Matter of Mutual of Am. Life Ins. Co. v Tax Commn.

NY Supreme Court, Appellate Division, First Department


"In these consolidated tax certiorari special proceedings, for tax years 1996-97 through 2003-04, the petitioner, Mutual of America Life Insurance Company (hereinafter referred to as "Mutual"), owner of a building at 320 Park Avenue, Manhattan, challenges the assessed valuation of the property by The Tax Commission and The Commissioner of Finance of The City of New York (hereinafter referred to as the "City"). On appeal, Mutual asserts, inter alia, that the trial court overvalued the property by disallowing an annual capital expenditure deduction for leasing costs on owner-occupied space. Because there is no legal authority directly on point, and neither party cites to any section of the tax code to support its arguments, this is a case of first impression on the issue of whether such leasing costs can be taken as a below-the-line deduction [FN1] in the valuation of an investment property for tax purposes. We agree with the trial court that they may not be so deducted except where owner-occupied space becomes a de facto vacancy and the deductions are subject to proof."

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Reference Info:Decision | State, 2nd Circuit, New York | United States

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