23VAC10-110-110. Transitional modifications to Virginia taxable income

A. Employee annuity plans. Any amount contributed by an individual to an employee annuity plan prior to January 1, 1972, which at the time of contribution was subject to Virginia income tax, may be subtracted from FAGI in computing Virginia taxable income during the taxable year in which the benefit is received by the individual or his beneficiary. The subtraction shall be equal to the cost basis of the contributions prior to January 1, 1972, and shall be allowed only to the extent that the benefits are included in FAGI in the year of recovery, and to the extent that the benefits have previously been taxed in Virginia. B. Nondepreciable property. If any individual sells or exchanges nondepreciable property in a taxable year beginning on or after January 1, 1972, which was received by such individual prior to January 1, 1972, and the basis of such property is greater for state purposes than for federal purposes, the excess may be subtracted from FAGI to the extent included therein in determining Virginia taxable income. If the state basis is less than the federal basis, no adjustment is required. This situation typically arises in the case of inherited nondepreciable property.