and the grantee enter into
				  a written agreement, signed by both the grantor and the grantee, which sets
				  forth a reasonable allocation of consideration, that allocation of
				  consideration may be used to compute the tax due.
(2) If the grantor and the grantee do not
				  enter into such an agreement, or if the allocation of consideration set forth
				  in such agreement is deemed unreasonable by the department, the allocation of
				  consideration must be computed by multiplying the amount of consideration by a
				  fraction, the numerator of which is the fair market value of the real property
				  or interest therein situated within the State of New York and the denominator
				  of which is the total fair market value of all the real property or interest
				  therein being conveyed. Except in the case of a transfer or acquisition of a
				  controlling interest where consideration means fair market value of the real
				  property or interest therein (see section
				  575.1[d][4] 
				  of this Part), the tax is computed on the allocated portion of the actual
				  consideration paid even if that amount is greater or less than the fair market
				  value as determined by appraisal.
Example 1:
A conveys to B real property which is situated partly
					 within New York State and partly within Vermont. The consideration attributable
					 to the portion of the property situated within New York State was not specified
					 in the contract of sale or in a written agreement signed by both A and B. B
					 pays A $150,000 consideration for the property. An appraisal of the property,
					 made just prior to the sale, indicates that the total fair market value of the
					 property is $150,000 and that the fair market value of the portion of the
					 property situated within New York State is $120,000. The amount of
					 consideration used to commute the tax is $120,000.
Example 2:
Assume the same facts as example 1 except that the
					 appraisal indicates that the total fair market value of the property is
					 $200,000 and the fair market value of the portion of the property situated
					 within New York State is $160,000. The amount of consideration used to compute
					 the tax is determined by multiplying the amount of consideration paid by B
					 ($150,000) by 80 percent. Eighty percent equals the fair market value of the
					 property situated within New York State ($160,000) divided by the total fair
					 market value of the property ($200,000). The amount of consideration used to
					 compute the tax is $120,000.
Example 3:
Corporation A owns real property which is situated partly
					 within New York State and partly within Vermont. This is the only asset of
					 corporation A. One hundred percent of the stock of corporation A is sold to
					 corporation B for $300,000. Since a controlling interest in corporation A was
					 transferred to corporation B, there was a taxable conveyance of the real
					 property owned by corporation A to corporation B. An appraisal of the real
					 property indicates that the total fair market value of the property is $250,000
					 and that the fair market value of the property situated within New York State
					 is $200,000. The amount of consideration used to compute the tax is $200,000.
					 The appraised fair market value is used rather than an allocated portion of the
					 amount paid for the stock.