I am an Oklahoma Resident. TurboTax is transferring all of my long-term capital gains to Form 561 which is for the sale of stock in an Oklahoma Corp. How do I fix this?

Forum|Forum|6 years ago
March 3, 2020
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TurboTax Online

Sir_Tedward

Did you get an answer to this? I'm having the same problem

CallMe

I am having exactly the same issue. One of the experts replied that we need to go back to the interview of our state return and click the box that says, "does not qualify for exemption" - but I did that and nothing worked. I am still stuck and awaiting an answer. I have already paid for the e-filing and cannot file because of this.

It seems like a bug in the system that is not responding to any attempts to fix it. Like you, none of my capital gains are from Oklahoma corporations - so why did Turbo Tax population Form 561?

mglauner

@CallMe If your Capital Gains/Losses are not from Oklahoma corporations, they are not excluded on your Oklahoma resident return.

These are carried over from your Federal return and require no adjustment.

Capital Gains/Losses that are excluded from Oklahoma are:

1) Real or tangible personal property located within Oklahoma must be owned for at least five years prior to the date of sale.
2) Stock or ownership in an Oklahoma company, or partnership, owned for at least two years prior to the date of sale.
3) Sale of real property or personal property as part of the sale of assets in an Oklahoma company owned for at least two years prior to the date of sale.

In other words, it is a tax break for long-time Oklahoma investors in Oklahoma.

Click this link for more info on Excluded Capital Gains in Oklahoma.

rdbishop

The instructions for the form state "Enter the qualifying Oklahoma net capital gain, reported on Federal Schedule D, from the Federal Form 4797. Provide a copy of
the Federal Form 4797. If reporting a gain/loss from a Federal Schedule K-1, complete the worksheet on page 2 and provide a copy of
the Federal Schedule K-1."

The fact that TurboTax is requesting me to fill out page 2 of the form clearly indicates to me that this is a bug since this gain was not reported on Federal Schedule K-1. The form only requires page 2 if the gain comes form Federal Schedule K-1.