The market is booming. You received an offer you couldn't refuse and cashed in on the 10% interest you have been holding in that New York City real estate partnership. You don't know the buyer, but your attorney confirmed you have no restrictions on who you can sell to and the price is right. The deal is closed. You receive a $5 million check in exchange for your 10% interest and increase your federal and state estimated tax payments accordingly.
Two and one half years later, New York City's Department of Finance sends you a certified letter citing this transaction and requesting you remit the transfer tax immediately. The combined City and State rates would come to 3.025% of the selling price of the "real property" or $162,500. Adding in interest and penalties to date, the total is well north of $250,000.