S.F. 2133 Section 1. Section 422.7, subsection 21, Code Supplement 1 2011, is amended by striking the subsection and inserting in 2 lieu thereof the following: 3 21. a. Subtract, to the extent not otherwise excluded, 4 qualifying gains receiving capital treatment. For purposes of 5 this subsection, “qualifying gains receiving capital treatment” 6 means the amount of net capital gains, as defined in section 7 1222(11) of the Internal Revenue Code, included in the 8 taxpayer’s federal adjusted gross income. 9 b. To the extent otherwise allowed, the deduction provided 10 in this subsection is not allowed for purposes of computation 11 of a net operating loss in section 422.9, subsection 3, and in 12 computing the income for the taxable year or years for which a 13 net operating loss is deducted. 14 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 15 retroactively to January 1, 2012, for tax years beginning on 16 or after that date. 17 EXPLANATION 18 This bill excludes qualifying gains receiving capital 19 treatment from the individual state income tax. “Qualifying 20 gains receiving capital treatment” is defined as the amount 21 of net capital gains, as defined in section 1222(11) of the 22 Internal Revenue Code, included in the taxpayer’s federal 23 adjusted gross income. 24 Net capital gains is defined in the Internal Revenue Code as 25 the excess of a taxpayer’s gains from the sales of long-term 26 capital assets over the losses from such sales, minus the 27 excess of losses from the sales of short-term capital assets 28 over the gains from such sales. 29 The exclusion does not apply for purposes of computing a 30 taxpayer’s net operating loss or for purposes of computing 31 income for the taxable year in which a net operating loss is 32 deducted. 33 The bill applies retroactively to January 1, 2012, for tax 34 years beginning on or after that date. 35 -1- LSB 5842XS (2) 84 mm/sc 1/ 1