For the purpose of 830 CMR 62B.2.4, the following terms shall have the following meanings unless the context requires otherwise:
Adjusted Basis. A reasonable estimate of the amount treated as basis for Massachusetts tax purposes under M.G.L. c. 62 for purposes of the personal income tax or M.G.L. c. 63 for purposes of the corporate excise. The adjusted basis for the purposes of 830 CMR 62B.2.4 may not be equal to the adjusted basis the Transferor uses to file the Transferor’s Massachusetts income tax return. The sum of the acquisition cost of the property to the Transferor, or the Transferor’s share of the fair market value of the property at the date of death for inherited property, and the Transferor’s costs for any major improvements to the property shall be considered a reasonable estimate of the amount treated as basis for Massachusetts tax purposes.
Closing. The date of Settlement.
Code. The Internal Revenue Code, as defined under M.G.L. c. 62 for purposes of the personal income tax or as defined under M.G.L. c. 63 for purposes of the corporate excise.
Commissioner. The Commissioner of the Department of Revenue, or the Commissioner’s duly authorized representative.
Gross Sales Price. The sum of: (i) cash paid or to be paid, excluding interest or original issue discount as defined in Code § 1273, (ii) the fair market value of other property transferred or to be transferred, and (iii) the outstanding amount of any liability assumed by the transferee or to which the real estate is subject immediately before and after the transfer. “Gross sales price” encompasses the entire transaction, including all payments made or to be made pursuant to an installment transaction.
Installment Transaction. A transaction that is subject to installment sale treatment under M.G.L. c. 62, § 63.
Maintains a Place of Business in Massachusetts. In the context of a business entity, is organized under Massachusetts law; is registered with the Secretary of State to do business in Massachusetts; or maintains a place of business in Massachusetts at which the entity carries on its business in a regular and systemic matter and which is consistently maintained, occupied and used by employees of the entity.
Net Gain. The gross sales price from the Transfer, reduced by the sum of the adjusted basis of the property sold and the expenses that directly relate to the Settlement.
Pass-Through Entity. An entity whose income, gains, losses, deductions, and credits flow through to members for Massachusetts tax purposes, including a partnership, an S corporation, an estate, and a trust not taxed at the entity level. An entity that is disregarded for tax purposes, such as a grantor-type trust or single-member limited liability company, or a trust that does not pass through to its beneficiaries all of the gain from the sale of Real Estate is not considered a pass-through entity for purposes of 830 CMR 62B.2.4.
Publicly Traded Partnership. An entity treated as a publicly traded partnership under Code § 7704(b).
Real Estate. Any interest in real property located in Massachusetts and treated as an interest in real property under Code §§ 897(c)(1)(A) and 897(c)(6).
Secretary of State. Secretary of the Commonwealth of Massachusetts.
Settlement. The passage of the deed and title to real estate from the Transferor to the Transferee.
Transfer. The sale or conveyance of real estate for consideration.
Transferee. The buyer or person who takes ownership of real estate by sale, exchange, or any other Transfer.
Transferor. The seller or person who transfers ownership of real estate by sale, exchange, or any other Transfer. In the case of a Transfer by an entity that is disregarded for tax purposes, such as a trust not taxed at the entity level, including a grantor-type trust entity, the Transferor is the beneficial owner of such entity.
Transferor’s Certification. A certification that a Transferor must complete and provide to the Withholding Agent for any Transfer in which the gross sales price equals or exceeds the Withholding Threshold. The certification shall be provided using a form promulgated by the Commissioner.
Withholding Agent. The person responsible for closing a real estate transaction, including an attorney, escrow company, or title company, or any other person who receives and disburses the consideration or value for a Transfer of Real Estate.
Withholding Threshold. The gross sales price at or above which a Transfer is subject to the withholding requirements under 830 CMR 62B.2.4. For purposes of 830 CMR 62B.2.4, the Withholding Threshold is $1,000,000.