Non-resident corporate partner subject to NYC tax on partnership stock sales
July 28, 2021
Cadwalader, Wickersham & Taft LLP
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In the Goldman Sachs Petershill Fund Offshore Holdings (Delaware) Corp. The New York City Tax Tribunal ruled that the passive partner in a higher-ranking partnership of the New York City General Tax Corporation (GCT) was on the sale of an interest in a subsidiary partnership that operated in New York City.
The GCT is imposed on the corporate partners of a partnership operating in New York City. The administrative judge rejected the shareholder’s argument that the participation of the upper tier company in the lower tier company was equivalent to an investment in company shares; Instead, the judge ruled that the shareholder’s distributing share of the capital gain from the sale of the subordinate partnership by the higher-ranking partnership (as well as his distributing share of the advance sales, deductions, profits and losses from the lower animal partnership) were subject to the terms and conditions.
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