How is the 44% deduction for net long term capital gains calculated?
A. Individuals are allowed a deduction from South Carolina taxable income equal to 44% of the net capital gain recognized in South Carolina. “Net capital gain” means the excess of the net long term capital gain from the sale or exchange of a capital asset held for more than one year over the net short term capital loss of capital assets held for one year or less. South Carolina Capital Gains holding period is the same as the federal holding period (generally more than one year). To compute the deduction, follow these steps: Step 1: Determine if there is a net gain on all SC assets held more than one year. If there is a net loss on all SC assets held more than one year, stop here – there is no deduction. Step 2: Determine if there is a net gain or a net loss on all SC assets held one year or less. If the computation results in a net gain on SC assets held for one year or less, it is disregarded in the remaining steps for computing the deduction. Step 3: Reduce the net capital gain amoun
