A. Except as provided in Subsection C of this section, a taxpayer may claim a deduction from net income in an amount equal to the greater of:
(1) the taxpayer's net capital gain income for the taxable year for which the deduction is being claimed, but not to exceed one thousand dollars ($1,000); or
(2) forty percent of the taxpayer's net capital gain income for the taxable year for which the deduction is being claimed.
B. Married individuals who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the deduction provided by this section that would have been allowed on the joint return.
C. A taxpayer may not claim the deduction provided in Subsection A of this section if the taxpayer has claimed the credit provided in Section 7-2D-8.1 NMSA 1978.
D. As used in this section, "net capital gain" means "net capital gain" as defined in Section 1222 (11) of the Internal Revenue Code.
History: Laws 1999, ch. 205, § 1; 2003, ch. 2, § 7; 2019, ch. 270, § 14.
Cross references. — For Section 1222(11) of the Internal Revenue Code, see 26 U.S.C. § 1222.
The 2019 amendment, effective June 14, 2019, reduced the capital gains deduction from fifty percent to forty percent of the taxpayer's net capital gain income for the taxable year for which the deduction is being claimed; in Subsection A, Paragraph A(2), deleted "the following percentage" and added "forty percent", and deleted former Subparagraphs A(2)(a) through A(2)(e); and in Subsection B, deleted "A husband and wife" and added "Married individuals".
Temporary provisions. — Laws 2019, ch. 270, § 54, provided that a taxpayer who paid income tax for taxable year 2019 in installments through withholding or estimated tax payments pursuant to Section 7-2-12.2 NMSA 1978 but underpaid due to the changes made to Section 7-2-34 NMSA 1978 pursuant to this act shall not be subject to penalties and interest provisions of the Tax Administration Act for the underpayment; provided that the underpayment is solely attributable to the changes made to Section 7-2-34 NMSA 1978 pursuant to this act.
Applicability. — Laws 2019, ch. 270, § 59 provided the provisions of Laws 2019, ch. 270, § 14 apply to taxable years beginning on or after January 1, 2019.
The 2003 amendment, effective June 20, 2003, in Subsection A, inserted "the greater of:" and the end, added the Paragraph A(1) designation, added Paragraph A(2); added the Subsection B designation and redesignated the remaining subsections accordingly.
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