How does New Mexico tax capital gains income?

In New Mexico, capital gains income is subject to taxation, and the treatment of such income can differ from that of ordinary income. When a resident of New Mexico realizes a capital gain, it is typically included in their federal adjusted gross income. However, New Mexico has established special provisions regarding the taxation of capital gains, which taxpayers should be aware of. For taxation purposes at the state level, New Mexico provides a partial exemption for long-term capital gains. Specifically, if a taxpayer realizes a gain from the sale of certain assets that they have held for more than one year, they may be eligible to exclude fifty percent of that gain from their taxable income. This exemption aims to encourage investment and stimulate economic growth within the state. It is important to note that there are specific qualifications and limitations related to this exemption. For instance, this benefit applies to gains derived from the sale of stocks, bonds, or other capital assets, but excludes gains from the sale of any property used in a trade or business and certain other categories. Taxpayers must accurately report their capital gains on their state tax return and ensure they comply with all applicable rules. As tax laws may change, individuals should consider reviewing the most recent information available on the official website of New Mexico Taxation and Revenue Department for up-to-date guidance on capital gains taxation and any relevant forms or procedures necessary for reporting such income.