
    N. Preston Breed & another
      vs. Commissioner of Revenue.
    October 5, 1981.
    
      
      Elaine C. Breed.
    
   The taxpayers acknowledge that the capital gain was taxable for 1972 Federal income tax purposes. They further acknowledge that according to the literal provisions of the State income tax law this amount was a capital gain which should have been reflected in computing their 1972 State income tax. They disclosed the transaction on their 1972 State income tax return but denied that it produced a properly taxable capital gain. Gross income for Massachusetts income tax purposes is the Federal gross income with modifications not relevant here. G. L. c. 62, § 2(a). Smith v. Commissioner of Revenue, 383 Mass. 139, 140 (1981). The taxpayers’ grievance, articulately presented before us by Mr. Breed, is that because the taxpayers sustained a loss on their investment, they should not be subject to a capital gains tax on the transaction. If partnership losses were not available as deductions in computing State income tax obligations, the taxpayers might have a valid argument that they received no income which could properly be made subject to income taxation pursuant to art. 44 of the Amendments to the Constitution of the Commonwealth. In the circumstances, it was within the constitutional authority of the Legislature to impose a tax on the capital gain of $24,155 realized by the taxpayers. See Parker Affiliated Cos. v. Department of Revenue, 382 Mass. 256, 264-265 (1981). The taxpayers argue that the State income tax law discourages investments in needed residential property because the law lacks certain benefits present in the Federal tax law and taxes the taxpayers’ capital gains at a higher rate than it taxes the income from which partnership losses were deductible. These arguments are for the Legislature. They do not present a case for the unconstitutionality of the tax imposed in this case. The decision of the Appellate Tax Board is affirmed.

N. Preston Breed, pro se.

Gerald J. Caruso, Assistant Attorney General, for the defendant.

So ordered.  