Form 561nr - Oklahoma Capital Gain Deduction For Part-Year And Nonresidents

Form 561NR

Oklahoma Capital Gain Deduction for

Part-Year and Nonresidents Filing Form 511NR

Title 68 O.S. Section 2358 and Rule 710:50-15-48

General Information

Individual taxpayers can deduct qualifying gains receiving capital gain treatment which are included in Federal adjusted

gross income. “Qualifying gains receiving capital treatment” means the amount of net capital gains, as defined under

Internal Revenue Code Section 1222(11). The qualifying gain must result from:

1. the sale of the real or tangible personal property located within Oklahoma that has been owned for at least five

uninterrupted years prior to the date of the transaction that gave rise to the capital gain;

2. the sale of stock or an ownership interest in an Oklahoma company, limited liability company, or partnership

where such stock or ownership interest has been owned for at least two uninterrupted years prior to the date of

the transaction that gave rise to the capital gain; or

3. the sale of real property, tangible personal property or intangible personal property located within Oklahoma as

part of the sale of all or substantially all of the assets of an Oklahoma company, limited liability company, or part-

nership or an Oklahoma proprietorship business enterprise where such property has been owned by such entity

or business enterprise or owned by the owners of such entity or business enterprise for a period of at least two

uninterrupted years prior to the date of the transaction that gave rise to the capital gain.

An Oklahoma company, limited liability company, partnership or proprietorship business enterprise is an entity whose

primary headquarters has been located in Oklahoma for at least three uninterrupted years prior to the date of sale.

A capital loss carryover from qualified property reduces the current year gains from eligible property.

Pass-through entities...

Capital gain from qualifying property, as described above, held by a pass-through entity is eligible for the Oklahoma capi-

tal gain deduction, provided the individual has been a member of the pass-through entity for an uninterrupted period of

the applicable two or five years and the pass-through entity has held the asset for not less than the applicable two or five

uninterrupted years prior to the date of the transaction that created the capital gain. The type of asset sold, as shown in

1-3 above, determines whether the applicable number of uninterrupted years is two or five. The pass-through entity must

provide supplemental information to the individual identifying the pass-through of qualifying capital gains.

Installment sales...

Qualifying gains included in an individual taxpayer’s Federal adjusted gross income for the current year which are derived

from installment sales are eligible for exclusion, provided the appropriate holding periods are met.

Specific Instructions

Line 1:

List qualifying Oklahoma capital gains and losses from Federal Schedule D, line 8 or from Federal Schedule D-1, line 8.

In Column A, line A1 enter the description of the property as shown in Federal Column A and on line A2 enter either the

Oklahoma location of the real or tangible personal property sold or the Federal Identification Number of the company,

limited liability company or partnership whose stock or ownership interest was sold. Complete Columns B through F using

the information from the corresponding columns of the Federal Schedule D or D-1. In Column B, enter the date the prop-

erty was acquired. If you entered “VARIOUS” or “INHERITED” on your Federal Schedule D, enter the date you actually

acquired the property. Do not include gains and losses reported on Form 561NR lines 2 through 5.

In Column G enter the qualifying Oklahoma capital gains and losses reported in Column F which were sourced to Okla-

homa on Form 511NR, line 7 “Oklahoma Amount” column.

Line 2:

Column F: If Federal Form 6252 was used to report the installment method for gain on the sale of eligible property on the

Federal return, compute the capital gain deduction using the current year’s taxable portion of the installment payment.

Enclose Federal Form 6252. Capital gain from an installment sale is eligible for the Oklahoma capital gain deduction pro-

vided the property was held for the appropriate holding period as of the date sold.

In Column G enter the capital gain from an installment sale of eligible property reported in Column F which was sourced to

Oklahoma on Form 511NR, line 7 “Oklahoma Amount” column.

Form 561nr - Oklahoma Capital Gain Deduction For Part-Year And Nonresidents - 2008 Page 2

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