Oklahoma Capital Gain Deduction (for nonresident partner included in Composite Return - Form 514, Part 1)

Capital Gain Deduction (for nonresident partner included in Composite Return - Form 514, Part 1)
2023 Form 561-P  Oklahoma Capital Gain Deduction for the Nonresident Partner Included in the Composite Return (Form 514, Part 1)
Oklahoma Capital Gain Deduction

for the Nonresident Partner Included in the Composite Return
(Form 514, Part 1) (Qualifying Assets Held for the Applicable Holding Period)

FORM

State of Oklahoma

561-P

Federal Employer Identification Number

Partnership Name as Shown on Return

Social Security Number/Federal Employer Identification Number

Name of Nonresident Partner

Enter the Date(s) the Nonresident Partner Acquired Ownership in the Partnership:
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:

	

Partner’s Share
Federal
Oklahoma
Amount
Amount
Adjustments to
F.
	
Gain
or
G.
	Gain or
Gain or Loss
(Loss)
(Loss)

B. 	Date
C. Date Sold
D.	Proceeds E. 	 Cost or
	Acquired
	 or Disposed (Sales Price) Other Basis
minus
	(mm/dd/yy) 	(mm/dd/yy)

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

	

Partner’s Share
Federal
Oklahoma
Amount
Amount
Adjustments to
F.
	
Gain
or
G.
	Gain or
Gain or Loss
(Loss)
(Loss)

B. 	Date
C. Date Sold
D.	Proceeds E. 	 Cost or
	Acquired
	 or Disposed (Sales Price) Other Basis
minus
	(mm/dd/yy) 	(mm/dd/yy)

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

2
0
2
3

	

Partner’s Share
Federal
Oklahoma
Amount
Amount
Adjustments to
F.
	
Gain
or
G.
	Gain or
Gain or Loss
(Loss)
(Loss)

B. 	Date
C. Date Sold
D.	Proceeds E. 	 Cost or
	Acquired
	 or Disposed (Sales Price) Other Basis
minus
	(mm/dd/yy) 	(mm/dd/yy)

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.	 Other qualifying Oklahoma net capital gain or (loss) from like-kind exchanges reported
	 on Federal Schedule D, line 12. (Provide a copy of Federal Form 8824.)
		
Type of property sold (See instructions)............... 	

...... 3

4.	 Qualifying Oklahoma net capital gain or (loss) from partnerships, estates or trusts
	 reported on Federal Schedule D, line 13. (Complete the worksheet on page 2 and
	 provide a copy of the Federal Schedule K-1.)
		
Type of property sold (See instructions)............... 	

...... 4

5. 	Qualifying Oklahoma net capital gain. Add amounts in Columns F and G on line 1 and lines 2
	 through 4. (If zero or less, enter “0”.)................................................................................................. 5
6. 	Net capital gain.
	
(See instructions) (If zero or less, enter “0”.)................................................................................ 6
7. 	Oklahoma Capital Gain Deduction. Enter the smaller of lines 5 or 6.
	
(Do not enter less than zero.)....................................................................................................... 7

Provide Federal Form 1065, Schedule D and Form(s) 8949.

2023 Form 561-P - Page 2

Oklahoma Capital Gain Deduction for the
Nonresident Partner Included in the Composite Return (Form 514, Part 1)
68 OS Sec. 2358 and Rule 710:50-15-48

Worksheet - (Provide with Form 561-P)

Partnership Name as Shown on Return
Name of Nonresident Partner

Federal Employer Identification Number
Social Security Number/Federal Employer Identification Number

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:_______________________________________________

General Information
Taxpayers can deduct qualifying gains receiving capital gain treatment that are included in Federal 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;

	

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 three uninterrupted years (two for individuals) 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 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 (two for individuals) 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.
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 person has been a member of the PTE for an uninterrupted period of the applicable three (two for individuals)
or five years, and the PTE has held the asset for not less than the applicable three (two for individuals) 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 (two for individuals) or five. The PTE must provide supplemental information to the
member 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 that 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 Federal distributable income for the current year that are derived from installment sales are eligible for
exclusion provided the appropriate holding periods are met.

Specific Instructions
NOTE: Complete a separate Form 561-P for each nonresident partner whose income is reported on Form 514-PT.
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.

2023 Form 561-P - Page 3

Oklahoma Capital Gain Deduction for the Nonresident Partner
Included in the Composite Return (Form 514, Part 1)
68 OS Sec. 2358 and Rule 710:50-15-48
Specific Instructions - continued
Lines 1 - 5 are used to determine the qualifying Oklahoma net capital gain of a nonresident partner whose income is reported on Form
514-PT. Based on the type of qualifying asset sold, the nonresident must have been a partner in the partnership for an uninterrupted
period of the applicable three (two for individuals) or five years. On lines 1 - 4, Column F “Federal Amount”, enter the nonresident
partner’s share of the qualifying gain or loss included on the Federal Schedule D.
In Column G “Oklahoma Amount” enter the portion of the gain/loss from the Federal Amount column that was allocated
or apportioned to Oklahoma. Line 5 is the qualifying Oklahoma net capital gain that is such nonresident partner’s share of the longterm gains from qualifying Oklahoma property minus the long-term losses from qualifying Oklahoma property. Line 6 is the nonresident
partner’s share of the net capital gain. Column F “Federal Amount” is the excess of the net long-term capital gain over the net short-term
capital loss of the nonresident partner whose income is reported on Form 514-PT. Column G “Oklahoma Amount” is the net long-term
capital gain over the net short-term capital loss allocated or apportioned to Oklahoma for such nonresident partner. For each column:
the Oklahoma Capital Gain Deduction cannot exceed this amount.
Note for Column G “Oklahoma Amount”: If less than 100% of the capital gain or loss has been apportioned to Oklahoma, include
only such portion in Column G. For example: on Form 514, Part 4, a Partnership apportions 43% of a qualifying capital gain/loss to
Oklahoma (based on the apportionment formula). Include 43% of the gain/loss attributable to the nonresident partner whose income is
reported on Form 514-PT and who has met the holding period. However, if 100% of the gain was allocated to Oklahoma, then include in
the Oklahoma Amount column 100% of the gain entered in the Federal Amount column.
Line 1:
List the nonresident partner’s share of the qualifying Oklahoma capital gains and losses from Federal Form 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 1A 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 the corresponding columns of the Federal Form 8949, Columns b through g or from Form 1099-B. In Column
F enter the nonresident partner’s share of the qualifying Oklahoma capital gain or loss reported on the Federal Form 8949, Column h
or Federal Schedule D, Line 8a, column h. In Column G enter the portion of the qualifying Oklahoma capital gain or loss reported in
Column F that was allocated or apportioned to Oklahoma. Do not include gains and losses reported on Form 561-P lines 2 through 4.
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, in Column
F compute the capital gain deduction using the nonresident partner’s share of the current year’s taxable portion of the installment
payment. In Column G enter the portion of the capital gain from an installment sale of eligible property reported in Column F 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 by the partnership for the appropriate holding period as of the date sold. The
nonresident partner must also have been a partner in the partnership for the appropriate holding period as of the date sold.
Line 3:
In Column F enter the nonresident partner’s share of the qualifying Oklahoma net capital gain or loss reported on Federal Schedule D,
line 12. In Column G enter the portion of the capital gain or loss reported in Column F that was allocated or apportioned to Oklahoma.
Provide a copy of the Federal Form 8824.
Line 4:
In Column F enter the nonresident partner’s share of the qualifying Oklahoma net capital gain or loss reported on Federal Schedule D,
line 13. In Column G enter the portion of the capital gain or loss reported in Column F that was allocated or apportioned to Oklahoma.
Complete the worksheet on page 2 and provide a copy of the Federal Schedule K-1 or other information supplied by the other
partnership, estate or trust.
Line 6:
In Column F the Oklahoma capital gain deduction may not exceed the nonresident partner’s share of the net capital gain included on
Federal Schedule K. In Column G the Oklahoma capital gain deduction may not exceed the nonresident partner’s share of the portion
of the net capital gain apportioned and/or allocated 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. If there is a net capital loss, enter “0”.
Line 7:
In Column F enter the smaller of line 5 or 6 here and use the deduction when computing the nonresident partner’s Oklahoma Additions
and Subtractions on Form 514-PT, Column C. (Nonresident corporate partners do not enter an amount on Form 514-PT, Column C.) In
Column G enter the smaller of line 5 or 6 here and use the deduction when computing the nonresident partner’s Oklahoma Distributive
Income on Form 514-PT, Column F.