CG: Capital Gains Deduction and Instructions 2025 (2025)
Idaho · Idaho Tax Commission · Used for tax years 2025
Idaho Form CG calculates an individual’s capital gains deduction for 2025. It reports qualifying gains and losses from Idaho property, including qualifying gains and losses received through pass-through entities, and determines the deduction to enter on Form 39R or Form 39NR.
Who files this form
Use Form CG to calculate an individual’s Idaho capital gains deduction for 2025. Only gains from qualifying Idaho property are eligible.
Qualifying property includes:
- Real property held for at least 12 months.
- Tangible personal property used in a qualifying revenue-producing enterprise and held for at least 12 months.
- Cattle and horses held for at least 24 months, and other livestock used for breeding held for at least 12 months.
- Timber held for at least 24 months.
- Certain partnership interests, as described in Idaho Code 63-3022H(3)(f).
Individuals may also claim the deduction for qualifying gains passed through from partnerships, S corporations, trusts, or estates. A pass-through entity paying tax for an individual cannot claim the deduction.
What you'll need
Have the information and federal forms that apply to your qualifying sales:
- Property descriptions and Idaho locations, acquisition and sale dates, sales prices, and costs or other bases.
- Federal Schedule D for taxable gain from selling your Idaho home.
- Federal Form 6252 for installment sales. Include this form with Form CG.
- Federal Form 4797 for qualifying business property sales. Include this form with Form CG.
- Form ID K-1 for qualifying pass-through gains or losses, plus the entity’s EIN and the property details requested on line 5.
- Your prior-year return for any qualifying capital loss carryover.
- Federal Form 1040, line 7, for the capital gain amount used on line 10.
Include additional schedules as needed to report all qualifying capital gains and losses.
Common mistakes
- Claiming ineligible gains. Gains from stocks and other intangibles do not qualify. Gains treated as ordinary income also do not qualify, including ordinary gains on federal Form 4797, Part II.
- Counting the same sale twice. Do not include gains or losses on line 1 if you report them on lines 2 through 5.
- Skipping a qualifying loss carryover. If you have a current-year capital gain and a prior-year capital loss carryover, reduce the gain by the qualifying carryover loss. Only losses from qualifying property can reduce your qualifying gain.
- Using an ineligible installment sale. The property must have met the minimum holding period by the sale date. Use only the current year’s taxable portion of the installment payment.
- Claiming a deduction when line 8 is a loss. No deduction is allowed in that case.
- Exceeding the deduction limit. The deduction cannot exceed capital gain net income reported on the federal return.
Questions people ask
How do I calculate the deduction?
Subtract the qualifying capital loss carryover on line 7 from the total on line 6. If the result on line 8 is a gain, multiply it by 60% on line 9. Your deduction is the smaller of line 9 or the federal capital gain net income on line 10.
Where do I enter the deduction on my Idaho return?
Enter the amount from Form CG, line 11, on Form 39R, Part B, line 10, or Form 39NR, Part B, line 6.
Can gain from selling my Idaho home qualify?
Yes, if the sale meets the qualifying-property requirements. Enter the taxable gain from federal Schedule D on line 2. For qualifying gain from a previous installment sale, use line 3 instead.
Can I count a pass-through entity’s holding period?
Yes. A pass-through owner can include the entity’s holding period when determining whether the property meets the holding-period requirement.