New York Rules On Estate Tax Liability For Single-Member LLC Interests

The New York State Department of Taxation and Finance has recently issued an advisory opinion that could have an impact on single-member LLC interests.  The Federal tax entity classification election could determine whether property that is owned through an LLC by an out of state person is liable for New York estate taxes.  Taxation officials would want to know if the LLC interest is characterized as tax exempt intangible personal property or taxable real property.  The advisory opinion ruled that if the wholly owned LLC is disregarded for Federal taxing purposes then it would also be disregarded for State purposes thus leaving any of the real in-state property open to estate taxes.  More details of the opinion can be read here. 

See Michael J. Cataldo and Paul T. Casas, New York State Department of Taxation and Finance To Disregard Single-Member LLC Interests For New York Estate Tax, Pillsbury Law, July 14, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.