561-NR: 2024 Form 561-NR Oklahoma Capital Gain Deduction for Part Year and Nonresidents Filing Form 511NR (2024)
Oklahoma · Oklahoma Tax Commission · Used for tax years 2024
Form 561-NR calculates the Oklahoma capital gain deduction for part-year residents and nonresidents filing Form 511-NR. It reports qualifying Oklahoma capital gains and losses, applicable capital loss carryovers, and the resulting deduction.
Who files this form
Form 561-NR is for part-year residents and nonresidents filing Oklahoma Form 511-NR who claim a deduction for qualifying Oklahoma capital gains included in federal adjusted gross income.
Qualifying gains must come from one of these sales:
- Real or tangible personal property located in Oklahoma and 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 two uninterrupted years before the sale.
- Real, tangible personal, or intangible personal property located in Oklahoma, sold as part of all or substantially all of an Oklahoma business's assets. The property must have been owned by the business or its owners for at least two uninterrupted years before the sale.
An Oklahoma company or business must have had its primary headquarters in Oklahoma for at least three uninterrupted years before the sale.
What you'll need
Provide federal Form 1040, Schedule D, and Form(s) 8949. Depending on the gains you report, also provide:
- Schedule D, line 8a gains or losses: Form(s) 1099-B.
- Installment sales on line 2: Federal Form 6252.
- Business property sales on line 3: Federal Form 4797. If the gain or loss comes from a federal Schedule K-1, also complete the page 2 worksheet and provide Schedule K-1.
- Other gains on line 4: The applicable federal forms. If those forms do not show the details, provide a schedule identifying the property's type and location, sale date, and acquisition date.
- Pass-through gains or losses on line 5: The page 2 worksheet and federal Schedule K-1.
Complete a separate page 2 worksheet for each property sold. It asks for the entity's name and FEIN, property description and location, acquisition and sale dates, and the date or dates you acquired ownership in the entity.
You will also need property descriptions, Oklahoma addresses or entity federal identification numbers, acquisition and sale dates, proceeds, and cost or other basis information to complete line 1. Use the prior year's return for any qualifying Oklahoma capital loss carryover.
Common mistakes
- Repeating gains or losses: Do not include on line 1 amounts reported on lines 2 through 5.
- Using “VARIOUS” or “INHERITED” as the acquisition date: Enter the date you actually acquired the property, even if your federal form uses one of those labels.
- Including gains or losses covered by a pass-through entity election: If you are a direct or indirect member of an electing pass-through entity, do not enter gains or losses covered by that election on Form 561-NR. They belong on the entity's Form 561-PTE.
- Skipping the bond adjustment: Decrease net capital gain for gains, or increase it for losses, from sales of state and municipal bonds exempt from Oklahoma income tax.
- Entering negative deduction amounts: Enter zero on lines 8 and 9 if the amount is zero or less. On line 10, enter the smaller of lines 8 and 9, but not less than zero.
Questions people ask
Can an installment sale qualify?
Yes. Qualifying installment-sale gains included in the current year's federal adjusted gross income are eligible if the property met the applicable holding period when sold. Use the current year's taxable portion of the installment payment and provide federal Form 6252.
Can gains from a pass-through entity qualify?
Yes, if the property qualifies, you were a member of the entity for the applicable two or five uninterrupted years, and the entity held the asset for the applicable two or five uninterrupted years before the sale. The entity must provide supplemental information identifying the qualifying gains. Gains and losses covered by a pass-through entity election are instead reported on the entity's Form 561-PTE.
Do capital loss carryovers reduce the deduction?
Yes. A capital loss carryover from qualified property reduces current-year gains from eligible property. Report the qualifying carryover on line 7 and subtract it from line 6 to calculate line 8.
How much can I deduct, and where does it go on Form 511-NR?
For each column, line 10 is the smaller of lines 8 and 9, and cannot be less than zero. The federal-column deduction cannot exceed net capital gain included in federal adjusted gross income. The Oklahoma-column deduction cannot exceed net capital gain sourced to Oklahoma. Transfer line 10 to Form 511-NR, Schedule 511-NR-B, line 13, in the matching “Federal Amount” and “Oklahoma Amount” columns.