We've run into a situation relating to NY transfer taxes. The first part is, since the lender is required to pay .25% of the tax, does the full transfer tax get disclosed on the LE or just the amount less what the lender is required to pay? On the CD is it okay to put the portion the lender is required to pay as "Paid by Other" (no Lender designation)? The problem we run into is if there a general lender credit on the loan and we designate the NY tax that is paid by the lender as "paid by lender", then it reduces the amount the of the overall lender credits and shows that the customer has to being more cash to closing.

Our thought is we list the entire amount of the transfer tax on the LE. On the CD we put the portion that the lender has to pay as paid by other. Is this acceptable?

It's not only acceptable -- it's the preferred way to do it. The Reg requires that the CD include all costs regardless of who pays them, but you get to split out the parts of those costs being paid by the seller and the bank, for example. In that way, you show the full cost of the transfer tax. So, since this isn't a recording fee, you will include a separate line in section F for New York Transfer Tax, splitting the dollar amount into the part paid by the seller (in the seller at closing column) and the part paid by the bank in the paid by others column. You can optionally "tag" the lender amount with (L) to identify it as a specific lender credit. You do not need to show to total amount of the transfer tax anywhere, but I have seen similar entries with the total amount in the description line (for example "NY State Transfer Tax - $19,500". (If the property is also subject to NYC transfer tax, you will have two lines - one for the state and one for the city.)

I've based my response on an understanding that the seller is legally required to pay the transfer tax unless the sales contract assigns the responsibility otherwise. The buyer only pays if the seller fails to pay it. If that is correct, you would not include the transfer tax on the LE at all.

Thank you!