Question 1
A New York City co-op shareholder sells their shares and proprietary lease. Which of the following statements correctly describes New York City's Cooperative and Condominium Tax Abatement in the context of this sale?
- A. The abatement transfers automatically to the buyer upon closing without any action required
- B. The abatement is a reduction of the co-op corporation's real property tax bill, which is then passed through to qualifying unit owners as a credit on their maintenance; it does not transfer with the shares and must be re-applied for by the new owner ✓ Answer
- C. The abatement applies only to condominiums, not to cooperative apartments
- D. The seller must repay all prior years' abatement amounts to the city at closing as a condition of transfer
Explanation: The NYC Cooperative and Condominium Tax Abatement (Administrative Code Title 11) reduces the real property tax assessed against the co-op building as a whole; the benefit is passed to individual unit shareholders as a reduction in their maintenance charges. It is tied to the unit's status and owner-occupancy eligibility, not to the individual shareholder, and does not automatically transfer at closing — the new owner must qualify and apply. There is no repayment obligation at closing.
Question 2
Under New York's equalization rate system administered by the Office of Real Property Tax Services (ORPTS), what is the purpose of a municipality's 'state equalization rate'?
- A. It sets the maximum tax rate a municipality may levy on assessed property values
- B. It represents the ratio of a municipality's total assessed value to the total full (market) value of all taxable property, used to ensure equitable distribution of county and school tax levies across municipalities ✓ Answer
- C. It determines the income eligibility thresholds for the STAR exemption in each municipality
- D. It establishes the rate at which non-resident sellers must withhold estimated income tax on gains from property sales
Explanation: Under RPTL Article 12, ORPTS establishes state equalization rates for each assessing unit, representing the ratio of locally assessed value to full market value. These rates are used to apportion county and school district taxes equitably across municipalities that may assess property at different fractions of market value. They are not tax levy caps, STAR income thresholds, or withholding rates.
Question 3
A trust transfers title to New York real property to its beneficiary for no monetary consideration as part of a routine trust distribution. Under New York Tax Law Section 1405, which statement best describes the transfer tax treatment?
- A. The transfer is fully taxable because all conveyances require payment of transfer tax regardless of consideration
- B. The transfer may be exempt if it qualifies as a distribution from a trust to a beneficiary where no consideration passes, under the applicable exemption in Tax Law Section 1405 ✓ Answer
- C. The transfer is exempt only if the beneficiary is a spouse of the grantor
- D. The transfer is subject to tax at a reduced rate of 0.5% because consideration is less than full value
Explanation: New York Tax Law Section 1405(b) provides specific exemptions from the real estate transfer tax, including certain transfers to or from a trust where no consideration is paid and the transfer is consistent with the trust's governing instrument. A taxable consideration must exist for the tax to apply; a gratuitous distribution to a beneficiary without consideration can qualify for exemption. The tax does not apply at a reduced rate in such circumstances.
Question 4
In New York, when a deed is recorded and the TP-584 is filed for a transfer that is claimed to be exempt from the real estate transfer tax, what must accompany the TP-584 to substantiate the exemption claim?
- A. A letter from the New York Department of State confirming the exemption
- B. A completed Schedule B of the TP-584 identifying the specific exemption claimed under Tax Law Section 1405 ✓ Answer
- C. A copy of the seller's federal income tax return for the prior year
- D. A notarized affidavit from both buyer and seller filed separately with the Office of Real Property Tax Services
Explanation: The TP-584 form includes Schedule B, which the taxpayer must complete to claim an exemption from the New York State real estate transfer tax. The applicable exemption code under Tax Law Section 1405 must be identified on Schedule B. No separate DOS letter, tax return, or ORPTS affidavit is required to claim the exemption.
Question 5
Under New York Real Property Tax Law, what is the term for the official list maintained by each local assessor that identifies all taxable parcels, their owners, and assessed values, and serves as the basis for property tax levies?
- A. The tax roll abstract
- B. The assessment roll ✓ Answer
- C. The equalization schedule
- D. The property transfer report
Explanation: Under RPTL Article 5, the 'assessment roll' is the official document prepared by the local assessor that lists all real property in the taxing jurisdiction, its owner of record, and its assessed value. It is the foundational document from which tax bills are computed. An 'abstract' summarizes the roll; the equalization schedule relates to state equalization rates; and the property transfer report (RP-5217) is filed at deed recording.
Question 6
A buyer purchases a residential property in New York City for $3,500,000. Which parties are responsible for paying the New York State mansion tax and the NYC supplemental mansion tax on this transaction, respectively?
- A. The seller pays both the state mansion tax and the NYC supplemental mansion tax
- B. The buyer pays both the state mansion tax and the NYC supplemental mansion tax ✓ Answer
- C. The seller pays the state mansion tax and the buyer pays the NYC supplemental mansion tax
- D. The buyer pays the state mansion tax and the seller pays the NYC supplemental mansion tax
Explanation: Both the New York State mansion tax (Tax Law Section 1402-a) and the NYC supplemental mansion tax (enacted as part of the 2019 budget) are imposed on and paid by the purchaser (buyer). Neither tax is the seller's obligation; both are buyer-paid excise taxes on the purchase consideration.