A Delaware limited liability company (DE LLC) owns only Maryland real property with a value of $10,000,000. A New Jersey corporation (NJ Corp) owns all of the membership interest in DE LLC, which represents 100 percent of NJ Corp's assets. A California corporation (CA Corp) owns all of the stock of NJ Corp and all of the membership interest in a Florida limited liability company (FL LLC), which represents 100 percent of CA Corp's assets. FL LLC owns only Florida real property valued at $1,000,000. The following apply:
- A. The transfer of DE LLC's membership interest is subject to recordation and transfer taxes in Maryland under Tax-Property Article, §12-117, Annotated Code of Maryland;
- B. The transfer of the stock of NJ Corp is subject to recordation and transfer taxes in Maryland under Tax-Property Article, §12-117, Annotated Code of Maryland;
- C. The transfer of the stock of CA Corp is subject to recordation and transfer taxes in Maryland under Tax-Property Article, §12-117, Annotated Code of Maryland, because 80 percent of its assets are still Maryland real property; and
- D. In §C of this regulation, if FL LLC owns only Florida real property valued at $5,000,000, the transfer of the stock of CA Corp is not subject to recordation and transfer taxes in Maryland under Tax-Property Article, §12-117, Annotated Code of Maryland, because CA Corp would no longer be a real property entity.
Authority: Tax-Property Article, §§12-201, 12-103, 12-112, 12-117, and 13-202, Annotated Code of Maryland
Effective date: June 30, 2008 (35:13 Md. R. 1181)