Oklahoma Capital Gain Deduction (for residents filing Form 511)

Capital Gain Deduction (for residents filing Form 511)
2023 Form 561 Oklahoma Capital Gain Deduction for Residents Filing Form 511
State of Oklahoma

FORM

Oklahoma Capital Gain Deduction
for Residents Filing Form 511

(Qualifying Assets Held for the Applicable 2 or 5 Year Period)

561

Social Security Number

Name(s) as Shown on Return
1.	 List qualifying Oklahoma capital gains and losses, not included on lines 2 through 5 below.
A1. Description of Property:
A2.	 Oklahoma Location/Address
or Federal ID Number:

	

B. 	 Date
	Acquired
	(mm/dd/yy)

C. Date Sold
	 or Disposed
	(mm/dd/yy)

D.	Proceeds
	 (Sales Price)

E. 	 Cost or
Other Basis minus
Adjustments to
Gain or Loss

F. 	 Gain or (Loss)
Combine Columns
(D) and (E)

C. Date Sold
	 or Disposed
	(mm/dd/yy)

D.	Proceeds
	 (Sales Price)

E. 	 Cost or
Other Basis minus
Adjustments to
Gain or Loss

F. 	 Gain or (Loss)
Combine Columns
(D) and (E)

C. Date Sold
	 or Disposed
	(mm/dd/yy)

D.	Proceeds
	 (Sales Price)

E. 	 Cost or
Other Basis minus
Adjustments to
Gain or Loss

F. 	 Gain or (Loss)
Combine Columns
(D) and (E)

(See instructions)

A3. Type of property sold:
(see instructions)
A1. Description of Property:
A2.	 Oklahoma Location/Address
or Federal ID Number:

	

B. 	 Date
	Acquired
	(mm/dd/yy)
(See instructions)

A3. Type of property sold:
(see instructions)
A1. Description of Property:
A2.	 Oklahoma Location/Address
or Federal ID Number:

	

B. 	 Date
	Acquired
	(mm/dd/yy)
(See instructions)

A3. Type of property sold:
(see instructions)

2.	 Qualifying Oklahoma capital gain from installment sales reported on Federal Schedule D,
	
line 11. (Provide a copy of Federal Form 6252.)
		
Type of property sold (See instructions).............	

....... 2

3.	 Qualifying Oklahoma net capital gain from sale of business property reported on Federal Schedule D,
line 11. (Provide a copy of Federal Form 4797. If gain/loss is from a Federal K-1, complete
	
the worksheet on page 2 and provide a copy of the Federal Schedule K-1.)
		
Type of property sold (See instructions).............	
....... 3
4.	 Other qualifying Oklahoma net capital gain or (loss) reported on Federal Schedule D, line 11, not
	
included in lines 2 and 3 above. (Provide a copy of the applicable Federal form[s].)
		
Type of property sold (See instructions).............	

....... 4

5.	 Qualifying Oklahoma net capital gain or (loss) from partnerships, S corporations, estates
	
or trusts reported on Federal Schedule D, line 12. (Complete the worksheet on page 2 and
	
provide a copy of the Federal Schedule K-1.)
			
Type of property sold (See instructions).............	

....... 5

6.	 Add amounts in Column F on line 1 and lines 2 through 5........................................................................... 6
7.	 Qualifying Oklahoma capital loss carryover reported on Federal Schedule D, line 14
	
(See instructions) ......................................................................................................................................... 7
8.	 Qualifying Oklahoma net capital gain. Subtract line 7 from line 6.
	
(If zero or less, enter “0”.).............................................................................................................................. 8
9.	 Oklahoma net capital gain included in Federal adjusted gross income.
	
See instructions and worksheet. (If zero or less, enter “0”.)......................................................................... 9
10.	 Oklahoma Capital Gain Deduction. Enter the smaller of lines 8 or 9 here and on Form 511,
	
Schedule 511-A, line 12. (Do not enter less than zero.)............................................................................... 10

Provide Federal Form 1040, Schedule D and Form(s) 8949.

2
0
2
3

2023 Form 561 - Page 2

Oklahoma Capital Gain Deduction
for Residents Filing Form 511
68 OS Sec. 2358 and Rule 710:50-15-48

Worksheets - (Provide with Form 561)
Social Security Number

Name(s) as Shown on Return

Form 561 Worksheet for (check one): 	

Line 3	

or 	

Line 5

Complete a separate worksheet for each piece of property sold. Provide a copy of the Federal Schedule K-1.
Name of pass-through entity:_________________________________________ 	FEIN: _______________________
Description of property sold:_______________________________________________________________________
Location of property:_____________________________________________________________________________
Date acquired:_______________________________________ Date sold:___________________________________
Date(s) you acquired ownership in the pass-through entity:_______________________________________________

Form 561 Worksheet for Line 9
Refer to the instructions for Form 511, line 4 and Form 511, Schedule 511-B, line 2 to determine
what gains and losses are considered “out-of-state”. (Generally, sale of an intangible, such as stock, is
not considered out-of-state.)

A

Net Short-Term Capital Gain (or loss) from Federal Schedule D, line 7

B

Add Out-of-State Capital Losses included in line A above

+

C

Subtract Out-of-State Capital Gains included in line A above

-

D

Net Oklahoma Short-Term Capital Loss (if greater than zero, enter “0”)

E

Net Long-Term Capital Gain (or loss) from Federal Schedule D, line 15

F

Add Out-of-State Capital Losses included in line E above

+

G

Subtract Out-of-State Capital Gains included in line E above

-

H

Net Oklahoma Long-Term Capital Gains (if less than zero, enter “0”)

I

Oklahoma Net Capital Gain - Enter on the front of form on line 9
(combine lines H and D) (if less than zero, enter “0”)

NOTE: For U.S. Government and municipal bonds, which are exempt from Oklahoma tax, include any capital gain on the
Out-of-State Capital Gains line (Line C or G) and any capital loss on the Out-of-State Capital Losses line (Line B or F).

General Information
Individual taxpayers can deduct qualifying gains receiving capital gain treatment that 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 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;

2023 Form 561 - Page 3

Oklahoma Capital Gain Deduction for Residents Filing Form 511
68 OS Sec. 2358 and Rule 710:50-15-48
General Information - continued

	

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 partnership 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 (PTE) is eligible for the Oklahoma capital gain
deduction, provided the individual has been a member of the PTE for an uninterrupted period of the applicable two or five years and the
PTE 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 PTE must provide supplemental information to the individual identifying the pass-through of qualifying capital gains.
NOTE: If you are a member, either directly or indirectly, of an electing PTE the capital gain/loss from the PTE which is covered by the
election pursuant to the provisions of the Pass-Through Entity Act of 2019 is not entered on this form to compute your Oklahoma Capital Gain Deduction. The gain/loss will be entered on the PTE’s Oklahoma Capital Gain Deduction form, Form 561-PTE.

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
Lines 1-5: Type of Property Sold
Enter the number in the box which corresponds to the type of property sold:
	
1.	 The sale of stock in a qualified Oklahoma corporation.
	
2.	 The sale of an ownership interest in a qualified Oklahoma company, limited liability company, or partnership.
	
3.	 The sale of qualified real property located within Oklahoma.
	
4.	 The sale of qualified tangible personal property located within Oklahoma.
	
5.	 The sale of qualified 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 partnership or an Oklahoma proprietorship business enterprise.
	 99.	 For lines 2-5, enter a “99” if the net gain/loss is from the sale of more than one type of property.
Line 1: List qualifying Oklahoma capital gains and losses from Federal Form(s) 8949, Part II or from Federal Schedule D, line 8a. Provide a copy of Form(s) 1099-B if the qualifying Oklahoma capital gain or loss is reported on Federal Schedule D, line 8a. In Column A,
line A1 enter the description of the property as shown on Federal Form 8949, Column a or on Form 1099-B. On line A2 enter either the
Oklahoma location/address 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 E using the information from
Federal Form 8949, Columns b through g or on Form 1099-B. In Column B, enter the date the property was acquired. If you entered
“VARIOUS” or “INHERITED” from your federal form, enter the date you actually acquired the property. For Column F combine Columns
D and E. Do not include gains and losses reported on Form 561 lines 2 through 5.
Line 2: 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. Provide Federal Form 6252.
Capital gain from an installment sale is eligible for the Oklahoma capital gain deduction provided the property was held for the appropriate holding period as of the date sold.
Line 3: Enter the qualifying Oklahoma net capital gain, reported on Federal Schedule D, from the Federal Form 4797. Provide a copy of
the Federal Form 4797. If reporting a gain/loss from a Federal Schedule K-1, complete the worksheet on page 2 and provide a copy of
the Federal Schedule K-1.
Line 4: Enter other qualifying Oklahoma capital gains reported on Federal Schedule D, line 11. Provide the applicable Federal form(s).
If not shown on the Federal form, provide a schedule identifying the type and location of the property sold, the date of the sale, and the
date the property was acquired.
Line 5: Enter qualifying Oklahoma net capital gain or loss from partnerships, S corporations, trusts and estates. Complete the worksheet on page 2 and provide a copy of the Federal Schedule K-1.
Line 7: Enter the total qualifying Oklahoma capital loss carryover from the prior year’s return.
Line 9: The Oklahoma capital gain deduction may not exceed the Oklahoma net capital gain included in Federal adjusted gross income. To determine the Oklahoma net capital gain, complete the worksheet on page 2.