Current through August 31, 2023
Section
63-3022H, Idaho Code
01.
Gain from Forfeited Rights and
Payments. Gain attributable to a cancellation, lapse, expiration, or
other termination of a contract right or obligation does not qualify for the
Idaho capital gains deduction. This includes any gain from the lapse of an
option or from forfeited earnest money, down payment, or similar payments,
related to otherwise qualifying property. (4-6-23)
02.
Timber. As used in Section
63-3022H(3)(e),
Idaho Code, qualified timber grown in Idaho includes: (4-6-23)
a. Standing timber held as investment
property that is a capital asset pursuant to Section
1221, Internal Revenue Code; and
(4-6-23)
b. Cut timber if the
taxpayer elects to treat the cutting of timber as a sale or exchange pursuant
to Section 631(a), Internal
Revenue Code. (4-6-23)
05.
Nonqualifying Property.
Nonqualifying property includes: (4-6-23)
a.
Real or tangible personal property not having an Idaho situs.
(4-6-23)
b. Tangible personal
property not used by a revenue-producing enterprise. (4-6-23)
c. Intangible property. Some examples of
intangible property include, but are not limited to: (4-6-23)
i. Stocks and bonds; (4-6-23)
ii. Interests in a partnership (except for
interests identified in Section
63-3022H(3)(f) ),
Idaho Code, LLC, or S corporation. (4-6-23)
03.
Holding Periods. (4-6-23)
a. In General. To qualify for the capital
gains deduction, property otherwise eligible for the Idaho capital gains
deduction must be held for specific time periods. The holding periods for Idaho
purposes generally follow Sections
1223 and
735, Internal Revenue Code.
(4-6-23)
b. Exception to the
Tacked-On Holding Period. The holding period of property given up in a tax-free
exchange is not tacked on to the holding period of the property received if the
property given up was nonqualifying property based on the requirements of
Section 63-3022H(3),
Idaho Code. (4-6-23)
c. Installment
Sales. The determination of whether the property meets the required holding
period is made using the laws applicable for the year of the sale. If the
required holding period is not met in the year of sale, the gain is not from
qualified property. The classification as nonqualified property will not change
even though the gain may be reported in subsequent years when a reduced holding
period is applicable. (4-6-23)
04.
Holding Periods of S Corporation
and Partnership Property. (4-6-23)
a.
Property Contributed by a Shareholder to an S Corporation or by a Partner to a
Partnership. A shareholder or partner who contributes otherwise qualified
property to an S corporation or partnership may treat the pass-through gain on
the sale of that property as a qualifying Idaho capital gain if the property
has, in total, been held by the shareholder or partner and the S corporation or
partnership for the required holding period. The noncontributing shareholders
or partners may treat the pass-through gain as a qualifying Idaho capital gain
only if the S corporation or partnership held the property for the required
holding period. (4-6-23)
b.
Property Distributed by an S Corporation or Partnership. (4-6-23)
i. Distributions. For purposes of this rule,
the holding period of property received in a distribution from a partnership or
from an S corporation other than in liquidation of stock includes the time the
entity held the property. (4-6-23)
05.
Examples. Available at
Income Tax Rules Examples. (4-6-23)