561-F: 2025 Form 561-F Oklahoma Capital Gain Deduction for Trusts and Estates Filing Form 513 (2025)
Oklahoma · Oklahoma Tax Commission · Used for tax years 2025
Oklahoma Form 561-F calculates the Oklahoma capital gain deduction for trusts and estates filing Form 513. It reports qualifying Oklahoma capital gains and losses, accounts for qualifying capital loss carryovers, and determines the deduction to enter on Form 513.
Who files this form
Form 561-F is for trusts and estates filing Oklahoma Form 513 that claim the Oklahoma capital gain deduction.
Use capital gains and losses included in Form 513, Column B, that have not been distributed to beneficiaries. Do not include amounts included in the income distribution deduction. Beneficiaries compute their own capital gain deduction on their income tax returns.
Qualifying gains must be included in federal taxable income and come from:
- Oklahoma real or tangible personal property owned for at least five uninterrupted years before the sale.
- Stock or an ownership interest in an Oklahoma company, limited liability company, or partnership owned for at least three uninterrupted years before the sale.
- Oklahoma real, tangible personal, or intangible personal property sold as part of the sale of all or substantially all of an Oklahoma entity’s assets. The property must meet the stated ownership and business-use requirements for at least three uninterrupted years before the sale.
An Oklahoma company, limited liability company, or partnership must have had its primary headquarters in Oklahoma for at least three uninterrupted years before the sale.
What you'll need
Provide Federal Form 1041, Schedule D, and Form(s) 8949 with Form 561-F.
Depending on the gains reported, also provide:
- Line 1: Form(s) 1099-B if the qualifying gain or loss is reported on Federal Schedule D, line 8a.
- Line 2: Federal Form 6252 for installment sales.
- Line 3: The applicable federal forms. If those forms do not show the details, provide a schedule identifying the property type and location, sale date, and acquisition date.
- Line 4: The page 2 worksheet and a copy of Federal Schedule K-1.
- Line 5: Federal Form 4797. If the gain or loss comes from a Federal Schedule K-1, also provide that K-1 and the page 2 worksheet.
Complete a separate worksheet for each piece of property sold. The worksheet asks for the pass-through entity’s name and FEIN, property description and location, acquisition and sale dates, and the dates you acquired ownership in the entity.
For qualifying pass-through gains, the entity must provide supplemental information identifying those gains.
Common mistakes
- Including distributed gains or losses. Exclude any portion included in the income distribution deduction on Form 513.
- Using “VARIOUS” or “INHERITED” as the acquisition date. On line 1, Column B, enter the date you actually acquired the property, even if the federal form uses those labels.
- Counting the same gain twice. Do not include gains or losses on line 1 if they are reported on lines 2 through 5.
- Including gains covered by a pass-through entity election. If you are a direct or indirect member of an electing PTE, do not report gains or losses covered by that election on Form 561-F. They belong on the PTE’s Form 561-PTE.
- Entering negative amounts on lines 8, 9, or 10. Follow the form’s directions to enter zero rather than a negative amount.
- Allocating the deduction to beneficiaries. Do not enter any portion of this deduction in Form 513, Part 2, Beneficiary’s Share of Income and Deductions.
Questions people ask
How much is the deduction, and where do I enter it?
Enter the smaller of Form 561-F lines 8 and 9 on line 10 and on Form 513, Part 1, Column B, line 17. Do not enter less than zero. The deduction cannot exceed the net capital gain included on Form 513, Column B, line 6, excluding amounts included in the income distribution deduction on line 19.
Can an installment sale qualify?
Yes. Use the current year’s taxable portion of the installment payment included in the specified Oklahoma income and not included in the income distribution deduction. The property must have met the applicable holding period when it was sold. Provide Federal Form 6252.
Can gains from a pass-through entity qualify?
Yes, subject to the form’s requirements. For a trust or estate, both the membership period and the entity’s asset-holding period must meet the applicable three- or five-year uninterrupted holding period, depending on the asset. Gains covered by an electing PTE’s election are reported on Form 561-PTE instead.
Does a qualifying capital loss carryover reduce the deduction?
A capital loss carryover from qualified property reduces current-year gains from eligible property. Enter the qualifying carryover on line 7 and subtract it from line 6 to calculate line 8. If the result is zero or less, enter zero.