Case Updates
California Supreme Court Accepts Review of Documentary
Transfer Tax Case In our last quarterly
update, we reported on a controversial opinion recently
published by a California Court of Appeal. In 926 North Ardmore
Avenue, LLC v. County of Los Angeles,1 the court
held that when there is a change in control of a legal entity
directly or indirectly owning real property, the sale of the
ownership interests in the legal entity constitutes realty sold for
purposes of the documentary transfer taxes imposed by Los Angeles
County and the City of Los Angeles.
The decision rattled taxpayers and practitioners alike because
the court reached its conclusion by basing its interpretation of
the documentary transfer tax statute on property tax legislation
enacted long after the enactment of the documentary transfer tax.
It equated the documentary transfer tax concept of "realty
sold" with the property tax concept of "change of
ownership," notwithstanding that the
