EFTA00996823.pdf

From: "jeffrey E." <[email protected]> To: Melanie Spinella Subject: Fwd: SH Meadow Lane-unimproved lot merger Date: Sat, 13 Sep 2014 20:49:35 +0000 Forwarded message From: Ada Clapp <1 Date: Saturday, September 13, 2014 Subject: SH Meadow Lane-unimproved lot merger To: "jeffrey E." <[email protected]> Cc: "Melanie Spinella - Apollo Management (' " The taxes would be the same as with the approach you suggested (but the sale approach has the benefits outlined below in my earlier email). I don't know the value of the unimproved lot, so I can't give you a specific amount. However, as of 2013 (I could not find the latest tax rates on the internet and the LI attorney has not yet provided them) NYS "Seller's" Transfer Tax (which would be paid by Leon and Debra) was $2.00 for every $500 (or fraction thereof) of the purchase price and the "Buyer's" Peconic Tax for Southampton (which the LLC/AP02 Declaration would pay) is 2% on the amount over $100,000 on the purchase of unimproved land. So the tax out of "Leon's" pocket would be relatively small but the Trust's tax is a bit heftier. Ada Clapp Elysium Management LLC 445 Park Avenue Suite 1401 New York, New York 10022 Direct Dial: Fax: Email: This communication and any attachment is for the intended recipient(s) only and may contain information that is privileged, confidential and/or proprietary. If you are not the intended recipient, you are hereby notified that further EFTA00996823 dissemination of this communication and its attachments is prohibited. Please delete all copies of this communication and its attachments and notify me immediately that you have received them in error. Thank you. From: jeffrey E. [mailtoleevacationagmaitcoml Sent: Saturday, September 13, 2014 12:49 PM To: Ada Clapp; Melanie Spinella Subject: Re: SH Meadow Lane-unimproved lot merger total tax to be paid if leon were to choose to do it your way On Sat, Sep 13, 2014 at 11:13 AM, Ada Clapp • > wrote: Hi Jeffrey, I was concerned that Leon and Debra's transfer of the unimproved lot to SH Meadow Lane in exchange for membership interests in the LLC would trigger the New York State Transfer Tax (paid by seller) and the Community Preservation Fund Tax (a/k/a the Peconic Tax paid by buyer). I posed this question to Leon's Long Island attorney who consulted with the title company. According to counsel for the title company, Leon and Debra's receipt of the membership interests would constitute consideration triggering both transfer taxes (he noted a possible exception if the beneficial owners of the trust that owns the LLC were the same as the individuals now contributing the unimproved lot, but that is not our case). Given that taxes must be paid for the LLC contribution, shouldn't we reconsider having the LLC simply buy the lot from Leon? Of course, we would first have Debra transfer her ownership interest to Leon so that the sale would be disregarded for income tax purposes. The sale approach would not only remove future appreciation on the residence from Leon's estate but will avoid the complexities (and potential gift tax issues) of having to true-up capital accounts when the APO2 Trust makes additional capital contributions (to build the new residence). It also removes the obligation going forward to collect pro-rata contributions from the Trust, Leon and Debra for ongoing maintenance and operating expense of the new residence (oil, gas, electric, water, etc.) . What do you think? Ada Clapp Elysium Management LLC EFTA00996824  445 Park Avenue Suite 1401 New York, New York 10022 Direct Dial: Fax: Email: This communication and any attachment is for the intended recipient(s) only and may contain information that is privileged, confidential and/or proprietary. If you are not the intended recipient, you are hereby notified that further dissemination of this communication and its attachments is prohibited. Please delete all copies of this communication and its attachments and notify me immediately that you have received them in error. Thank you. please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited EFTA00996825 and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA00996826