In 926 North Ardmore Avenue, LLC v. County of Los Angeles, an appellate court recently upheld the imposition of a documentary transfer tax on the sale of the legal entity that owned real property, even though title to the real property did not change. In 926 North Ardmore, various entities owned BA Realty, LLP. BA owned 926 North Ardmore Avenue, LLC. Ardmore held title to and managed an apartment building. The owners of BA sold approximately 90 percent of the partnership interest to two trusts, with 45 percent allocated to each. Following the sale, the County sent a notice demanding that Ardmore pay a documentary transfer tax based on the value of the apartment building. Ardmore paid the tax, but sought a tax refund on the ground that no real estate changed hands. The only transfer was an ownership interest in a legal entity that held title to the property. The trial court disagreed and rendered judgment in favor of the County. The court of appeals affirmed.
Shannon B. Jones, Partner, firstname.lastname@example.org