Rubinstein & Rubinstein Wins Landmark Tax Case Against NYC

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Rubinstein & Rubinstein, a New York law firm that specializes in asset protection and estate & tax planning, recently won a ground-breaking case against the City of New York.

In an important ruling, the New York City Tax Appeals Tribunal awarded Rubinstein & Rubinstein, LLP a decisive victory against the New York City Tax Department. They determined that the city improperly taxed an upfront, lump-sum payment of rent in a long-term lease.

In the case, Matter of the Petition of Louis M. Hubrecht, TAT (H) 05-10 (RP), Rubinstein's client was the owner of two brownstone buildings on Madison Avenue in Manhattan. The client entered into a net lease for a term of 49 years less one day, in return for a single, upfront rent payment of $7.2 million. The lessee then renovated and developed the buildings into high-end retail space.

The City of New York then assessed Real Property Transfer Tax (RPTT) against the owner of the property, claiming that the $7.2 million payment was not rent but was consideration to obtain the lease because it was paid in a single payment rather than periodically. Rubinstein successfully argued that the legal definition of "rent" does not include a requirement that rent be paid in installments; a long-term lease is not subject to RPTT because the amount paid by the lessee, even if it's upfront at the start of the lease term, constituted rent for the use and occupancy of the property. This decision should pave the way for the proper characterization of rent for tax purposes in long-term leases.

This decision is the latest example of Rubinstein's successful representation of its clients against improper tax assessments. Earlier, Rubinstein scored an important victory against a New York State municipality that had denied the Star Exemption for personal residences owned by Family Limited Partnerships. Rubinstein & Rubinstein was also successful in arguing that real property transfer taxes imposed by the City of New York on transfers of real property from an individual to a Family Limited Partnership were improper. The court held that no transfer taxes were warranted because the transfers were a mere change in identity or form of ownership, while the beneficial ownership of the property remained the same after the transfer to the FLP.

In an earlier matter, Rubinstein also forced the IRS to concede that "asset protection" constituted a valid business purpose for the establishment of a Family Limited Partnership. Rubinstein convinced the IRS that a 33 percent discount in the value of gifted limited partnership interests was fair and reasonable. The Hubrecht decision regarding RPTT is the latest in a string of unbroken tax victories by Rubinstein & Rubinstein.

For more information about Rubinstein & Rubinstein's legal services, visit

About Rubinstein & Rubinstein:
Rubinstein & Rubinstein, LLP has earned a reputation for professionalism, expertise, aggressiveness, attention to detail, and commitment to clients. Their expertise is as diverse as their clientele. Rubinstein & Rubinstein represent high net worth individuals, including well-known entertainment personalities, sports figures, business leaders, corporate executives, physicians, other attorneys, securities brokers, real estate owners, and entrepreneurs. Their practice is truly international and includes individuals and businesses from the Middle East, Canada, the Caribbean, and the United States.

Kenneth Rubinstein, Esq.
Rubinstein & Rubinstein, LLP
18 East 48th Street
New York, NY 10017


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Kenneth Rubinstein, Esq.
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