Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
Regulation 1997-4 - Comprehensive Individual Income Tax Regulations
Rule 26-51-815 - COMPUTING CAPITAL GAINS AND LOSSES
Rule 1.26-51-815(b) - Computation of Tax
Current through Register Vol. 49, No. 9, September, 2024
If a taxpayer has a net capital gain for a given tax year, the tax on such capital gain shall not exceed the sum of:
1. A tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of :
or
PLUS
2. A tax of six percent (6%) on the amount of taxable income in excess of the amount determined under subdivision (1) above.
IRC Section 1222 defines "net capital gain" as the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year.
CAPITAL GAINS
EXAMPLE 1: Mr. Jones, a single taxpayer with no dependents, reported a net taxable income of $40,000.00 after itemized deductions. The income and deductions were comprised of the following:
Mr. Jones' Tax Liability is calculated as follows:
REMINDER: Normal Arkansas Tax rates are graduated from 1% to 6% up to $ 25,000.00 and 7% for income $ 25,000.00 and above. The maximum tax rate for Net Capital Gains cannot exceed 6%.
CAPITAL GAINS
EXAMPLE 2: Same as Example 1 but the wages equal $ 15,000.00 and net taxable income equals $ 25,000.00.
Mr. Jones' Tax Liability is calculated as follows:
CAPITAL GAINS
EXAMPLE 3: Same as Example 1 but wages equal $ 50,000.00 and net taxable income equal $ 60,000.00.
Mr. Jones' Tax Liability is calculated as follows:
