Idaho Capital Gains Deduction

Are you considering selling property in Idaho? If so, you might qualify for a valuable tax deduction! Eligible individuals can deduct up to 60% of the capital gains reported on their federal tax return when filing their Idaho tax return, provided the property meets specific qualifications.

What property Qualifies for Idaho’s Capital Gains Deduction?

1. Real property held for over 12 months: This includes property such as land, permanent structures like buildings, shops, and barns, as well as land improvements like sidewalks, landscaping, and fences.

2. Tangible personal property used in revenue-producing businesses: This includes property, such as furniture and equipment, held for at least 12 months. A revenue-producing enterprise means:

   1. One the is in the businesses of producing, assembling, fabricating, manufacturing, or processing any agricultural, mineral, or manufactured product.

   2. Storing, warehousing, distributing, or selling at wholesale any products of agriculture, mining, or manufacturing .

   3. Feeding livestock at a feedlot.

   4. Operating laboratories or other facilities for scientific, agricultural, or animal husbandry, or industrial research, development, or testing.

3. Livestock: Cattle and horses held for at least 24 months, and other breeding livestock held for at least 12 months, are eligible.

4. Gains on qualified conservation easements: Gains recognized on a conservation easement transferred to a qualified organization are eligible.

5. Grazing Permits and Leases: Gains from the sell of grazing permits and leases issued by the U.S. Forest Service, Bureau of Land Management, or the Idaho Department of Lands are eligible.

6. Partnership Interests Held for Over 12 Months: Gains from sales of partnership interests may qualify if they’re attributable to real property held by the partnership that meets Idaho’s qualifications (per Idaho Code 63-3022H(3)(f)).

   
   

Key Takeaway

If you think your capital gains may qualify for the Idaho capital gains deduction, consulting a tax professional is essential. If qualified this deduction can significantly reduce your Idaho income tax.

For more details regarding Idaho capital gains, refer to Idaho Form CG: Instructions for Capital Gains Deductions.

Disclaimer: This post is for informational purposes only and should not be considered tax, legal, or financial advice. Every individual's financial situation is unique, and tax laws are complex and frequently change. Please consult a qualified tax advisor or attorney for guidance tailored to your specific circumstances.