topic State taxes in State tax filing

State taxes

chap8561 — Sat, 21 Mar 2020 20:32:00 GMT

I filed my Virginia 2020 tax using TurboTax. We filed electronically. On March 16 I received a letter fron the Dept. of Taxation requesting missing information. You showed $ 5637 on Schedule ADJ/CG and cited Code 52. I can't offer a request because I have no Idea what it is. Bill Hughes

Re: State taxes

KarenM90 — Sat, 21 Mar 2020 20:58:15 GMT

That adjustment refers to an adjustment of long term capital gains and will generate in TurboTax when the user responds to a YES for that particular credit when asked if they qualify.

Please see the screenshot below for that particular credit.

Re: State taxes

crippentax — Fri, 09 Feb 2024 20:34:11 GMT

This has happened to me also in the State of Virginia and I am not getting any help from TurboTax.

Re: State taxes

MonikaK1 — Sat, 10 Feb 2024 16:52:16 GMT

If you also received a notice from the State of Virginia asking for additional information regarding Code 52 having been reported on the Sch ADJ for Capital Gains, here is the explanation from the Virginia return instructions:

"Provided the long-term capital gain or investment services partnership income is attributable to an investment in a “qualified business” as defined in Va. Code §58.1-339.4 or any other technology business approved by the Secretary of Technology or the Secretary of Commerce and Trade, it may be allowed as a subtraction.

The business must have its principal facility in Virginia and less than $3 million in annual revenues for the fiscal year preceding the investment.

The investment must be made between the dates of April 1, 2010, and June 30, 2020. Taxpayers claiming the Qualified Equity and Subordinated Debt Credit cannot claim this subtraction relating to investments in the same business. In addition, no investment is “qualified” for this deduction if the business performs research in Virginia on human embryonic stem cells and no subtraction would be allowed to an individual taxpayer who claimed the Venture Capital Investment subtraction for the same investment."

They are asking if the income item you reported meets these criteria needed in order to qualify for a subtraction from income on the Virginia return.

See here for another discussion of this issue.