Empire State Building IPO change may help pay tax NEW YORK (Reuters) - The controller of the Empire State Building has offered investors the opportunity to sell some of their shares and relieve some of the expected tax burden if a proposed initial public offering is approved before the end of the year, according to a federal filing on Tuesday. But that may not be enough to help the 2,824 investors pay what could be a tax liability somewhere between $50,000 and more than $100,000 depending on the pricing of the IPO shares and where the investor lives. Malkin Holdings LLC, which controls the U.S. skyscraper, has slightly bowed to pressure from investors by allowing them to sell between 19.5 percent and 17 percent of their shares if the IPO occurs before December 31, according to the amended IPO form filed on Tuesday with the U.S. Securities and Exchange Commission. They can sell another 30.5 percent to 33 percent after the first 180 days of trading for a total of 50 percent, according to one of two IPO-related documents filed with the SEC on Tuesday. That's up from a 180-day lock-up originally proposed, but it still may not be enough to persuade the investors to vote to allow the building to be part of a larger planned real estate investment trust, to be called Empire State Realty Trust Inc. Some investors and their advisors said the tax bill on the investment made in 1961 for $10,000 per unit could be more than $100,000 a unit. Approval after October would not likely give them nearly enough cash to pay the taxes on the investment. In addition, the price of REIT's shares could fall between the offering and when the lock-up expires, as often they do when thousands of stockholders can sell their shares. That would leave less to use to satisfy the Internal Revenue Service. "We still have to worry about the REIT share price to pay taxes due by April 15th next year" said Richard Edelman, whose father was one of the original investors. Why would anyone trade a solid investment in the Empire State Building for that kind of risk? Edelman has set up a web site, Empirestatebuildinginvestors.com, to inform investors, some of whom are unhappy with the proposed IPO. Over 400 have visited the site, he said. Should the IPO not occur before December 31, 2012, the sale allowance is off the table, according to the filing. A spokesman for Malkin Holdings President Anthony Malkin said: "We are presently in a quiet period and are therefore unable to comment." The proposed IPO structure gives Malkin and his family tax protection, including $83 million to cover possible taxes, according to one of the filings. Five lawsuits have been filed against the proposed IPO and against Malkin and Malkin Holdings. The plaintiffs have moved to consolidate the suits into one class action, a move Malkin Holdings said it did not oppose, according to one of two Tuesday filings with the SEC. Malkin Holdings intends to fight the suit. The law suits contend that Malkin Holdings and the Helmsley estate, which share a company that leases the building for about 60 more years, incorrectly assumes that they own the Empire State Building and well as several others in the 18-property proposed REIT. Malkin Holdings and the family are expected to reap more than $641.7 million from the IPO, according to the filing. The Helmsely estate, which is expected to be the biggest winner, about $1 billion in cash and marketable securities. As a charity, it is tax free. Should the IPO not occur, the Helmsley estate intends to sell its interests, according to one of the filings. Malkin said that a buyer of the stake could "adversely affect the value" investors have in the building. The Empire State Building is currently undergoing a $550 million modernization program. Reporting by Ilaina Jonas; Editing by Eric Meijer