Q: How to fill New York State form IT2663 for title transfer into revocable living trust for foreigner.
I am a non-US citizen. I own a condo in NYC which is not my primary residence. I want to transfer this condo into my revocable living trust (domestic). My attorney filled out form TP584 as a conveyance without consideration. Therefore, no transfer tax is due. At the end of this form, it states that unless I can claim an exemption (which I cannot), I need to file form IT2663. However, as the transfer into the trust should not trigger any tax consequences, do I even need to file IT2663? If I do, do I just fill it out as a transfer at the same cost basis with no gains (or perhaps even losses given the legal costs), and therefore no estimated tax is due? Lastly, does this transfer into a trust trigger any FIRPTA withholding?
A: A revocable trust's assets are still your tax responsiblity, e.g. property taxes, because it is revocable. The form you are filing suggests you are getting income from the property and that is taxable. If you have no confidence in your atorney, you should obtain another one. Do so or take your attorney's advice.
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A:
Transferring your NYC condo into your revocable living trust is generally considered a non-taxable event since there's no sale or consideration involved. However, New York requires Form IT-2663 when real property is transferred by a nonresident unless an exemption applies. Since your transfer is not exempt under the form’s listed exclusions, you may still need to file it, even if no tax is due.
When completing IT-2663, you can report the transfer at your original cost basis, showing no gain if the value remains the same. Legal fees alone wouldn’t typically create a deductible loss for this form. If no gain arises, there would be no estimated tax due, but filing may still be required for compliance. Attaching an explanation of the transaction may help clarify the non-taxable nature of your transfer.
Regarding FIRPTA, a transfer into your revocable living trust shouldn’t trigger withholding because there’s no actual sale or change in beneficial ownership. FIRPTA applies primarily to sales of U.S. real estate by foreign persons, and a revocable trust is typically disregarded for tax purposes. However, ensuring proper documentation of the trust's revocability and your continued control over the property can help avoid potential complications.
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