This bill amends RCW 82.87.020 to include specific provisions regarding the taxation of long-term capital gains from the sale or exchange of qualified small business stock under section 1202 of the Internal Revenue Code. The definition of "Adjusted capital gain" is expanded to include long-term capital gains from such sales, which were previously excluded from the calculation of federal net long-term capital gain. The new language specifies that these gains will be added to the adjusted capital gain, thereby allowing taxpayers to account for them when determining their tax obligations.

Additionally, the bill establishes that these provisions will apply to capital gains earned on or after January 1, 2026. This timeline allows for a transition period before the new tax implications take effect, ensuring that individuals and businesses can prepare for the changes in tax law regarding long-term capital gains from qualified small business stock.

Statutes affected:
Original bill: 82.87.020