Income tax; addition required for deemed capital gains on certain assets of a decedent.

HF 1357 requires Minnesota taxpayers to include an additional tax for nontaxed capital gains exceeding $1 million on certain inherited assets in their state income tax returns. It directly affects individuals who inherit assets like real estate, stocks, or businesses (excluding specific agricultural land classified as class 2a homestead) after a person’s death. The bill defines "nontaxed capital gains" as the portion of gains calculated as if the asset was sold at its federal estate value, minus $1 million. Taxpayers must report this addition on their returns, with automatic extensions available for filing. The law takes effect for tax years beginning after December 31, 2025.