561-PTE: 2024 Form 561-PTE Oklahoma Capital Gain Deduction for an Electing Pass Through Entity (PTE) Filing Form 587-PTE (2024)
Oklahoma · Oklahoma Tax Commission · Used for tax years 2024
Form 561-PTE calculates the Oklahoma capital gain deduction for an electing pass-through entity filing Form 587-PTE. It reports qualifying Oklahoma capital gains and losses and determines the deduction used to compute each member’s Oklahoma taxable income.
Who files this form
Form 561-PTE is for an electing pass-through entity (PTE) filing Form 587-PTE to claim the Oklahoma capital gain deduction for qualifying gains included in federal income.
Qualifying gains must come from one of these sales:
- 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, LLC, or partnership: Owned for at least three uninterrupted years before the sale.
- Oklahoma property sold as part 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, LLC, or partnership must have had its primary headquarters in Oklahoma for at least three uninterrupted years before the sale.
What you'll need
The form asks you to provide Federal Form 1065 or 1120-S, Schedule D, and Form(s) 8949.
Depending on the gains you report, also provide:
- Form(s) 1099-B: For qualifying gains or losses reported on Schedule D, line 8a.
- Federal Form 6252: For installment-sale gains on line 2.
- Federal Form 8824: For like-kind exchange gains or losses on line 3.
- The page 2 worksheet and Federal Schedule K-1: For gains or losses on line 4. The specific instructions also allow other information supplied by the other partnership, estate, or trust. Complete a separate worksheet for each property sold.
You will need the property description, Oklahoma location or the sold entity’s federal identification number, acquisition and sale dates, proceeds, basis and adjustments, and the gain or loss allocated or apportioned to Oklahoma.
Common mistakes
- Counting the same gain or loss twice: Do not include amounts on line 1 if they are reported on lines 2 through 4.
- Including more than Oklahoma’s share: If less than 100% of a gain or loss is apportioned to Oklahoma, include only the Oklahoma portion in Column F.
- Entering a negative deduction: Enter zero on line 5 if the total is zero or less. Enter zero on line 6 if there is a net capital loss. Line 7 cannot be less than zero.
- Claiming more than the allowed limit: Line 7 must be the smaller of lines 5 and 6. The deduction cannot exceed net capital gain allocated or apportioned to Oklahoma.
- Using the wrong installment-sale amount: Use the current year’s taxable portion allocated or apportioned to Oklahoma. The property must have met the required holding period when it was sold.
Questions people ask
How is the deduction calculated?
Lines 1 through 5 determine qualifying Oklahoma net capital gain by subtracting qualifying long-term losses from qualifying long-term gains allocated or apportioned to Oklahoma. Line 6 is net long-term capital gain minus net short-term capital loss allocated or apportioned to Oklahoma. Line 7 is the smaller of lines 5 and 6, but not less than zero.
Can gains passed through from another PTE qualify?
Yes. The electing PTE must have been a member of the other PTE for the applicable three or five uninterrupted years, and that PTE must have held the asset for at least the applicable period before the sale. The PTE must provide supplemental information identifying the qualifying capital gains passed through to the member.
What property code should I use if an amount includes more than one type of property?
For lines 2 through 4, enter code 99 if the net gain or loss comes from the sale of more than one type of property.
Where does the deduction go on Form 587-PTE?
Use the line 7 deduction when computing each member’s Oklahoma taxable income. Enter each member’s pro-rata share of the deduction in Form 587-PTE, Column C.