HOUSE BILL 571

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Miguel P. Garcia

AN ACT

RELATING TO TAXATION; LIMITING THE CAPITAL GAINS DEDUCTION FROM NET INCOME FOR CERTAIN TAXPAYERS; ELIMINATING THE CAPITAL GAINS DEDUCTION CAP.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 7-2-34 NMSA 1978 (being Laws 1999, Chapter 205, Section 1, as amended) is amended to read:

     "7-2-34. DEDUCTION--NET CAPITAL GAIN INCOME.--

          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)] the following percentage of the taxpayer's net capital gain income for the taxable year for which the deduction is being claimed:

                     [(a) for a taxable year beginning in 2003, ten percent;

                     (b) for a taxable year beginning in 2004, twenty percent;

                     (c) for a taxable year beginning in 2005, thirty percent;

                     (d) for a taxable year beginning in 2006, forty percent; and

                     (e) for taxable years beginning on or after January 1, 2007, fifty percent]

                (1) for heads of household, surviving spouses and married individuals filing joint returns:

                     (a) with net income equal to or less than two hundred fifty thousand dollars ($250,000), fifty percent; and

                     (b) with net income over two hundred fifty thousand dollars ($250,000), twenty-five percent; and

                (2) for single individuals and for estates and trusts:

                     (a) with net income equal to or less than two hundred thousand dollars ($200,000), fifty percent; and

                     (b) with net income over two hundred thousand dollars ($200,000), twenty-five percent.

          B. A husband and wife 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."

     SECTION 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2011.

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