2016 Colorado Revised Statutes
Title 39 - Taxation
Specific Taxes
Article 22 - Income Tax
Part 5 - Special Rules
§ 39-22-518. Tax modification for net capital gains

(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" 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.

(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(A) and (B) Repealed.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) 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 sub-subparagraph (B.5) shall be qualifying gains receiving capital treatment for any single income tax year.

(C) to (F) Repealed.

(II) For purposes of this paragraph (b):

(A) "Colorado company, limited liability company, or partnership" means an entity with fifty percent or more of its property and payroll, as determined in accordance with article IV of the multistate tax compact, section 24-60-1301, C.R.S., assigned to locations within Colorado.

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

(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.