NONPUBLIC RESIDENTIAL HEALTH CARE FACILITIES NEED PERMISSION TO WITHDRAW EQUITY OR TRANSFER ASSETS IN EXCESS OF 3% OF THE FACILITIES’ REVENUE; CORPORATE OWNERS NEED NOT INCLUDE FEDERAL AND STATE INCOME TAXES IN THE 3% CALCULATION; FACILITIES OWNED BY PASS-THROUGH ENTITIES (I.E., LIMITED LIABILITY COMPANIES) MUST INCLUDE FEDERAL AND STATE INCOME TAXES IN THE 3% CALCULATION (THIRD DEPT).
The Third Department, in two full-fledged opinions by Justice Lynch, determined that nonpublic residential health care facilities owned by pass-through entities (i.e., a limited liability company, S corporation, partnership or sole proprietorship) must include federal and state income taxes in the calculation of equity withdrawals. Public Health Law 2808 (5) prohibits the withdrawal of equity or transfer of […]