Legal Question in Real Estate Law in Massachusetts

Re: tax consequences or capital gains

The answer to your question depends on a number of facts not mentioned in your letter. First, did you buy the property subject to any debt or other obligation with respect to a third party or family member.

Did you really buy the property or was it a gift?

The answer to those two questions could have a significant impact on your basis in the property. Also, it could have a gift tax impact on your family.

However, assuming you have held the property for more than 12 months and that your basis is $1.00, you will be subject to a capital gains tax on the property. You should consult with your attorney and your accountant with respect to the determination of your basis in the property and the acutal calculation of the taxes to be paid. I am also assuming you are not selling part of a primary residence, which would have additional tax issues.

I hope this is helpful, but I would consult with my tax advisor before entering into any sales agreement or listing agreement.