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; or

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 sale.

An Oklahoma company, limited liability company or partnership 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

capital 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 and 2 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 us-

ing the information from the corresponding columns of the Federal Schedule D or D-1. 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 - 2007 Page 2