Montana Department of Revenue
Sale of Business, Farm or Ranch
Example of Concept of Capital Gains Tax Reduction Under
Income Tax Proposal Including Elimination of Federal Deductibility
(18,886)
66,662
85,548
Tax Liability
(1.88%)
6.67%
8.55%
Effective Tax Rate (ETR)
(22%)
Percent Change in ETR
180,000
976,660
796,660
Taxable Income
-
(3,340)
(3,340)
Personal Exemptions (2)
(180,000)
(20,000)
(200,000)
        Total Item. Deductions
-
(20,000)
(20,000)
     Other Deductions
(180,000)
-
(180,000)
     Federal Income Tax
Itemized Deductions
-
1,000,000
1,000,000
MT Adjusted Gross Income
-
1,000,000
1,000,000
Capital Gains Income
Change
in Tax
Proposed Law Tax (6.9%)
Current Law Tax (11%)