LRB-4261/1
MES:cjs:ph
2009 - 2010 LEGISLATURE
March 17, 2010 - Introduced by Representatives Davis, Nygren, Brooks,
Gunderson, Kerkman, Knodl, LeMahieu, Lothian, Murtha, Petersen,
Petrowski, Roth, Spanbauer, Suder, Tauchen, Townsend, Vos, Ziegelbauer,
Kaufert
and Strachota, cosponsored by Senators Leibham, Hopper,
Harsdorf, Kedzie, A. Lasee, Lazich
and Olsen. Referred to Committee on
Ways and Means.
AB866,1,4 1An Act to repeal 71.05 (6) (b) 9m.; and to amend 71.05 (6) (b) 9. of the statutes;
2relating to: restoring the treatment of the exclusion of capital gains for
3individuals and certain other persons that existed before the enactment of 2009
4Wisconsin Act 28
.
Analysis by the Legislative Reference Bureau
Under current law, as affected by 2009 Wisconsin Act 28, the biennial budget
bill, there is an income tax exclusion for individuals, fiduciaries, members of limited
liability companies and partnerships, and shareholders of tax-option corporations
for 30 percent of the net long-term capital gains realized from the sale of assets held
more than one year and the sale of all assets acquired from a decedent, and an
exclusion for 60 percent of such gains realized from the sale of farm assets held more
than one year and the sale of all farm assets acquired from a decedent. This
treatment in Act 28 first applies to taxable years beginning on January 1, 2009.
This bill repeals the changes made to the treatment of capital gains by 2009
Wisconsin Act 28
. The bill restores the income tax exclusion for capital gains to 60
percent of the net long-term capital gains realized from the sale of assets held more
than one year and the sale of all assets acquired from a decedent and repeals the
separate 60 percent exclusion for farm assets.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to 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:
AB866, s. 1 1Section 1. 71.05 (6) (b) 9. of the statutes, as affected by 2009 Wisconsin Act 28,
2is amended to read:
AB866,2,113 71.05 (6) (b) 9. On assets held more than one year and on all assets acquired
4from a decedent, 30 60 percent of the capital gain as computed under the internal
5revenue code, not including capital gains for which the federal tax treatment is
6determined under section 406 of P.L. 99-514; not including amounts treated as
7ordinary income for federal income tax purposes because of the recapture of
8depreciation or any other reason; and not including amounts treated as capital gain
9for federal income tax purposes from the sale or exchange of a lottery prize. For
10purposes of this subdivision, the capital gains and capital losses for all assets shall
11be netted before application of the percentage.
AB866, s. 2 12Section 2. 71.05 (6) (b) 9m. of the statutes, as created by 2009 Wisconsin Act
1328
, is repealed.
AB866, s. 3 14Section 3. Initial applicability.
AB866,2,1515 (1) This act first applies to taxable years beginning on January 1, 2010.
AB866,2,1616 (End)
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