New York City imposes a real property transfer tax on most property transfers that take place in the city. And even when no tax is due (e.g., when the consideration is $25,000 or less), an information return is still required. With the exception of properties located in Staten Island, taxpayers file these required tax forms, namely Form NYC-RPT, Real Property Transfer Tax Return, using the city’s Automated City Register Information System, also known as ACRIS.
Both Form NYC-RPT and ACRIS have historically required taxpayers to list information about the “grantor” and the “grantee” in a given transaction, including name, address, and Social Security number. But when it came to LLCs, only single member LLCs needed to previously disclose any information, and only the identity of the sole member was required. Effective May 18, 2015, this changed. Form NYC-RPT (and the corresponding ACRIS reporting system) now include both “single member LLCs” and “multiple member LLCs” as types of grantors and grantees required to submit information.
For any grantor or grantee that is a partnership or multiple member LLC, the revised form requires the name and Social Security number (SSN) or employee identification number (EIN) for each general partner or member. Taxpayers must provide the requested information for each general partner or member in a supporting document with a separate page for each partnership or LLC. And if an SSN or EIN is not provided, an affidavit must be attached to attest for the reasons the information is missing.
If you’re wondering about the policy underlying these changes, it’s our best guess that these enhanced forms could be used to assist with residency audits and other New York State/City tax matters. In fact, the Privacy Act Notification (which lets taxpayers know why their SSNs are required) found on Form NYC-RPT provides that “Social Security numbers…are requested for tax administration purposes and will be used to facilitate the processing of tax returns and to establish and maintain a uniform system for identifying taxpayers who are or may be subject to taxes administered and collected by the Department of Finance. Such numbers may also be disclosed as part of information contained in the taxpayer’s return to another department, person, agency or entity as may be required by law, or if the taxpayer gives written authorization to the Department of Finance.” So if Auric Goldfinger is considering hiding behind a shell corporation to protect his assets (presumably gold) from the consequences of a New York City residency audit, he may need to abandon his evil plan before reporting his next property transfer.
