561-NR: 2025 Form 561-NR Oklahoma Capital Gain Deduction for Part Year and Nonresidents Filing Form 511NR (2025)
Oklahoma · Oklahoma Tax Commission · Used for tax years 2025
Oklahoma Form 561-NR calculates the 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 the Oklahoma capital gain deduction for 2025. Individual taxpayers can deduct qualifying gains included in federal adjusted gross income.
Qualifying gains must come from one of these types of sales:
- Oklahoma real or tangible personal property: The property must have been owned for at least five uninterrupted years before the sale.
- Stock or an ownership interest in an Oklahoma company, limited liability company, or partnership: The stock or interest must have been owned for at least two uninterrupted years before the sale.
- Property sold as part of all or substantially all of an Oklahoma business's assets: The real, tangible personal, or intangible personal property must be located in Oklahoma and must have been owned by the business or its owners for at least two uninterrupted years before the sale.
For these rules, an Oklahoma business is an entity whose primary headquarters has been in Oklahoma for at least three uninterrupted years before the sale.
What you'll need
The form asks you to provide Federal Form 1040, Schedule D, and Form(s) 8949. Depending on the gains you report, also provide:
- Gains reported on Federal Schedule D, line 8a: Copies of Form(s) 1099-B.
- Installment sales on line 2: Federal Form 6252.
- Business property gains on line 3: Federal Form 4797. If reporting a gain or loss from a Federal Schedule K-1, also complete the page 2 worksheet and provide the 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 type, 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 worksheet for each piece of property sold. A pass-through entity must also provide supplemental information identifying qualifying capital gains passed through to you.
Have the property's description, Oklahoma address or the business's federal identification number, acquisition and sale dates, proceeds, and cost or other basis information available. You will also need any qualifying Oklahoma capital loss carryover from the prior year's return.
Common mistakes
- Including gains or losses covered by an electing pass-through entity's election: Do not enter these on Form 561-NR. They belong on the entity's Form 561-PTE.
- 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 those words.
- Entering negative deduction amounts: Enter zero on lines 8 and 9 when the result is zero or less. Do not enter less than zero on line 10.
- Missing the exempt-bond adjustment: Net capital gain must be decreased for capital gains, or increased for capital losses, from sales of state and municipal bonds exempt from Oklahoma income tax.
Questions people ask
Can an installment sale qualify?
Yes. Use the current year's taxable portion of the installment payment. The property must have met the applicable holding period as of the sale date, and you must provide Federal Form 6252.
Can gains passed through from an entity qualify?
Yes, if both you and the entity meet the applicable holding periods. You must have been a member for an uninterrupted two or five years, and the entity must have held the asset for at least the applicable two or five uninterrupted years. The asset type determines the period. Gains or losses covered by an electing entity's election are reported on Form 561-PTE instead.
Does a capital loss carryover affect the deduction?
Yes. A capital loss carryover from qualified property reduces current-year gains from eligible property. Report the qualifying carryover on line 7.
How much is the deduction, and where do I enter it on Form 511-NR?
For each of the Federal Amount and Oklahoma Amount columns, line 10 is the smaller of lines 8 and 9, but not less than zero. Transfer each amount to the corresponding column on Form 511-NR, Schedule 511-NR-B, line 13.