Questions & Answers

What capital gains and extraordinary dividends can I deduct?

Nebraska residents can elect to deduct the extraordinary dividends paid on and the gain received from the sale or exchange of capital stock of a "qualified" corporation acquired either because of employment by the corporation or while employed by the qualified corporation.

"Extraordinary dividend" means any dividend greater than 20 percent of the fair market value of the stock on which it is paid as of the date the dividend is declared. Individuals are entitled to one election during their lifetime for the capital stock of one qualified corporation.

Special Capital Gains Election Computation, Form 4797N , must be sent to the Nebraska Department of Revenue to report your election.

When claiming the Extraordinary Dividend Deduction, a copy of federal Schedule B is required.

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