Capital gains recognized on the sale or exchange of gold and silver coins issued by the United States government and reported on a federal individual income tax return are eligible for an apportionable nonrefundable credit against Utah tax.
You may also include any gold or silver coin or bullion, other than that issued by the United States, if a court of competent jurisdiction issues a final, unappealable judgment or order determining that Utah may recognize the gold or silver coin or bullion as legal tender in the state, or Congress enacts legislation expressly providing that such coin or bullion is legal tender.
To qualify for the credit, all of the following conditions must be met:
- The capital gain transaction must be for the sale or exchange of gold or silver coin issued by the federal government for another form of legal tender,
- the capital gain transaction must result in a short-term or long-term capital gain (defined in IRC §1222) that is reported on Schedule D of your federal individual or fiduciary return,
- any eligible capital gain must first be offset by any capital loss recognized for the year for federal purposes from the sale of gold and/or silver coin, and
- the transaction must be made during the taxable year.
For more information, see UC Title 59, Chapter 1, Part 15, Specie Legal Tender Act.
|Calculation of Gold and Silver Coin Sale Credit|
|1. Capital gains on all sales and exchanges of gold and silver coins||$|
|2. Capital losses on all sales and exchanges of gold and silver coins||$|
|3. Subtract line 2 from line 1 (if a loss, STOP, there is no credit)||$|
|4. Amount from form 1040, Schedule D, line 16 (if a loss, STOP, there is no credit)||$|
|5. Enter the lesser of line 3 or line 4||$|
|6. Credit percentage – 4.85%||.0485|
|7. Credit – multiply line 5 by line 6||$|
Enter the line 7 credit above on TC-40A, Part 3, using code 26.
Note: You may not carry forward or back any credit that is more than your tax liability.
There is no form for this credit. Keep all related documents with your records.