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TP-584-REIT (7/23) (page 2)
General information (v) payment of a tenant’s attorneys’ fees;
A conveyance of real property to a real estate investment (e) to acquire any interest in real property (including an
trust (REIT), as defined in the Internal Revenue Code (IRC) ownership interest in any entity owning real property)
section 856A, may be subject to the transfer tax at the reduced except an acquisition that would qualify for the reduced
rate of $1 for each $500 or fractional part of consideration. The rate of tax provided for a REIT transfer (without regard to
conveyance may be to the REIT itself or to an entity, such as a this requirement); or
partnership or a corporation, in which a REIT owns a controlling (f) for reserves established for any of the purposes described
interest immediately following the transfer (REIT transfer). in items (a), (b), (c) or (d) above.
To qualify for the reduced transfer tax rate, REIT transfers that For purposes of this requirement, the term real property
are in connection with the initial formation of the REIT must includes real property owned directly or indirectly by the REIT,
occur on or after June 9, 1994. In addition, the REIT transfer whether located inside or outside New York State. Also, the
must also meet certain Ownership retention requirements calculation of the net cash proceeds from the initial offering
and the Use of proceeds requirement described below. See of the REIT is made without regard to any proceeds resulting
TSB-M-94(4)R, 1994 Amendments to the Real Property from the exercise of any underwriter’s over-allotment option in
Transfer Gains Tax and the Real Estate Transfer Tax, for connection with the initial offering of the REIT shares.
the requirements for determining whether a REIT transfer
qualifies as being a transfer that occurs in connection with the Payment of estimated personal income tax by
initial formation of the REIT.
individuals, estates, and trusts
In addition, REIT transfers other than those in connection Nonresidents – Nonresident individuals, estates, and trusts
with the initial formation of the REIT qualify for the reduced taxed under Tax Law Article 22 must comply with the provisions
transfer tax rate if they occur on or after July 13, 1996, but of Tax Law section 663, estimating the personal income
before September 1, 2026. Furthermore, in order to qualify for tax on the gain, if any, from the sale or transfer of certain
the reduced transfer tax rate, a REIT transfer must meet the real property located in New York State. Such nonresident
Ownership retention requirements described below. individuals, estates, and trusts are required to either complete
Form IT-2663, Nonresident Real Property Estimated Income Tax
Ownership retention requirements Payment Form; or Schedule D of Form TP-584, Combined Real
As part of the consideration for the conveyance of real property Estate Transfer Tax Return, Credit Line Mortgage Certificate
or interest therein, the grantors must receive ownership and Certification of Exemption from the Payment of Estimated
interests in the REIT, or in an entity controlled, or to be Personal Income Tax, and file it with Form TP-584-REIT.
controlled by the REIT, which have at least a certain minimum Residents –The requirement for payment of estimated
value as described herein. The value of those ownership personal income tax under Tax Law section 663 does not
interests received in the REIT, or in an entity controlled, or to apply to individuals, estates, and trusts who are residents of
be controlled by the REIT, must be equal to at least 40% (50% New York State at the time of the sale or transfer. Resident
if the conveyance is other than in connection with the initial individuals, estates, and trusts must complete Schedule D of
formation of a REIT) of the equity value of the real property Form TP-584, and file it with Form TP-584-REIT.
or interest therein conveyed by the grantors to the grantee. In
addition, the ownership interests in the REIT, or in an entity See Payment of estimated personal income tax, on page 1
controlled, or to be controlled by the REIT, received by the of Form TP-584-I, Instructions for Form TP-584 for more
grantors as part of the consideration for the conveyance must information.
be retained by the grantors (or an owner of the grantor) for a
period of at least two years from the date of the REIT transfer, Specific instructions
except in the case of the subsequent conveyance of these
interests as a result of the death of an individual grantor. See Schedule A
TSB-M-94(4)R for the method used to calculate the equity
value of the property and the value of the ownership interests Condition of conveyance
received. Indicate the condition of conveyance by checking all the
conditions that apply. If you check item d, attach Form TP-584.1,
Use of proceeds requirement Real Estate Transfer Tax Return Supplemental Schedules, to
At least 75% of the net cash proceeds (after deducting Form TP-584-REIT, with Schedule F completed.
underwriting discounts) received by the REIT from its initial
offering must be used for the following purposes: Schedule B
(a) to make payments on loans secured by any interest in the Line 1 – Enter the consideration for the conveyance as set forth
real property owned directly or indirectly by the REIT; in Tax Law section 1402(b)(3). See TSB-M-94(4)R for more
information on the calculation of consideration and net cash flow
(b) to pay for capital improvements to the real property owned from operations.
directly or indirectly by the REIT;
(c) to pay costs, fees and expenses (including brokerage fees, Line 2 – See Form TP-584-I , page 3, for more information on
commissions and professional fees) incurred in connection the continuing lien deduction.
with the creation of a leasehold or sublease pertaining to Line 4 – Compute and enter the amount of tax due based
the real property owned directly or indirectly by the REIT; on the consideration entered on line 3. The rate is $1 for each
(d) to make payments to or on behalf of a tenant as an $500, or fractional part thereof, of taxable consideration on
inducement to enter into a lease or sublease, including but line 3.
not limited to the following:
(i) a cash bonus paid to a tenant for signing a lease; Schedule C
(ii) a payment for the unexpired term of a tenant’s previous Mark an Xin the appropriate box on Schedule C, if this
lease; schedule is required.
(iii) payment of a tenant’s moving costs;
(iv) payment for a tenant’s improvements that do not
constitute capital improvements (such as temporary
partitions or non-permanent electrical wiring for
computer equipment); and
Signature and affirmation (both the grantors and grantees must sign).
The undersigned certify that the above return, including any certification, schedule or attachment, is to the best of their
knowledge, true and complete, and authorize the persons submitting such form on their behalf to receive a copy for purposes of
recording the deed or other instrument effecting the conveyance.
Grantor signature Title Grantee signature Title
Grantor signature Title Grantee signature Title
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