New York Judge Affirms Investors’ Deferred Tax on Property Swap

Two members of a partnership that owned an apartment building on Manhattan’s Central Park West properly exchanged their interests for similar properties in order to defer paying taxes on the sale, a New York Judge ruled in an opinion posted Friday.

The New York Division of Tax Appeals upheld the “drop and swap” transaction, through which the partnership distributed property to its partners who then rolled the proceeds of the sale into the purchase of like-kind property. The transaction isn’t disqualified from beneficial tax treatment merely because the individual members held the property momentarily before the sale, Administrative Law Judge ...