Form 4797n - Nebraska Special Capital Gains/extraordinary Dividend Election And Computation - 2014 Page 5
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6Shares acquired while employed can be either shares received from the corporation as compensation, shares received for
retirement purposes, or shares the employee acquired on their own in the open market. If the shares were not acquired while
employed, they must have been acquired on account of employment. For the shares to have been acquired on account of
employment, the employee must have received a vested right to the shares from the corporation while employed. An option
from the employer that is considered to be compensation that can be exercised without any additional payment would be on
account of employment.
Income from the sale or exchange of capital stock owned by the spouse or descendant will only qualify for the exclusion if the
employee could have taken the exclusion for the same shares if the employee still owned them. To qualify, shares owned by
the spouse or descendant must have been received as a gift from the employee while the employee was alive. Any shares that
are inherited or received because of the death of the employee, such as a testamentary trust, do not qualify for the exclusion.
Page I — General Instructions
Multiple Sales of Capital Stock from One Employee. When multiple sales of capital stock from one employee were
made during the tax year, combine all sales onto a single Page 1 to determine the exclusion.
Sales of Capital Stock from More than One Employee. When multiple sales of capital stock from more than one
employee were made during the tax year, whether the spouse is also an employee or the capital stock was gifted, complete a
separate Page 1 for each employee’s capital stock. The separate Page 1's must be completed through line 3. Then, consolidate
the amounts on lines 4 through 8 on a single Page 1.
Multiple Extraordinary Dividends. One extraordinary dividend may be included on the same Page 1 as a special
capital gains exclusion if it is from capital stock from the same employee. A separate Page 1 is required for each additional
extraordinary dividend declared during the year.
Page I — Specific Instructions
Name of Person Making Election. If the election is being made on this return, enter the phrase “See Part I.” If an election
was previously made, attach a copy of the Form 4797N where the initial election was previously made either by you or the
qualified person.
Name of the Corporation Issuing the Capital Stock or Declaring the Extraordinary Dividend. Enter the name
of the corporation that issued the capital stock or declared the extraordinary dividend. If capital stock issued by more than
one corporation is included under the same election, list the names of all corporations. If this information is the same as what
you entered on line 2 of Part I, enter “Same as line 2 of Part I.”
If the name of the corporation which issued the stock or declared the extraordinary dividend is different than the corporation
name appearing on line 2 of Part I, attach an explanation as to how the corporations are related, and why the gain or dividend
being excluded qualifies for the income exclusion.
Description of the Capital Stock or the Extraordinary Dividend. Enter the description of the capital stock (for
example, “sold 100 shares of 7% preferred voting stock”). If you are claiming an extraordinary dividend, please enter a
detailed description of the dividend transaction. If this information is the same as what you entered on line 3 of Part I, enter
“as line 3 of Part I.”
If the Capital Stock Was Not Acquired While Employed. If the date the capital stock was acquired is not during
employment dates, attach an explanation of how the capital stock was acquired because of either employment or while
employed by the corporation.
Line 1, Sales Price of the Capital Stock. Enter the sales price of the capital stock as shown on the Federal Form 8949.
If a broker advised that the gross proceeds (gross sales price) less commission and option premium were reported to the
Internal Revenue Service, enter the net amount on line 1. Do not include the commission and option premium on line 2.
Line 2, Cost or Other Basis in Capital Stock. In general, the “cost or other basis” is the cost of the capital stock as
shown on the Federal Form 8949. If cash cost was not used as a basis, attach an explanation of your basis.
When selling capital stock, adjust your basis by subtracting all the nontaxable distributions received before the sale. Also,
adjust the basis for any stock splits.
Increase the basis by any expenses of the sale such as broker’s fees, commissions, and option premiums before making an
entry on line 2, unless net sales price was reported on line 1.
LINE 3, Capital Gains on Sales of Capital Stock During this Year. Enter the amount of the capital gains on
qualifying capital stock transactions this year.
1. Distributions considered ordinary income or reported on Form W-2, and not on Federal Form 8949, do not qualify.
2. Losses on the qualifying capital stock must be netted against gains on the qualifying capital stock to determine the
amount to enter on line 3.
LINE 4, Capital Gains Exclusion Deferred from a Prior Year. Enter the amount of the qualified capital gain on
transactions in prior years that was carried forward.
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