MENU Close
Close
  • Home
  • Services
  • Attorneys
  • Resources
  • News & Events
  • About Us
  • Contact Us
  • Join our Team
Search
Back
    Quick Links:
    Join Webinar
    Read News
    Our Location
    A
    Alternative Dispute ResolutionAntitrust & Trade RegulationAppellate Practice
    B
    Banking & Financial ServicesBankruptcy, Creditors’ Rights, and Financial RestructuringBeer LawBusiness Law
    C
    Cannabis LawConstruction LawCriminal Defense
    E
    Economic Development LawElder Care & Special Needs LawElectronic Discovery ("E-Discovery")Environmental LawEstate Planning and Administration & Wealth PreservationExecutive Compensation, Employment, ERISA, and Employee Benefits
    F
    Food, Beverage & HospitalityFranchise Law
    H
    Health Care & Life SciencesHealth Care ProvidersHigher EducationHospitals and Health Networks
    I
    ImmigrationInsurance CoverageIntellectual PropertyIntellectual Property Litigation, Arbitration, and Dispute ResolutionIntellectual Property Portfolio Strategy, Management & LicensingInternational BusinessInternet Law
    L
    Labor & EmploymentLiquor Law, Licensing, Manufacturing, and DistributionLitigation
    M
    Media LawMergers & AcquisitionsMunicipal Law
    N
    Non-Profit Law
    P
    Patent Preparation and ProsecutionPharmaceutical / Medical Devices / Pharma ServicesProducts and Consumer Liability DefenseProfessional LiabilityPublic Utilities
    R
    Real Estate, Finance, and Land Use
    S
    SecuritiesSolar Energy
    T
    TaxationTelecommunicationsTrademark & Copyright Protection & Enforcement
    V
    Venture Tech & Emerging Growth Companies
    W
    White Collar Investigations & DefenseWorkers’ Compensation
    • New Jersey
    • New York
    • Pennsylvania
    • Blogs
    • Articles
    • Podcasts
    • COVID-19 Resources
    • News
    • Events
    • Webinars
    • About Us
    • Delivering Value
    • Diversity & Inclusion
    • Meritas

    New Jersey

    400 Crossing Boulevard
    8th Floor
    Bridgewater, NJ 08807
    Phone:(908) 722-0700
    Fax:(908) 722-0755

    28 Valley Road
    Suite 1
    Montclair, NJ 07042

    New York

    7 Times Square
    21st Floor
    New York City, NY 10036
    Phone:(212) 808-0700
    Fax:(212) 808-0844

    Pennsylvania

    515 West Hamilton Street
    Suite 502
    Allentown, PA 18101
    Phone:(610) 391-1800
    Fax:(610) 391-1805

    • What sets us apart
    • Attorneys
    • Other Professionals
    • Professional Development
    • Non-Discrimination Policy

    Categories

    Breach of Lease Breach of Lease Options Breach of Purchase & Sale Agreements Development/Zoning Disputes Easement & Boundary Disputes Foreclosure/Deficiency Judgments Foreclosures General Land Use & Zoning Appeals Landlord Tenant Disputes Lease Guarantees Rental Real Estate Subrogation Tax Appeals Uncategorized
    Blogs > Location Litigation > Entities May Still Transfer Real...
    Member
    Timothy P. McKeown
    Visit Profile

    Entities May Still Transfer Real Property to Related Entities for Nominal Consideration and Claim Benefit of Exemption Under Realty Transfer Fee Act

    The Tax Court of New Jersey recently issued an unpublished opinion confirming that the exemption from the Realty Transfer Fee ("RTF") allowed by New Jersey statute where the consideration is less than $100 is applicable to conveyances between related entities. 

    In this particular case, Mack-Cali Realty LP conveyed certain property in Woodcliff Lake Borough and partly in Montvale Borough to 530 Chestnut Realty, LLC.  By separate deed of the same date Mack-Cali conveyed other property in Woodcliff Lake Borough to 470 Chestnut Realty, LLC. In each instance, the deed recited a consideration of “Ten Dollars ($10) and other good and valuable consideration.”  Mack-Cali was the sole member of each of the grantee LLCs.  Apart from the stated dollar sums, no other consideration passed from the grantees to Mack-Cali.

    The deeds were promptly presented to the Bergen County Clerk for recording; however, the Clerk’s office kicked back the deeds for failure to pay the RTF calculated on consideration derived from the assessed valuation of the properties. An inquiry with the Division of Taxation ensued and the Division ultimately advised that payment of the RTF was properly required. In doing so, the Division relied on its interpretation of a particular regulation that no transfer between commonly owned legal entities could be taken for nominal consideration and that indirect benefits to the transferor may be taken into account in determining value. When this value was indeterminable, the regulation upon which the Division relied provides that the RTF is then calculated on the assessed value of the property being conveyed on the date of the transfer adjusted to reflect the true value as determined by the Director’s Ratio for that municipality for the current year.

    The Tax Court disagreed with the Division’s interpretation of its regulation as being at odds with the statute specifically authorizing the RTF exemption, which does not take into account the indirect benefit to the transferor argued for by the Division. In addition, the Tax Court determined that the Division did not enforce its regulation consistently in accordance with its own terms.

    Thus, the court looked to the deeds and found that the consideration stated in the deeds of less than $100 made the transactions exempt from the RTF. The court also ruled as ineffective the blanket exclusion contained in the Division’s regulation that no transfer between commonly owned legal entities will be taken to be for nominal consideration.

    In these lean times, the State of New Jersey is becoming more aggressive in attempting to collect tax revenues.  This case is but one example of the State’s efforts in this regard.

    Member
    Timothy P. McKeown
    Visit Profile

    Related Posts

    Is Marital Real Estate Beyond a Creditor's Reach in New Jersey? Property Tax Appeals Can Save You Money The Landlord's Liens

    Share

    Tags

    #assessed value #blanket exclusion #calculated #consideration #conveyances #exemption #indeterminable #indirect benefits #interpretation #legal entities #Mack-Clai Realty #New Jersey #nominal #opinion #real property #Realty Transfer Fee #regulation #RTF #statute #tax court #tax revenue #transfer #transferor #value

    Similar Posts

    April 6, 2020
    Operational Guidance for Planning Boards and Zoning Boards of Adjustment During the COVID-19 Pandemic
    Operational Guidance for Planning Boards and Zoning Boards of Adjustment During the COVID-19 Pandemic
    May 21, 2010
    The Interstate Land Development Act – Does It Apply to Commercial Developers?
    The Interstate Land Development Act – Does It Apply to Commercial Developers?

    Helpful links

    • About Us
    • News
    • Services
    • Blogs
    • Attorneys
    • Articles
    • (COVID-19)
    • Events
    • Join our Team
    Connect

    Connect with Us

    • LinkedIn
    • Facebook
    • Twitter
    • Instagram
    • Youtube

    Join our growing team

    We are looking for quality attorneys to help us do more for our clients. At Norris McLaughlin, each attorney has the same opportunity to succeed whether you’re at the beginning of a career or pinnacle of the profession.

    Learn More

    Subscribe to our content

    Receive timely legal information delivered to your inbox

    This field is for validation purposes and should be left unchanged.
    © , Norris McLaughlin, P.A., All Rights Reserved. Attorney Advertising.
    VIEW OUR DISCLAIMER,  TERMS OF USE,  AND PRIVACY POLICY

    We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume you consent to our cookie policy. Learn more