Certain long-term capital gains can be deducted from your Virginia return. To report the long-term capital gain as a subtraction from income:
- Go to the State Section
- Subtractions from Income
- Other Subtractions
- Add Other Subtraction
- Select "Long Term Capital Gain"
What qualifies as long-term capital gain?
The long-term capital gain must:
- Be due to an investment in a 'Qualified Business" as outlined in the Virginia tax code
- Be a technology business that has been approved by the Secretary of Technology or the Secretary of Commerce and Trade
- Be based in Virginia
- Have 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.