Source: https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/forms/2025/502cg.pdf#page=2
Pages 2-2, text extracted with pdftotext (poppler), reading order.

MARYLAND
FORM

502CG

CAPITAL GAIN
INCOME
INSTRUCTIONS

GENER AL INSTRUCTIONS
Chapter 604 of the Acts of 2025 imposes a 2% tax on
certain capital gain income.
Complete Form 502CG if you or your spouse were required to
file a 2025 Maryland individual tax return AND:
1. Reported a federal adjusted gross income of more than
$350,000 on Line 1 of Form 502 or Line 17, Column 1, of
Form 505; and
2. Reported net capital gain income on federal Form 1040
Line 7.
If your federal adjusted gross income is $350,000 or less or
you have no net capital gain income included in your Maryland
adjusted gross income, you do not need to complete this form.
Note to members of pass-through entities and
beneficiaries of trusts
A member of a pass-through entity (PTE) with net capital gain
income from the PTE must report their distributive or pro rata
share of the PTE’s net capital gain income on the corresponding Lines 1-7 of this form. A PTE must report members’ capital
gain income on Maryland Form 510/511 K-1, Part H, Lines 1-7.
For additional information, see instructions to Maryland Form
510/511 K-1.
A beneficiary of a trust with net capital gain income from the
trust must report their distributive or pro rata share of the
trust’s net capital gain income on the corresponding Lines 1-7
of this form. A trust must report beneficiaries’ capital gain income on Maryland Form 504 K-1, Box 9, Lines 1-7. For additional
information, see instructions to Maryland Form 504 K-1.
SPECIFIC INSTRUCTIONS
Print or enter all information using blue or black ink
Part 1
Enter your first name, middle initial, last name and Social Security number exactly as entered on your Maryland individual
income tax return. If you are filing a joint Maryland return, also
enter the name and Social Security number of your spouse.
Form 502CG must be attached to the annual return (Form
502 or 505).
Part 2
Line 1: Enter the amount of federal net capital gain income included in your Maryland adjusted gross income. Residents use
Line 1c of Form 502. Nonresidents use Line 7 Column 2 of Form
505.
Line 1a. Total the net capital gain income amounts from all
Maryland Schedules K-1 (510/511) and Maryland Schedules K-1
(504) and enter on Line 1a.
Residents: Total the amounts from Section H, Line 1, Column 1.
Nonresidents: Total the amounts from Section H, Line 1, Column 2.
Attach all Schedules K-1 to your return.
To the extent included in the amount on Line 1, enter the
net capital gain income from all sources attributable to:
Line 2: The sale or exchange of your primary residence on fed-

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2025

eral Form 8949 or 6252. Do not include net capital gain income
attributable to a sale totaling $1,500,000 or more. If a primary
residence is owned by a trust, for the period that a beneficiary
is treated under IRC §§ 671 through 679 as the owner of the
trust or the portion of the trust that includes the residence, the
beneficiary will be treated as owning the residence for purposes
of satisfying the 2-year ownership requirement of IRC § 121,
and the sale or exchange by the trust will be treated as if made
by the beneficiary. Accordingly, if the proceeds from the sale
are distributed to a beneficiary, net capital gain income is reported by the beneficiary on their Maryland income tax return.
If the proceeds from the sale are reinvested in the trust, net
capital gain income on the sale of a primary residence owned by
a trust is reported on Form 504CG.
Line 3: The sale or exchange of assets held in a cash or deferred arrangement plan under Internal Revenue Code (IRC) §
401(k), a tax-sheltered annuity or custodial account under IRC
§ 403(b), a deferred compensation plan under IRC § 457(b), an
individual retirement account or individual retirement annuity
under IRC § 458, a Roth individual retirement account under
IRC § 458A, a defined contribution plan, a defined benefit plan,
or a similar retirement savings plan.
Line 4: The sale or exchange of cattle, horses, or breeding livestock reportable on federal Form 4797. If less than 50% of your
gross income for the taxable year is from farming or ranching,
leave blank.
Line 5: The sale or exchange of land subject to a conservation,
agricultural, or forest preservation easement reportable on
federal Form 8949. Do not include any net capital gain income
already reported on Line 2.
Line 6: The sale or exchange of property used in a trade or
business, the cost of which is deductible under IRC § 179, reportable on federal Form(s) 4797, 8824, or 6252. Do not include
any amounts classified as ordinary gain or the amount of any
recaptured deductions claimable in Parts 2 and 4 of Form 4797.
Line 7: The sale or exchange of affordable housing owned by a
nonprofit organization.
Line 8: Add Lines 2 through 7 and enter the result on Line 8.
Line 9: Subtract Line 8 from Line 1 and enter the result on Line
9 and Line 20a of Form 502 or Line 31a of Form 505. If less than
0 enter 0.

