FACTS: Hero Hospital saves the life of a patient who thereafter conveys real property in Chelmsford to the hospital out of gratitude. The deed recites that it is given in exchange for $1.00 and other valuable consideration. The property in worth $100,000 and is fully paid for.

ISSUE: Is a transfer of real estate as a gift subject to the Massachusetts deeds excise?

DISCUSSION: Massachusetts imposes an excise upon the transfer of any deed, instrument or other writing whereby realty sold is conveyed to a purchaser. G.L. c. 64D, § 1. The excise is based upon the consideration given for the property and applies whenever the consideration, exclusive of any lien or encumbrance remaining on the property, is greater than $100. The tax is paid by the person making or signing the deed and is evidenced by an affixed stamp. As of July 1, 1989, the tax is $2.00 for each $500, or fraction, of consideration plus an additional tax of 14% of the tax imposed, i.e., $2.28/$500, except in Barnstable County where the rate, including surtax, is $2.85/$500. The rates are currently scheduled to change on July 1, 1992.

The tax applies, however, only to those transactions in which realty is "sold". G.L. c. 64D, § 1. It does not apply to deeds given without consideration, including deeds conveying realty as bona fide gifts, even though the deed may recite a consideration for the transfer such as "natural love and affection and $1.00," "desire to promote public welfare and $1.00," or "$1.00 and other valuable consideration."

Here, the realty was conveyed to the hospital as a bona fide gift. Accordingly, the deeds excise does not apply.

DIRECTIVE: Since the deeds excise does not apply to bona fide gifts, the transferor will not owe a deeds excise when he conveys the realty to the hospital.

REFERENCE: G.L. c. 64D, § 1.

/s/Stephen W. Kidder
Stephen W. Kidder
Commissioner of Revenue

December 11, 1989

DOR-D 89-16


This Directive represents the official position of the Department of Revenue on the application of the law to the facts as stated. The Department and its personnel will follow this Directive, and taxpayers may rely upon it, unless it is revoked or modified pursuant to 830 CMR 62C.01(5)(e). In applying this Directive, however, the effect of subsequent legislation, regulations, court decisions, Directives, and TIRs must be considered, and Department personnel and taxpayers may rely upon this Directive only if the facts, circumstances and issues presented in other cases are substantially the same as those set forth in this Directive.