45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO TAXATION; AMENDING THE INCOME TAX ACT TO PHASE IN A DEDUCTION FOR ALL NET CAPITAL GAIN INCOME.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 7-2-34 NMSA 1978 (being Laws 1999, Chapter 205, Section 1) is amended to read:

"7-2-34. DEDUCTION--NET CAPITAL GAIN INCOME.--

A. Except as provided in Subsection [B] C of this section, a taxpayer may claim a deduction from net income in an amount equal to the following amounts of the taxpayer's net capital gain income for the taxable year for which the deduction is being claimed [but not to exceed one thousand dollars ($1,000)]:

(1) one-third for taxable years beginning in 2001;

(2) two-thirds for taxable years beginning in 2002; and

(3) all net capital gain income for taxable years beginning on or after January 1, 2003.

B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the deduction provided by this section that would have been allowed on the joint return.

[B.] C. A taxpayer may not claim the deduction provided in Subsection A of this section if the taxpayer has claimed the credit provided in Section 7-2D-8.1 NMSA 1978.

[C.] D. As used in this section, "net capital gain" means "net capital gain" as defined in Section 1222 (11) of the Internal Revenue Code."

Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2001.