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New York employs step transaction doctrine to tax series of real property transfers

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On Oct. 10, 2017, the Supreme Court of New York, Appellate Division, First Department, held that a series of property interest transfers was properly treated as a single, taxable transaction under the step transaction doctrine and did not qualify for the “mere change in form” exemption under the New York City (NYC) Real Property Transfer Tax (RPTT). In doing so, the Court distinguished the NYC RPTT treatment of these transactions from a recent decision issued by the New York State Tax Appeals Tribunal exempting the transfers from the NYS Real Estate Transfer Tax.