In an issue of first impression under the New York City real property transfer tax, an Administrative Law Judge has upheld the taxation of a transfer of a 45% membership interest in a limited liability company (“LLC”) owning real property that followed the transfer of a fee owner’s 45% fee interest in the realty to the LLC in exchange for a 45% LLC interest. Matter of GKK 2 Herald LLC, TAT(H) 13-25 (RP) (N.Y.C. Tax App. Trib., Admin. Law Judge Div., Apr. 1, 2015). Upholding application of the “step transaction” doctrine, more typically invoked in income tax cases, the ALJ held that the doctrine overcame both a “mere change in form” exemption for the first step (the transfer of a 45% fee interest to the newly formed LLC) and the less than controlling interest transfer in the LLC constituting the second step (the transfer of a 45% LLC interest). An exception has been filed by the taxpayer with the New York City Tax Appeals Tribunal.