§ 77-2715.09 — Capital stock; sale or exchange; extraordinary dividend and capital gains treatment

Nebraska § 77-2715.09

• Jurisdiction: Nebraska
• Ch. 77: Revenue and Taxation

Text

(1) Every resident individual may elect under this section to subtract from federal adjusted gross income, or for trusts qualifying under subdivision (2)(c) of this section from taxable income, the extraordinary dividends paid on and the capital gain from the sale or exchange of capital stock of a corporation acquired by the individual (a) on account of employment by such corporation or (b) while employed by such corporation.
(2)(a) Each individual shall be entitled to one election under subsection (1) of this section during his or her lifetime for the capital stock of one corporation.
(b) The election shall apply to subsequent extraordinary dividends paid and sales and exchanges in any taxable year if the dividend is received on, or the sale or exchange is of, capital stock in the same corporation and such capital stock was acquired as provided in subsection (1) of this section.
(c) After the individual makes an election, such election shall apply to extraordinary dividends paid on, and the sale or exchange of, capital stock of the corporation transferred by inter vivos gift from the individual to his or her spouse or issue or a trust for the benefit of the individual's spouse or issue if such capital stock was acquired as provided in subsection (1) of this section. This subdivision shall apply, in the case of the spouse, only if the spouse was married to such individual on the date of the extraordinary dividend or sale or exchange or the date of death of the individual.
(d) If the individual dies without making an election, the surviving spouse or, if there is no surviving spouse, the oldest surviving issue may make the election for capital stock that would have qualified under subdivision (c) of this subsection.
(3) An election under subsection (1) of this section shall be made by including a written statement with the taxpayer's Nebraska income tax return or an amended return for the taxable year for which the election is made. The written statement shall identify the corporation that issued the stock and the grounds for the election under this section and shall state that the taxpayer elects to have this section apply.

Legislative History

Source: Laws 1987, LB 775, § 12; Laws 1991, LB 773, § 12; Laws 2007, LB343, § 5. Annotations: Taxpayers' election to receive special capital gains/extraordinary dividend treatment available only to someone domiciled in Nebraska militated against a finding that taxpayers possessed intent to abandon their Nebraska domicile. Houghton v. Nebraska Dept. of Rev., 308 Neb. 188, 953 N.W.2d 237 (2021). This section does not contain language discussing underlying sales and transactions or requiring a purpose for taking actions to comply with the section other than qualifying for the special capital gains election. Courts and executive agencies lack the authority to add such language where a statute is clear and not ambiguous. Stewart v. Nebraska Dept. of Rev., 294 Neb. 1010, 885 N.W.2d 723 (2016).