May 20, 1980

You ask whether gain resulting from the liquidation of a Massachusetts realty trust with transferable shares of beneficial interest (a "corporate trust" as defined in Massachusetts General Laws Chapter 62, Section 1), is taxable to the trust, to the shareholder, or to both.

Under the proposed plan of liquidation, the real estate and any other assets owned by the trust will be distributed to the sole shareholder.

A Massachusetts corporate trust is subject to taxation under Chapter 62 of the Massachusetts General Laws. Under the federal Internal Revenue Code, the trust is an association taxable as a corporation.

For purposes of taxation of the shareholder, the liquidation will be governed by Section 331 of the Internal Revenue Code, which states that amounts distributed in complete liquidation are considered as received in full payment for the trust's assets.

Based on the foregoing it is ruled that:

1. The distribution of the assets of a Massachusetts corporate trust in complete liquidation of the trust, will not result in the recognition of gain or loss to the trust for Massachusetts income tax purposes.

2. The shareholder will realize gain or loss upon receipt of property distributed to him in liquidation of the trust.

3. The shareholder's gain or loss will be measured by the difference between the fair market value of the property received and the shareholder's basis in the shares.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH/RSF/jmcd

LR 80-26