R-6180: Net Capital Gains Deductions Worksheet (Revision 2025-01)

Who files this form

Use Form R-6180 to claim Louisiana’s net capital gains deduction, and attach it to Form IT-540 or IT-540B.

The deduction applies to qualifying gains from selling or exchanging an equity interest in, or substantially all the assets of, a nonpublicly traded corporation, partnership, limited liability company, or other business organization commercially domiciled in Louisiana.

To qualify:

• You must have owned the business interest or assets for at least five years immediately before the sale or exchange.
• The business must have been commercially domiciled in Louisiana for at least five years before the sale or exchange.
• The transaction must not transfer ownership of the interest or assets to a related party.

Additional location and prior Louisiana income-tax requirements apply to gains from real property, other immovable assets, and tangible movable assets.

What you'll need

The required supporting documents are:

• A completed Form R-6180.
• A copy of the K-1 from the entity that produced the gain.
• A complete copy of federal Form 1040 for the period when the gain was recognized, including Schedule D and any corresponding schedules.
• Documents establishing when you acquired the business interest or assets. Examples include articles of incorporation or organization, acts of sale or exchange, or donative instruments.

If the capital gain for which you are claiming the deduction is greater than $250,000, also submit:

• Copies of the last two returns on which the business income was reported. For a partnership, the form gives the example of the last two years of Form IT-565, Louisiana Partnership Return of Income.
• Detailed information about the pass-through structure, if the gain came from a pass-through entity.
• If the gain came from an asset sale, a purchase-price allocation between assets as required by IRC 1060, generally reportable on IRS Form 8594, plus a depreciation or fixed asset schedule showing the calculation of gross to net asset values.

You will also need your Social Security number, the business name, its LDR account number and federal employer identification number, and information about its Louisiana activities, asset locations, and where management and day-to-day operational decisions are made.

How to file

1. Complete the identifying information and business questions on Form R-6180.
2. Enter the net capital gains reported on your federal return on Line 1.
3. On Line 2A, enter how many years you owned the business interest or assets before the sale or exchange. The holding period starts on the day you acquired them. If the number is less than five, stop. You cannot claim the deduction.
4. On Line 2B, enter how many years the business was commercially domiciled in Louisiana before the sale or exchange. If the number is less than five, stop. You cannot claim the deduction.
5. Copy Line 2B to Line 3A. On Line 3B, enter the decimal that applies:

• At least 5 but less than 10 years: .50
• At least 10 but less than 15 years: .60
• At least 15 but less than 20 years: .70
• At least 20 but less than 25 years: .80
• At least 25 but less than 30 years: .90
• 30 years or more: 1.00

1. Multiply Line 1 by Line 3B and enter the deduction on Line 4.
2. Enter the deduction on Form IT-540, Schedule E, using code 20E, or on the Form IT-540B Nonresident Part-Year Resident (NPR) worksheet, using code 20E.

Attach Form R-6180 to your Form IT-540 or IT-540B and provide the required supporting documentation. The supplied text does not give a mailing address or e-filing instructions.

Common mistakes

• Continuing when a five-year requirement is not met. The worksheet says to stop if either Line 2A or Line 2B is less than five.
• Leaving out federal schedules. The documentation reminder specifically says to include Schedule D and any corresponding schedules with the complete federal Form 1040.
• Missing extra documentation for larger gains. Additional documents are required when the gain for which the deduction is claimed is greater than $250,000.
• Forgetting the attachment. Form R-6180 must be attached to Form IT-540 or IT-540B.

Questions people ask

Can a sale to a related party qualify?

No. Gains from selling or exchanging an equity interest or substantially all assets do not qualify if the transaction transfers ownership to a related party.

Can gains from real property or other immovable assets qualify?

They may qualify if more than 50 percent of the real property or other immovable assets are located in Louisiana and the related business income was subject to Louisiana income tax before the sale or exchange.

Can gains from tangible movable assets qualify?

They may qualify if, during the three years immediately before the sale or exchange, the assets were located in Louisiana for at least 50 percent of their time in service. The related business income must also have been subject to Louisiana income tax before the sale or exchange. “In service” has the same meaning used for calculating depreciation.

Is the deduction always equal to the full net capital gain?

No. The worksheet multiplies the net capital gains on Line 1 by a decimal based on how long the business was commercially domiciled in Louisiana. The decimal ranges from .50 for at least five but less than ten years to 1.00 for 30 years or more.

Where does the form point for more information?

It refers to Revenue Information Bulletins 10-017 and 16-039 for additional information.

Official sources

• https://dam.ldr.la.gov/taxforms/6180%20(1_25)%20F.pdf