Article: 50439
Overview
If you have qualifying capital gains or losses, Oklahoma may allow you to deduct certain capital gains on real or tangible personal property located in Oklahoma, if specific ownership and holding requirements are met. To report this on your return, you must complete Form 561 (for full-year residents) or Form 561NR (for part-year/nonresidents).
You can also force this form to print for manual review or record-keeping.
Who Should Use Form 561 or 561NR?
You should complete the Capital Gain Deduction screen if:
- You are reporting capital gains from property (such as real estate, stock, or business interests) located in Oklahoma, and
- You held the property for a minimum of 5 uninterrupted years, and
- The gain qualifies for Oklahoma’s capital gain deduction under the rules outlined in 68 OS Sec. 2358
Note: This includes gains from pass-through entities, Schedule D, or K-1s related to Oklahoma-based assets.
What Types of Capital Gains Qualify?
- Sale of real property located in Oklahoma.
- Sale of tangible personal property used in a business in Oklahoma.
- Sale of Oklahoma-based stock or interest in certain Oklahoma companies or partnerships.
- The sale of ownership interest in an Oklahoma pass-through entity.
The holding period requirement (typically 5 full uninterrupted years) is essential for eligibility.
How to Report
- Navigate to the State Taxes section on the left-hand side of the screen.
- Click the link: “I’d like to see the forms I’ve filled out or search for a form.”
- In the dropdown menu, select Oklahoma.
- Click on the General tab.
- Open screen 561/561NR – Capital Gain Deduction.
- Enter the required information. If you are using this form to force print Form 561, complete enough data to trigger the form. Note: Green-highlighted fields are override entries, meaning they will overwrite values pulled from federal forms or linked schedules. Only use these when necessary.
- Click ‘Save‘ once complete.
Additional Resources
For further guidance, see: