Feb 7, 2019

Selling a Corporation – Asset vs. Stock Sale?

Asset Sale vs. Stock Sale

The 2017 Tax Act creates new opportunities for asset sales, particularly for sellers of businesses that are carried on in corporate form. Whenever a business owned by a corporation is sold, the parties have to negotiate whether the transaction will be structured as an asset sale or a stock sale. For tax purposes, asset sale treatment is generally more attractive to a buyer and may induce a buyer to pay a premium over what it would pay for a stock purchase. Conversely, an asset sale will usually trigger higher tax expense to the seller.  Prior to the recent tax law… Read more


Dec 26, 2007

Amendment to the 80/20 Rule

NYC Condos

On December 20, 2007, President Bush signed into law legislation dramatically liberalizing the so-called “80/20 Rule” restricting the amount of non-shareholder income cooperatives may receive.[1]  As a practical matter, the legislation will eliminate commercial income restrictions for most cooperatives. Under the former rule, in order for a cooperative shareholder to receive the tax benefits normally afforded a homeowner, the cooperative could receive no more than 20% of its income from non-shareholder sources.  As a result of this rule, cooperatives controlling substantial commercial space have often capped the rents payable by their commercial tenants below market rents in order to keep… Read more


Apr 28, 2006

Board Elections and Shareholder Status

NYC Conference Room with a View

As we enter the season when many cooperatives and condominiums hold their annual meetings, it is important to make certain that the election of board members is conducted properly.   Sometimes this can be difficult, especially in buildings that have contradictory or ambiguous by-law provisions.  These uncertainties lead to acrimony and, occasionally, to litigation. As an example of ambiguity, one provision may simply require that to become a board member the candidate must be a resident of the building (or sometimes just a resident of the state) and over 18 years of age, but not require that the candidate be a… Read more


May 21, 2003

“Objectionable” Shareholders

signing lease

This memorandum was initially issued by the cooperative/condominium practice group of Balber Pickard Maldonado & Van Der Tuin, PC which joined Smith, Gambrell & Russell, LLP on February 1, 2017 and now practices as part of SGR’s cooperative/condominium practice group. We are pleased to report that the New York Court of Appeals in 40 West 67th Street Corp. v. Pullman unanimously affirmed the decision our firm obtained last May from an intermediate appellate court.  As you may recall, in that decision, a divided court upheld a cooperative’s right to terminate a shareholder’s proprietary lease on account of “objectionable” conduct.  This… Read more