In This Issue:

Divided Appellate Division Affirms Tribunal’s Gaied “Permanent

Place of Abode” Decision; Combined Reporting Permitted by ALJ Despite Absence of Substantial Intercorporate Transactions; Commissions Paid to Real Estate Brokers Held Subject to UBT Addback; Costs Denied to Two Victorious Taxpayers; Department Adopts Amendments to Combined Return Regulations; Insights in Brief.

Excerpt from Divided Appellate Division Affirms Tribunal’s Gaied “Permanent Place of Abode” Decision -

A divided Appellate Division has affirmed a controversial Tax Appeals Tribunal decision holding that Staten Island residential property owned by a New Jersey resident and occupied by his parents constituted his “permanent place of abode,” and made him a “statutory resident” of New York. Matter of John Gaied v. Tax App. Trib., 2012 NY Slip Op. 9108 (3d Dep’t, Dec. 27, 2012). After initially holding that the multifamily residence owned by Mr Gaied and occupied by his parents (and also partially leased to tenants) was not occupied by Mr. Gaied, and therefore was not his permanent place of abode, the Tribunal granted the Department’s motion for reargument. Following reargument, the Tribunal reversed its earlier decision, and held that the Staten Island property was the individual’s permanent place of abode. Matter of John Gaied, DTA No. 821727 (N.Y.S. Tax App. Trib., June 16, 2011). The Tribunal concluded that its earlier decision was in error because “where a taxpayer has a property right to the subject premises, it is neither necessary nor appropriate to look beyond the physical aspects of the dwelling place to inquire into the taxpayer’s subjective use of the premises.” The Tribunal’s decision seemed to hold that as long as the taxpayer owns and maintains the property, it is not necessary to examine any other factors.