Reporting for Like-kind Exchanges

(a) Notification to Commissioner of Amount of Deferral . Withholding is not generally required for Transfers that qualify under the provisions of Code § 1031 on the amount of any gain that is deferred for Massachusetts tax purposes. To avoid withholding on any gain that is deferred, the Transferor must provide the Withholding Agent with a statement on the Transferor’s Certification acknowledging the amount of gain that has been deferred and consenting to personal jurisdiction in Massachusetts for the determination and collection of taxes and related interest, penalties, and fees that will be due when the gain is realized.

(b) Withholding Required on Gain Recognized under Code § 1031(b) Property. Withholding is required on any gain that is recognized under Code § 1031(b), as adjusted for Massachusetts tax purposes, even if the Transfer qualifies as a like-kind exchange.

(c) Transferor Must Qualify for the Deferral. If at the time of Closing an exchange appears to qualify as a like-kind exchange, but subsequently fails to meet the requirements of Code § 1031, the Transferor must notify the Commissioner in writing within ten days of the expiration of the statutory periods specified in Code § 1031(a)(3) and remit the applicable payment equal to the withholding amount that would have been required under 830 CMR 62B.2.4 in an estimated payment next due in accordance with the payment due dates under M.G.L. c. 62B, § 14 and M.G.L. c. 63B, §§ 4A or 4B, as applicable.