In 926 North Ardmore Avenue, LLC v. County of Los Angeles, the 2nd District Court of Appeal held that Proposition 13 changes in ownership prompted by transfers of legal entity interests should also be characterized as “realty sold,” resulting in the imposition of realty transfer taxes under the California Documentary Transfer Tax Act in cases even where no real property interests are transferred at all.
BA Realty LLLP (“BA Realty”) owned 100 percent of 926 North Ardmore Avenue LLC (“Ardmore”), which owned an apartment building in Los Angeles. In 2008, the partners in BA Realty transferred 90 percent of their partnership interests to two trusts (45 percent each). The transfers resulted in a change in ownership and reassessment of the apartment building for Proposition 13 (“Prop 13”) purposes under R&TC § 64(d).
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