Land Sale, Leaseback Created Dual Washington DC Tax Liabilities

The sale of five condominium units and an accompanying lease of the property back to the seller were separate events that both created transfer tax liabilities, Washington’s highest court ruled Thursday.

The judges rejected seller Lano/Armada Harbourside LLC’s argument that the leaseback was part of the same transaction, negating the need to file a separate deed with the taxes it would draw. “At the time of the sale, Lano/Armada did not and could not have a leasehold interest—which would have necessitated a leasehold agreement with itself—to retain,” Judge Catharine F. Easterly wrote for the District of Columbia Court of Appeals. ...