Oklahoma Capital Gain Deduction (for corporations filing Form 512)

Capital Gain Deduction (for corporations filing Form 512)
2023 Form 561-C Oklahoma Capital Gain Deduction for Corporations Filing Form 512
State of Oklahoma

FORM

Oklahoma Capital Gain Deduction
for Corporations Filing Form 512
(Qualifying Assets Held for the Applicable 3 or 5 Year Period)

561-C

2
0
2
3

Federal Employer Identification Number

Name as Shown on Return

1.	 List qualifying Oklahoma capital gains and losses, not included on lines 2 through 4 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
F. 	 Gain or (Loss)
	 Basis Minus
Allocated/
	Adjustments
	 Apportioned to
	 to Gain or Loss
Oklahoma

B. 	 Date
	Acquired
	(mm/dd/yy)

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

D.	Proceeds
	 (Sales Price)

E. 	Cost or Other
F. 	 Gain or (Loss)
	 Basis Minus
Allocated/
	Adjustments
	 Apportioned to
	 to Gain or Loss
Oklahoma

B. 	 Date
	Acquired
	(mm/dd/yy)

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

D.	Proceeds
	 (Sales Price)

E. 	Cost or Other
F. 	 Gain or (Loss)
	 Basis Minus
Allocated/
	Adjustments
	 Apportioned to
	 to Gain or Loss
Oklahoma

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

	

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

	

A3. Type of property sold:
(see instructions)

2.	 Qualifying Oklahoma net capital gain from sale of business property reported on
	
Federal Schedule D, line 11. (Provide Federal Form 4797.)
		
Type of property sold (See instructions).............	

......

2

3.	 Qualifying Oklahoma capital gain from installment sales reported on Federal
	
Schedule D, line 12. (Provide Federal Form 6252.)
		
Type of property sold (See instructions).............	

......

3

4.	 Qualifying Oklahoma net capital gain or (loss) from like-kind exchanges reported on
	
Federal Schedule D, line 13. (Provide Federal Form 8824.)
		
Type of property sold (See instructions).............	

......

4

5.	 Add amounts in column F on line 1 and lines 2 through 4............................................................................

5

6.	 Qualifying Oklahoma capital loss carryover reported on Federal Schedule D, line 6
	
(See instructions)..........................................................................................................................................

6

7.	 Qualifying Oklahoma net capital gain. Subtract line 6 from line 5.
	
(If zero or less, enter “0”.)..............................................................................................................................

7

8.	 Net capital gain apportioned and/or allocated to Oklahoma.........................................................................

8

9.	 Oklahoma Capital Gain Deduction. Enter the smaller of lines 7 or 8 here and on Form 512, Part 1,
column B, line 25 or on Part 2, line 6d. (Do not enter less than zero.)..........................................................

9

Provide Federal Form 1120, Schedule D and Form(s) 8949.

2023 Form 561-C - Page 2

Oklahoma Capital Gain Deduction for Corporations Filing Form 512
68 OS Sec. 2358 and Rule 710:50-15-48
General Information
Corporate taxpayers can deduct qualifying gains receiving capital gain treatment that are included in Federal taxable
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 be earned:
	

1.	 By the corporation on 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. 	 On 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 three uninterrupted years prior to the date of
the transaction that gave rise to the capital gain; or

	

3.	 On 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 where such property has been directly or indirectly owned by such entity or owned by the owners of
such entity, and used in or derived from such entity for a period of at least three uninterrupted years prior to the
date of the transaction that gave rise to the capital gain.	

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 (PTE) is eligible for the Oklahoma
capital gain deduction, provided the corporation has been a member of the PTE for an uninterrupted period of the
applicable three or five years and the PTE has held the asset for not less than the applicable three 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 three or five. The PTE must provide supplemental
information to the corporation 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 a corporate taxpayer’s Federal taxable 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 1-4: Type of Property Sold
Enter the number in the box that 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.
	 99.	 For lines 2-4, enter a “99” if the net gain/loss is from the sale of more than one type of property.
Lines 1 - 7 are used to determine the qualifying Oklahoma net capital gain. The qualifying Oklahoma net capital gain is
the long-term gains from qualifying Oklahoma property minus long-term losses from qualifying Oklahoma property which
were allocated or apportioned to Oklahoma. Line 8 is the net capital gain. Net capital gain is the excess of the net longterm capital gain over the net short-term capital loss allocated or apportioned to Oklahoma. The Oklahoma Capital Gain
Deduction cannot exceed this amount.
NOTE: If less than 100% of a capital gain or loss has been apportioned to Oklahoma, include only such portion in Column F.
For example, on Form 512, Part 2, a corporation apportions 43% of the capital gain/loss to Oklahoma (based on the
apportionment formula), it would then include 43% of the gain/loss. However, if 100% of the gain/loss was allocated to
Oklahoma, then include 100% of such gain/loss.

2023 Form 561-C - Page 3

Oklahoma Capital Gain Deduction for Corporations Filing Form 512
68 OS Sec. 2358 and Rule 710:50-15-48
Specific Instructions - continued
Line 1: List qualifying Oklahoma capital gains and losses from the 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
from Form 1099-B. In Column F enter the qualifying Oklahoma capital gain or loss allocated or apportioned to Oklahoma.
Do not include gains and losses reported on Form 561-C lines 2 through 4.
Line 2: Enter the qualifying Oklahoma net capital gain allocated or apportioned to Oklahoma that was reported on Federal
Schedule D, from the Federal Form 4797. Provide a copy of the Federal Form 4797.
Line 3: 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 that
was allocated or apportioned to Oklahoma. 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 4: Enter the qualifying Oklahoma net capital gain or loss allocated or apportioned to Oklahoma that was reported on
Federal Schedule D, line 13. Provide a copy of the Federal Form 8824.
Line 6: Enter the total qualifying Oklahoma capital loss, carried over/back from another year’s return, allocated or
apportioned to Oklahoma that was reported on Federal Schedule D, line 6.
Line 8: The Oklahoma capital gain deduction may not exceed the portion of the net capital gain allocated or apportioned
to Oklahoma. The term “net capital gain” means the excess of the net long-term capital gain for the taxable year over the
net short-term capital loss for such year. If there is a net capital loss, enter “0”.