October 1, 1980

Chapter 409 of the Acts of 1979 repealed General Laws Chapter 62, Section 7, effective January 1, 1980. You inquire as to the basis for Massachusetts income tax purposes of property acquired previous to this date and sold subsequently.

Under General Laws Chapter 62, Section 7, Massachusetts adjusted basis equaled federal adjusted basis modified to reflect the dissimilarity between the federal and state determinations of gross income. Repeal of that section results in the adoption of federal adjusted basis in determining gain or loss for purposes of the Massachusetts income tax in 1980 and subsequent years.

Based on the foregoing, it is ruled that the Massachusetts basis of property held on December 31, 1979 and sold or exchanged thereafter is the federal adjusted basis of such property.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH:DMH:mf

LR 80-63