Q: Sometime last year, you wrote about the Montgomery County recapture tax. At that time you suggested that home sellers protest this tax since it was being challenged by the Montgomery County Board of Realtors. What is the status of that suit?

A: Unfortunately for sellers in the county, Circuit Court Judge Joseph Mathias recently upheld the validity of the recapture tax. And although the realtors are appealing this decision, at the present time sellers must take this tax into consideration when figuring out the bottom line on the sales proceeds.

In legal terms, the real property tax recapture is "applicable to any transfer of property or portion thereof when the taxable value as of the date of recognition (transfer date) exceeds the assessed valuation of such property."

In simple English this means that you, the seller, are responsible to pay a tax if your selling price was higher than the assessment on which your real estate taxes have been based.

There is a rather complex formula that can be found on the "real property tax recapture form," which must be filed when a deed to property in Montgomery County is recorded in the county courthouse.

Basically, the tax applies only in those cases where there is a big difference between the assessed valuation for tax purposes and the sales price.

To determine whether you will have to pay this recapture tax, here is the formula:

1. Calculate 40 percent of your contract sales price.

2. Subtract the assessed value. Call the Finance Office (279-1701 or 279-1601) for this figure.

3. Subtract $8,000 (an initial exemption).

4. If there remains a balance, the recapture tax must be paid, and it is based on a rate of $3.07 per $100.

It is recommended that all sellers of property in Montgomery County pay the recapture tax, if applicable, under protest. Thus, every seller of a property for which a tax is due should write on the form, "We protest this tax." Maybe, if the appellate courts find this tax invalid, sellers in Montgomery County will get their money back.