LRB-1544/3
MES:kmg&jlg:km
1997 - 1998 LEGISLATURE
April 24, 1997 - Introduced by Representatives Freese, Gronemus, Hahn,
Wieckert, Sykora, Huebsch, Hasenohrl, Kreibich, Springer, Musser,
Schafer, Dobyns, Gard, M. Lehman, Ainsworth, Powers, Owens, Otte, Hoven,
Zukowski, Ladwig, Skindrud, Duff, Gunderson, Lorge, Grothman, Goetsch,
Olsen, Ward, Harsdorf, Albers, Ott, Johnsrud, Green and Lazich,
cosponsored by Senators Schultz, Rude, Clausing, Panzer and Buettner.
Referred to Joint survey committee on Tax Exemptions.
AB315,1,3
1An Act to create 71.05 (6) (b) 25. of the statutes;
relating to: excluding from
2income taxation certain gains derived from the transfer of business or farming
3assets to family members.
Analysis by the Legislative Reference Bureau
Under current law, there is an income tax exclusion for 60% of the capital gain
from the sale of assets held at least one year and on all assets acquired from a
decedent.
This bill allows an income tax exclusion for 100% of the capital gains, and other
gains that are treated as capital gains, realized from the transfer of business or
farming assets that are held for more than one year to a family member, to the extent
that the capital gains and the other gains on such assets are not excluded from
taxation under current law. The exclusion may be claimed only if the transfer is to
a person such as a parent, grandparent, child, grandchild, great-grandchild, sibling,
aunt, uncle, niece or nephew of the transferor.
This bill will be referred to the joint survey committee on tax exemptions for a
detailed analysis, which will be printed as an appendix to the bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB315, s. 1
1Section
1. 71.05 (6) (b) 25. of the statutes is created to read:
AB315,2,122
71.05
(6) (b) 25. To the extent that the gains are not excluded from taxation
3under subd. 9., on business assets or on assets used in farming, including shares in
4a corporation or trust that meets the standards under s. 182.001 (1), or both, held
5more than one year, that are sold or otherwise disposed of to persons who are related
6to the seller or transferor by blood, marriage or adoption within the 3rd degree of
7kinship as that term is used in s. 852.03 (2), 100% of the capital gains, including gains
8treated as capital gains under section
1231 of the Internal Revenue Code, as
9computed under the Internal Revenue Code, not including amounts treated as
10ordinary income for federal income tax purposes because of the recapture of
11depreciation or any other reason. For purposes of this subdivision, the capital gains
12and capital losses for all assets shall be netted before application of the percentage.
AB315,2,1514
(1)
This act first applies to taxable years beginning on January 1 of the year
15in which this act takes effect.
