Idaho allows up to a 60 percent deduction on qualified capital gains.
I have a qualified Idaho capital gain. Both last year and this year, Turbotax gives me a 100 percent deduction of the capital gain when I figure my state taxes. So it deducts the entire capital gain, and of course the tax owing is way too low. Last year, I didn't bother using Turbotax for my state taxes, figuring the mistake would be corrected eventually.
Now the same thing is happening this year. I don't think there's any circumstance where you get to deduct your entire capital gain on an Idaho tax return -- it should be a maximum of 60 percent. Is this an ongoing quirk of Turbotax or am I missing something? I took a screenshot of the Turbotax's rendering of my Idaho taxes. It shows the right figure for my capital gain, but the entire amount is an "Idaho Subtraction."
This is from the Idaho State Tax Commission:
What is the qualified capital gains deduction in Idaho?
The deduction is 60% of the capital gain net income included in federal taxable income from the sale of Idaho property.
I can easily do my own state tax return, but I can't figure out why I keep running into this problem with Turbotax. Any ideas? Has anyone else run into this?
