Legal Question in Real Estate Law in Massachusetts

Capital Gains Tax question

I have a 2 family house that 7 years ago was transferred to my wife and I from my Mother. At the time we paid her $10,000. The house was valued at appr. $170,000 at the time. We have lived there since with my Mother in the other apartment. If we sell, current value around $560,000, what sort of Capital gain taxes could we expect? We have put about $60000 into this house since the transfer. I have heard if you live at the property for over 2 years this tax will not apply. We are planning to buy a Condo for my Mother and a house for us.

Thanks for your help and this great resource.


Asked on 7/12/05, 9:47 am

1 Answer from Attorneys
Len Foy NH Residential Title & Escrow

Re: Capital Gains Tax question

Hi -

Yes, if it's a primary residence and the sales price is $500,000 or less ($250K for each spouse when the seller is a married couple), however, it being a two-family, the fact that you've received rental income from the other unit (if you have) might result in this particular exemption not being available to you.

You might consider what's called a 1031 exchange, or a different tax strategy - my name is Len Foy and I am a real estate lawyer with Gould & Gould, our law firm has offices in NH and Mass - our number is (603) 434-3437, I hope to hear from you -

Regards and Good Luck -

Len Foy

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Answered on 7/17/05, 1:02 pm


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