§ 39-22-518 — Tax modification for net capital gains - definitions - repeal

Colorado § 39-22-518

• Jurisdiction: Colorado
• Title 39: Taxation
• Art.: Income Tax

Text

(1)
For income tax years commencing on or after July 1, 1995, a modification, in the
form of a reduction of income taxable by the state of Colorado, shall be allowed to
any qualified taxpayer for the amount of income attributable to qualifying gains
receiving capital treatment earned by the qualified taxpayer during the taxable
year and included in federal taxable income.

(2) For the purposes of this section:

(a) (I) Qualified taxpayer for income tax years commencing before January
1, 2022, means any taxpayer with no overdue state tax liabilities and not in default
on any contractual obligations owed to the state or to any local government within
Colorado at the time the modification created under this section is claimed. This
subsection (2)(a)(I) is repealed, effective December 31, 2030.

(I.5) Qualified taxpayer means, for income tax years commencing on or
after January 1, 2022, any taxpayer that has no overdue state tax liabilities; that is
not in default on any contractual obligations owed to the state or to any local
government within Colorado at the time the modification created under this section
is claimed; and that is required to file a schedule F, profit or loss from farming, or
successor form, as an attachment to the taxpayer's federal income tax return for
the tax year in which the net capital gains arise.

(II) For the purposes of this paragraph (a), overdue state tax liabilities
includes uncollectible tax liabilities resulting from bankruptcy.

(b) (I) Qualifying gains receiving capital treatment means the amount of net
capital gains, as defined in section 1222 (11) of the internal revenue code, included in
any qualified taxpayer's federal income tax return and:

(A) and (B) Repealed.

(B.5) For income tax years commencing before January 1, 2022, earned by
the qualified taxpayer on either real or tangible personal property located within
Colorado that was acquired on or after May 9, 1994, but before June 4, 2009, or on
tangible personal property only located either within or outside Colorado that was
acquired on or after June 4, 2009, and either of which has been owned by the
qualified taxpayer for a holding period of at least five years prior to the date of the
transaction from which the net capital gains arise if the transaction from which the
net capital gains arise occurred during an income tax year that commenced on or
after January 1, 2010; except that no more than one hundred thousand dollars of net
capital gains described in this subsection (2)(b)(I)(B.5) are qualifying gains receiving
capital treatment for any single income tax year. This subsection (2)(b)(I)(B.5) is
repealed, effective December 31, 2030.

(B.7) For income tax years commencing on or after January 1, 2022, earned
by the qualified taxpayer on qualified real property that was acquired on or after
May 9, 1994, but before June 4, 2009, and has been owned by the qualified taxpayer
for a holding period of at least five years prior to the date of the transaction from
which the net capital gains arise; except that no more than one hundred thousand
dollars of net capital gains described in this subsection (2)(b)(I)(B.7) are qualifying
gains receiving capital treatment for any single income tax year.

(C) to (F) Repealed.

(II) For purposes of this subsection (2)(b):

(A) Repealed.

(B) Holding period means an uninterrupted period of time.

(C) Qualified real property means real property located in Colorado that is
sold by the taxpayer and generates the qualifying gains receiving capital treatment
and that is classified by the county property tax assessor immediately preceding
the sale as agricultural land under section 39-1-102 (1.6)(a). If real property is sold
as a type of investment package, then, in order to be qualified real property, at least
seventy-five percent of the real property sold in the package must be classified by
the county property tax assessor immediately preceding the sale as agricultural
land under section 39-1-102 (1.6)(a).

(3) Any reduction in Colorado taxable income caused by the modification
allowed by this section shall not create any right to a cash refund for the year for
which the modification is claimed, nor shall the reduction create any right to a
financial or other tax benefit which may be carried forward by the qualified
taxpayer.

(4) Any taxpayer claiming a modification pursuant to this section shall
submit with the taxpayer's income tax return in which such modification is claimed
an affidavit, signed under penalty of perjury, stating that the taxpayer meets the
definition of a qualified taxpayer as stated in paragraph (a) of subsection (2) of this
section.

(5) to (8) Repealed.

Legislative History

Source: L. 94: Entire section added, p. 1104, � 1, effective May 9. L. 99: (2)(b)(I) and (2)(b)(II)(B) amended and (5), (6), and (7) added, p. 1284, � 1, effective August 4. L. 2000: (2)(b)(I), (5)(a), (5)(b)(I), (5)(b)(II), (5)(b)(V), (5)(b)(VI), (6), and (7) amended and (5)(c) and (5)(d) added, pp. 1456, 1459, �� 1, 2, effective August 2. L. 2001: (7) amended, p. 1280, � 55, effective June 5; (5)(a), (5)(b)(I), (5)(b)(II), and (5)(b)(VI) amended, p. 394, � 5, effective August 8. L. 2009: (2)(b)(I)(A) and (2)(b)(I)(B) amended, (2)(b)(I)(B.5) and (8) added, and (2)(b)(I)(C), (2)(b)(I)(D), (2)(b)(I)(E), (2)(b)(I)(F), (5), (6), and (7) repealed, (HB 09-1366), ch. 432, pp. 2397, 2398, �� 1, 2, 3, effective June 4. L. 2021: (2)(a)(I), (2)(b)(I)(B.5), and IP(2)(b)(II) amended and (2)(a)(I.5), (2)(b)(I)(B.7), and (2)(b)(II)(C) added, (HB 21-1311), ch. 298, p. 1778, � 8, effective June 23. L. 2023: (2)(b)(II)(A) repealed, (HB 23-1251), ch. 437, p. 2572, � 2, effective August 7.