I am an Oklahoma Resident. TurboTax is transferring all of my long-term capital gains to Form 561 which is for the sale of stock in an Oklahoma Corp. How do I fix this?

[Sir_Tedward]

Did you get an answer to this?  I'm having the same problem

[CallMe]

I am having exactly the same issue.  One of the experts replied that we need to go back to the interview of our state return and click the box that says, "does not qualify for exemption" -  but I did that and nothing worked.  I am still stuck and awaiting an answer.  I have already paid for the e-filing and cannot file because of this. 

It seems like a bug in the system that is not responding to any attempts to fix it. Like you, none of my capital gains are from Oklahoma corporations - so why did Turbo Tax population Form 561?

[MarilynG1]

@CallMe If your Capital Gains/Losses are not from Oklahoma corporations, they are not excluded on your Oklahoma resident return.

These are carried over from your Federal return and require no adjustment.

Capital Gains/Losses that are excluded from Oklahoma are:

 1) Real or tangible personal property located within Oklahoma must be owned for at least five years prior to the date of sale.
 2) Stock or ownership in an Oklahoma company, or partnership, owned for at least two years prior to the date of sale.
 3) Sale of real property or personal property as part of the sale of assets in an Oklahoma company owned for at least two years prior to the date of sale.

In other words, it is a tax break for long-time Oklahoma investors in Oklahoma.

Click this link for more info on Excluded Capital Gains in Oklahoma.

[CallMe]

Thank you for your reply.  I do understand all of that - and none of my capital gains are from Oklahoma, which begs the question as to why Turbo Tax dumped all of my capital gains into Oklahoma form 561.  This form is specific to Oklahoma based capital gains.  I have manually checked every box that says "this property is not exempt" but Turbo Tax still insists that I enter  the date of acquisition, which was not reported on the 1099 and  I have no way of knowing.  In the review, it still insists that I have errors because I cannot enter the dates of acquisition. Why is this happening?  Why did Turbo Tax use form 561?  How can I delete it when it is not applicable.  I have already paid to have my state return e-filed, so I don't want to just print it out so I can leave out Form 561, and mail it. Please help. 

[WendyN2]

There is one option you can choose that would expedite your ability to e-file, and it is completely acceptable by the IRS. For your transactions that are triggering capital gains, as long as you properly "categorize" them in the system that is truly what the IRS cares most about. So, L/T - make purchase date any date that forces the transaction to be classified under L/T - and same for the S/T items - just enter any date in 2020 prior to the sell date and that will force it to the S/T section.

[CallMe]

Thank you for your prompt reply.  But the issue is not with the federal return but the state return.  I imported all the 1099s and they populated the IRS forms just fine.  The review of the federal return found no errors. But Turbo Tax messed up by transferring all the capital gains in my Oklahoma return to Form 561, which  is only for gains from Oklahoma companies.  NONE of my capital gains are from Oklahoma companies - but Form 561 assumes they all are, and I have had to manually go one-by-one through each stock and click on "this property does not qualify for exemption."  Yet that is not enough.  Turbo Tax keeps going back to Form 561 and requiring that I enter the dates of acquisition. The federal form did not require this, and allowed for me to enter "various" - but the state form doesn't accept this and requires me to enter numerical dates. Form 561 is not relevant at all to my situation - so I don't understand why Turbo Tax populated it with a bunch of irrelevant information  and putting the onus on me to fix it.  Can you help?

[ReneeM7122]

It sounds like the best approach is to delete form 561.  

How do I view and delete forms in TurboTax Online?

• Open or continue your return in TurboTax.
• In the left menu, select Tax Tools and then Tools.
• In the pop-up window Tool Center, choose Delete a form.
• Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

@CallMe

[mi57]

When I delete the form it reappears when I run error check.  How do I keep non Oklahoma information going to form 561?  Very frustrating, I cannot finish return to efile.

[ThomasM125]

All of your investment sales appear on form 561. Then, if you have any sales that are associated with an Oklahoma company, you can designate them as being exempt from taxation in Oklahoma. So, if you have investment sales, you need to include form 561 on your tax return. Income from investment sales is taxable in Oklahoma, unless it is from an Oklahoma company.

[sgw1379]

I have this same issue and I have tried to delete the form 561 and it shows back up.  All of my gains and losses have nothing to do with Oklahoma property.  As directed, I added the dates for various and tried excluding everything and it just ignores my entries and I'm in this endless cycle of trying to fix just to have it kicked back to fix again.   It absolutely will not let me exclude the gains and go forward. 

[ron-tour33]

This doesn't help me. Turbotax is making me choose one of the options for OK capital gains but thats not what it is. Im stuck it says to fix the error and choose some type of property from oklahoma but its not any of those options and i dont know what to do

[JulieS]

If you sold a capital asset and also file an Oklahoma tax return, you will get the screen titled, Oklahoma Capital Asset Location and Type, shown below. 

If it doesn't apply to you, leave the entire screen blank and check the box next to This property does not qualify for the exclusion. 

[Sundarg1]

I'm having the same problem. Good old turbotax. I'm thinking of just printing out the OK tax form from turbotax, and getting the blank forms and filling it in with the capital gains info by hand.

[wt241627]

These suggestions have already been applied above and there is no solution this issue.  even though  the box is checked, its still making you edit the fields.   Which are not applicable.  even when trying to add an arbitrary date, the 1099, the federal says various.  and there is no option for various for OK.