Nonresident Corporate Partner Subject to NYC Tax on Sale of Partnership Interest

Cadwalader, Wickersham & Taft LLP
Contact

Cadwalader, Wickersham & Taft LLP

In Matter of Goldman Sachs Petershill Fund Offshore Holdings (Delaware) Corp., the New York City Tax Tribunal held that an upper-tier partnership’s passive corporate partner was subject to the New York City General Corporation Tax (GCT) on the upper-tier partnership’s sale of an interest in a lower-tier partnership that was doing business in New York City.

The GCT is imposed on the corporate partners of a partnership doing business in New York City. The administrative law judge rejected the corporate partner’s argument that the upper-tier partnership’s investment in the lower-tier partnership should be analogized to an investment in corporate stock; instead, the judge held that the corporate partner’s distributive share of capital gain from the upper-tier partnership’s sale of the lower-tier partnership (as well as its distributive share of pre-sale income, deductions, gains, and losses from the lower-tier partnership) was subject to the GCT.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cadwalader, Wickersham & Taft LLP | Attorney Advertising

Written by:

Cadwalader, Wickersham & Taft LLP
Contact
more
less

Cadwalader, Wickersham & Taft LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.