71.05(13)(a)5.
5. “Owner" means successively the owner of changing basis assets or constant basis assets as of the transitional date and any subsequent owner whose basis for such assets is found by reference to the basis therefor of another person.
71.05(13)(a)6.
6. “Transitional date" means the first day of the taxpayer's 1965 taxable year.
71.05(13)(a)7.
7. “Wisconsin adjusted basis" means the adjusted basis of the asset or account which would have been applicable in determining gain on the sale or other disposition thereof on the day preceding the transitional date.
71.05(13)(b)
(b) With respect to a constant basis asset any excess of federal adjusted basis over Wisconsin adjusted basis shall be added to income, and any excess of Wisconsin adjusted basis over federal adjusted basis shall be subtracted from income in the year in which such asset is sold, exchanged, abandoned or otherwise disposed of by the owner in a transaction in which gain or loss is recognized to the owner.
71.05(14)
(14) Transitional adjustment; loss carry-forwards. The amount of any long-term capital loss carry-forward from any taxable year prior to the 1982 taxable year which is not allowed as a deduction under section
1211 (b) of the internal revenue code may be deducted, subject to the annual limitations provided in section
1211 (b) of the internal revenue code. A deduction is authorized under this subsection only when the amount of capital loss or capital loss carry-forward deducted in determining federal adjusted gross income for the taxable year is less than the limitations provided in section
1211 (b) of the internal revenue code. For taxable years 1982 to 1985 for married persons, the annual limitation referred to in this subsection shall be determined under the separate return provisions of section
1211 (b) (2) of the internal revenue code. For taxable year 1986 and thereafter for married persons, the annual limitation shall be determined under section
1211 (b) of the internal revenue code.
71.05(15)
(15) Transition. In regard to property that, under s.
71.02 (2) (d) 12., 1985 stats., is required to be depreciated for taxable year 1986 under the internal revenue code as amended to December 31, 1980, and that was placed in service by the taxpayer during taxable year 1986 and thereafter but before the property is used in the production of income subject to taxation under this chapter, the property's adjusted basis and the depreciation or other deduction schedule are not required to be changed from the amount allowable on the owner's federal income tax returns for any year because the property is used in the production of income subject to taxation under this chapter.
71.05(16)
(16) Depreciation continuation. For taxable years beginning before January 1, 2014, property that, under s.
71.02 (2) (d) 12., 1985 stats., is required to be depreciated for taxable year 1986 under the internal revenue code as amended to December 31, 1980, shall continue to be depreciated under the internal revenue code as amended to December 31, 1980.
71.05(17)
(17) Difference in basis. For taxable years beginning before January 1, 2014, with respect to depreciable property that, under s.
71.02 (2) (d) 12., 1985 stats., is required to be depreciated for taxable year 1986 under the internal revenue code as amended to December 31, 1980, and that was disposed of in taxable year 1986 and thereafter, any difference between the adjusted basis for federal income tax purposes and the adjusted basis under this chapter shall be taken into account in determining net income or loss in the year or years that the gain or loss is reportable under this chapter.
71.05(18)
(18) Carry-over basis precluded. For taxable years beginning before January 1, 2014, with respect to property that, under s.
71.02 (2) (d) 12., 1985 stats., is required to be depreciated for taxable year 1986 under the internal revenue code as amended to December 31, 1980, and that was acquired in a transaction occurring in taxable year 1986 and thereafter in which the adjusted basis of the property in the hands of the transferee is the same as the adjusted basis of the property in the hands of the transferor, the Wisconsin adjusted basis of that property on the date of transfer is the adjusted basis allowable under the depreciation provisions of the internal revenue code as defined for Wisconsin purposes for the property in the hands of the transferor.
71.05(19)
(19) Modification of federal adjusted gross income. Whenever a person other than a corporation acquires, after the transitional date, as defined in
sub. (13) (a) 6., a constant basis asset, the federal basis of which is different from the Wisconsin basis, an appropriate modification of federal adjusted gross income shall be made in the year of sale, exchange, abandonment or other disposition of such asset properly to reflect the income consequences of such difference. Whenever such a person acquires, after said transitional date, a changing basis asset the federal basis of which is different from the Wisconsin basis, appropriate modifications of federal adjusted gross income shall be made each year properly to reflect the income consequences of such difference; in any such case the secretary of revenue or his or her delegate may agree with the taxpayer for an amortization of such difference in basis over a period of 5 years or less.
71.05(20)
(20) Partnership interests. Whenever a person other than a corporation sells, exchanges or otherwise disposes of an ownership interest in a partnership in a transaction in which gain or loss is recognized, an appropriate modification to federal adjusted gross income may be made in the year of disposition to reflect an increase or decrease in the basis of the partnership interest equal to any reductions or additions in such basis occurring in calendar or fiscal years prior to 1975 as a result of losses or gains relating to business or property which had a situs outside of this state under the provisions of s.
71.07, 1985 stats., in effect for years prior to 1975.
71.05(21)
(21) Capital gain and loss treatment for adjustments for difference in Wisconsin and federal basis of capital assets. Notwithstanding the provisions of
subs. (7),
(10) (b) and
(e),
(13),
(19) and
(20), the amount of any adjustment relating to the basis of a capital asset shall be combined with other long-term or short-term capital gains and losses reportable for the taxable year or carry-over year, as appropriate. The provisions of sections
1202,
1211 and
1212 of the internal revenue code, to the extent recognized or allowed by this chapter (including any addition required by s.
71.05 (1) (a) 2., 1983 stats., for the taxable year 1983), apply to the resulting net gain or loss determined. Add or subtract, as appropriate, from federal adjusted gross income of the taxable year or a carry-over year an amount to reflect the income consequences of making the amount of a basis adjustment required under this subsection subject to capital gain and loss treatment.
71.05(22)(a)(a)
Election of deductions; husband and wife deductions. Natural persons who have not elected the federal standard deduction, or tax tables based on adjusted gross income, in filing their federal income tax return, may elect the Wisconsin standard deduction in reporting Wisconsin's taxable income of the same year.
71.05(22)(b)
(b)
Deduction precluded. The standard deduction shall not be allowed in computing the taxable income of:
71.05(22)(b)2.
2. A U.S. citizen entitled to the benefits of section
931 of the internal revenue code for federal income tax purposes, applicable with respect to taxation of individuals on 1973 income, and income of subsequent years.
71.05(22)(b)3.
3. An individual making a return for a period of less than 12 months because of a change in his or her annual accounting period.
71.05(22)(b)4.
4. An estate or trust, common trust fund, partnership or limited liability company.
71.05(22)(c)
(c)
Deduction limits; 1987. For taxable year 1987, the Wisconsin standard deduction is whichever of the following amounts is appropriate. For a single individual who has a Wisconsin adjusted gross income of less than $7,500, the standard deduction is $5,200. For a single individual who has a Wisconsin adjusted gross income of at least $7,500 but not more than $50,830, the standard deduction is the amount obtained by subtracting from $5,200 12 percent of Wisconsin adjusted gross income in excess of $7,500 but not less than $0. For a single individual who has a Wisconsin adjusted gross income of more than $50,830, the standard deduction is $0. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of less than $10,000, the standard deduction is $7,560. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of at least $10,000 but not more than $70,480, the standard deduction is the amount obtained by subtracting from $7,560 12.5 percent of aggregate Wisconsin adjusted gross income in excess of $10,000 but not less than $0. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of more than $70,480, the standard deduction is $0. For a married individual filing separately who has a Wisconsin adjusted gross income of less than $4,750, the standard deduction is $3,590. For a married individual filing separately who has a Wisconsin adjusted gross income of at least $4,750 but not more than $33,470, the standard deduction is the amount obtained by subtracting from $3,590 12.5 percent of Wisconsin adjusted gross income in excess of $4,750 but not less than $0. For a married individual filing separately who has a Wisconsin adjusted gross income of more than $33,470, the standard deduction is $0. The secretary of revenue shall prepare a table under which deductions under this paragraph shall be determined. That table shall be published in the department's instructional booklets.
71.05(22)(d)
(d)
Deduction limits; 1988 to 1993. Except as provided in
par. (f), for taxable years beginning on or after January 1, 1988, but before January 1, 1994, the Wisconsin standard deduction is whichever of the following amounts is appropriate. For a single individual who has a Wisconsin adjusted gross income of less than $7,500, the standard deduction is $5,200. For a single individual who has a Wisconsin adjusted gross income of at least $7,500 but not more than $50,830, the standard deduction is the amount obtained by subtracting from $5,200 12 percent of Wisconsin adjusted gross income in excess of $7,500 but not less than $0. For a single individual who has a Wisconsin adjusted gross income of more than $50,830, the standard deduction is $0. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of less than $10,000, the standard deduction is $8,900. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of at least $10,000 but not more than $55,000, the standard deduction is the amount obtained by subtracting from $8,900 19.778 percent of aggregate Wisconsin adjusted gross income in excess of $10,000 but not less than $0. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of more than $55,000, the standard deduction is $0. For a married individual filing separately who has a Wisconsin adjusted gross income of less than $4,750, the standard deduction is $4,230. For a married individual filing separately who has a Wisconsin adjusted gross income of at least $4,750 but not more than $26,140, the standard deduction is the amount obtained by subtracting from $4,230 19.778 percent of Wisconsin adjusted gross income in excess of $4,750 but not less than $0. For a married individual filing separately who has a Wisconsin adjusted gross income of more than $26,140, the standard deduction is $0. The secretary of revenue shall prepare a table under which deductions under this paragraph shall be determined. That table shall be published in the department's instructional booklets.
71.05(22)(dm)
(dm)
Deduction limits; 1994 to 1999. Except as provided in
par. (f), for taxable years beginning after December 31, 1993, and before January 1, 2000, the Wisconsin standard deduction is whichever of the following amounts is appropriate. For a single individual who has a Wisconsin adjusted gross income of less than $7,500, the standard deduction is $5,200. For a single individual who has a Wisconsin adjusted gross income of at least $7,500, the standard deduction is the amount obtained by subtracting from $5,200 12 percent of Wisconsin adjusted gross income in excess of $7,500 but not less than $0. For a head of household who has a Wisconsin adjusted gross income of less than $7,500, the standard deduction is $7,040. For a head of household who has a Wisconsin adjusted gross income of at least $7,500, the standard deduction is the amount obtained by subtracting from $7,040 22.515 percent of Wisconsin adjusted gross income in excess of $7,500 but not less than $0, until the adjusted gross income amount at which the standard deduction is equal to the standard deduction for a single individual at the same adjusted gross income amount. For a head of household who has a Wisconsin adjusted gross income of more than this amount, the standard deduction shall be calculated as if the head of household were a single individual. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of less than $10,000, the standard deduction is $8,900. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of at least $10,000, the standard deduction is the amount obtained by subtracting from $8,900 19.778 percent of aggregate Wisconsin adjusted gross income in excess of $10,000 but not less than $0. For a married individual filing separately who has a Wisconsin adjusted gross income of less than $4,750, the standard deduction is $4,230. For a married individual filing separately who has a Wisconsin adjusted gross income of at least $4,750, the standard deduction is the amount obtained by subtracting from $4,230 19.778 percent of Wisconsin adjusted gross income in excess of $4,750 but not less than $0. The secretary of revenue shall prepare a table under which deductions under this paragraph shall be determined. That table shall be published in the department's instructional booklets.
71.05(22)(dp)1.1. Except as provided in
par. (f), and subject to
subd. 2., for taxable years beginning after December 31, 1999, the Wisconsin standard deduction is whichever of the following amounts is appropriate. For a single individual who has a Wisconsin adjusted gross income of less than $10,380, the standard deduction is $7,200. For a single individual who has a Wisconsin adjusted gross income of at least $10,380, the standard deduction is the amount obtained by subtracting from $7,200 12 percent of Wisconsin adjusted gross income in excess of $10,380 but not less than $0. For a head of household who has a Wisconsin adjusted gross income of less than $10,380, the standard deduction is $9,300. For a head of household who has a Wisconsin adjusted gross income of at least $10,380, the standard deduction is the amount obtained by subtracting from $9,300 22.515 percent of Wisconsin adjusted gross income in excess of $10,380, but not less than $0, until the adjusted gross income amount at which the standard deduction is equal to the standard deduction for a single individual at the same adjusted gross income amount. For a head of household who has a Wisconsin adjusted gross income of more than this amount, the standard deduction shall be calculated as if the head of household were a single individual. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of less than $14,570, the standard deduction is $12,970. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of at least $14,570, the standard deduction is the amount obtained by subtracting from $12,970 19.778 percent of aggregate Wisconsin adjusted gross income in excess of $14,570 but not less than $0. For a married individual filing separately who has a Wisconsin adjusted gross income of less than $6,920, the standard deduction is $6,160. For a married individual filing separately who has a Wisconsin adjusted gross income of at least $6,920, the standard deduction is the amount obtained by subtracting from $6,160 19.778 percent of Wisconsin adjusted gross income in excess of $6,920 but not less than $0. The secretary of revenue shall prepare a table under which deductions under this subdivision shall be determined. That table shall be published in the department's instructional booklets.
71.05(22)(dp)2.
2. Except as provided in
par. (f), for taxable years beginning after December 31, 2015, the Wisconsin standard deduction is whichever of the following amounts is appropriate. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of less than $21,360, the standard deduction is $19,010. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of at least $21,360, the standard deduction is the amount obtained by subtracting from $19,010 19.778 percent of aggregate Wisconsin adjusted gross income in excess of $21,360 but not less than $0. For a married individual filing separately who has a Wisconsin adjusted gross income of less than $10,140, the standard deduction is $9,030. For a married individual filing separately who has a Wisconsin adjusted gross income of at least $10,140, the standard deduction is the amount obtained by subtracting from $9,030 19.778 percent of Wisconsin adjusted gross income in excess of $10,140 but not less than $0. The secretary of revenue shall prepare a table under which deductions under this subdivision shall be determined. That table shall be published in the department's instructional booklets.
71.05(22)(ds)
(ds)
Standard deduction indexing. For taxable years beginning after December 31, 1998, and before January 1, 2000, the dollar amounts of the standard deduction that is allowable under
par. (dm) and all of the dollar amounts of Wisconsin adjusted gross income under
par. (dm) shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the year before the previous year, as determined by the federal department of labor. Each amount that is revised under this paragraph shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this paragraph and incorporate the changes into the income tax forms and instructions.
71.05(22)(dt)
(dt)
Standard deduction indexing, 2001 and thereafter. For taxable years beginning after December 31, 2000, the dollar amounts of the standard deduction that is allowable under
par. (dp) and all of the dollar amounts of Wisconsin adjusted gross income under
par. (dp) shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1999, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2011, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year, and except that the base year for the adjustments to the dollar amounts of the standard deduction and all of the dollar amounts of Wisconsin adjusted gross income under
par. (dp) 2. shall be 2015. Each amount that is revised under this paragraph shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this paragraph and incorporate the changes into the income tax forms and instructions.
71.05(22)(e)
(e)
Proration for fiscal year filer. For a fiscal year taxpayer, any increase in the standard deduction over the standard deduction permissible in the previous calendar year must be prorated by taking into account the number of days of the taxpayer's fiscal year falling in each calendar year.
71.05(22)(f)1.1. For taxable years beginning before January 1, 1993, in the case of a taxpayer with respect to whom a deduction under
s. 71.07 (8) is allowable to another person, the Wisconsin standard deduction shall not exceed the taxpayer's earned income, as defined in section
911 (d) (2) of the internal revenue code, that is taxable under this chapter if that earned income is more than $550 and shall not be less than $550 if that earned income is $550 or less.
71.05(22)(f)2.
2. For taxable years beginning after December 31, 1992, and before January 1, 1994, in the case of a taxpayer with respect to whom a deduction under
s. 71.07 (8) is allowable to another person, the Wisconsin standard deduction shall not exceed the taxpayer's earned income, as defined in section
911 (d) (2) of the internal revenue code, that is taxable under this chapter if that earned income is more than $600 and shall not be less than $600 if that earned income is $600 or less.
71.05(22)(f)3.
3. For taxable years beginning on or after January 1, 1994, and before January 1, 1998, in the case of a taxpayer with respect to whom a deduction under
s. 71.07 (8) is allowable to another person, the Wisconsin standard deduction shall be $500 adjusted for inflation in the manner prescribed by sections
1 (f) (3) to (6) and
63 (c) (4) of the Internal Revenue Code. The department of revenue shall incorporate the changes in the income tax forms and instructions.
71.05(22)(f)4.a.a. For taxable years beginning after December 31, 1997, in the case of a taxpayer with respect to whom an exemption under
sub. (23) (b) 2. is allowable to another person, the Wisconsin standard deduction shall be the lesser of the amount under
subd. 4. b. or one of the amounts calculated under
subd. 4. c., whichever amount under
subd. 4. c. is greater.
71.05(22)(f)4.b.
b. The standard deduction that may be claimed by an individual under
par. (dm) or
(dp), based on the individual's filing status.
71.05(22)(f)4.c.
c. $500, as adjusted for inflation in the manner prescribed by sections
1 (f) (3) to (6) and
63 (c) (4) of the Internal Revenue Code or the taxpayer's earned income, as defined in section
911 (d) (2) of the Internal Revenue Code, plus $250, as adjusted for inflation in the manner prescribed by sections
1 (f) (3) to (6) and
63 (c) (4) of the Internal Revenue Code.
71.05(22)(f)4.d.
d. The department shall incorporate the changes in this subdivision in the income tax forms and instructions.
71.05(22)(g)
(g)
Nonresidents. With respect to nonresident natural persons deriving income from property located, business transacted or personal or professional services performed in this state, including natural persons changing their domicile into or from this state, the Wisconsin standard deduction and itemized deductions are based on federal adjusted gross income, and as provided in
par. (f) 4., and are limited by such fraction of that amount as Wisconsin adjusted gross income is of federal adjusted gross income. In this paragraph, for married persons filing separately “adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly “adjusted gross income" means the total adjusted gross income of both spouses.
71.05(22)(h)
(h)
Part-year residents. If a person and that person's spouse are not both domiciled in this state during the entire taxable year, the Wisconsin standard deduction or itemized deduction on a joint return is determined by multiplying the Wisconsin standard deduction or itemized deduction, each calculated on the basis of federal adjusted gross income, and as provided in
par. (f) 4., by a fraction the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income. For a married person who is not domiciled in this state for the entire taxable year and who files a separate return, the Wisconsin standard deduction and itemized deduction are determined under
par. (g).
71.05(23)
(23) Personal exemptions. In computing Wisconsin taxable income, an individual taxpayer may subtract the following amounts:
71.05(23)(a)
(a) For taxable years that begin after December 31, 1999, and before January 1, 2001:
71.05(23)(a)1.
1. A personal exemption of $600 if the taxpayer is required to file a return under
s. 71.03 (2) (a) 1. or
2. and $600 for the taxpayer's spouse, except if the spouse is filing separately or as a head of household.
71.05(23)(a)2.
2. An exemption of $600 for each individual for whom the taxpayer is entitled to an exemption for the taxable year under section
151 (c) of the Internal Revenue Code.
71.05(23)(a)3.
3. An additional exemption of $200 if the taxpayer has reached the age of 65 before the close of the taxable year to which his or her tax return relates and $200 for the taxpayer's spouse if he or she has reached the age of 65 before the close of the taxable year to which his or her tax return relates, except if the spouse is filing separately or as a head of household.
71.05(23)(b)
(b) For taxable years that begin after December 31, 2000:
71.05(23)(b)1.
1. A personal exemption of $700 if the taxpayer is required to file a return under
s. 71.03 (2) (a) 1. or
2. and $700 for the taxpayer's spouse, except if the spouse is filing separately or as a head of household.
71.05(23)(b)2.
2. An exemption of $700 for each individual for whom the taxpayer is entitled to an exemption for the taxable year under section
151 (c) of the Internal Revenue Code.
71.05(23)(b)3.
3. An additional exemption of $250 if the taxpayer has reached the age of 65 before the close of the taxable year to which his or her tax return relates and $250 for the taxpayer's spouse if he or she has reached the age of 65 before the close of the taxable year to which his or her tax return relates, except if the spouse is filing separately or as a head of household.
71.05(23)(c)
(c) With respect to persons who change their domicile into or from this state during the taxable year and nonresident persons, personal exemptions under
pars. (a) and
(b) shall be limited to the fraction of the amount so determined that Wisconsin adjusted gross income is of federal adjusted gross income. In this paragraph, for married persons filing separately “adjusted gross income" means the separate adjusted gross income of each spouse and for married persons filing jointly “adjusted gross income" means the total adjusted gross income of both spouses. If a person and that person's spouse are not both domiciled in this state during the entire taxable year, their personal exemptions on a joint return are determined by multiplying the personal exemption that would be available to each of them if they were both domiciled in this state during the entire taxable year by a fraction the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.
71.05(24)
(24) Income tax deferral; long-term capital assets. 71.05(24)(a)1.
1. “Claimant" means an individual; an individual partner or member of a partnership, limited liability company, or limited liability partnership; or an individual shareholder of a tax-option corporation.
71.05(24)(a)3.
3. “Long-term capital gain" means the gain realized from the sale of any capital asset held more than one year that is treated as a long-term gain under the Internal Revenue Code.
71.05(24)(b)
(b) For taxable years beginning after December 31, 2010, and before January 1, 2014, a claimant may subtract from federal adjusted gross income any amount, up to $10,000,000, of a long-term capital gain if the claimant does all of the following:
71.05(24)(b)1.
1. Deposits the gain into a segregated account in a financial institution.
71.05(24)(b)2.
2. Within 180 days after the sale of the asset that generated the gain, invests all of the proceeds in the account described under
subd. 1. in a qualified new business venture.
71.05(24)(b)3.
3. After making the investment as described under
subd. 2., notifies the department, on a form prepared by the department, that the claimant will not declare on the claimant's income tax return the gain described under
subd. 1. because the claimant has reinvested the capital gain as described under
subd. 2. The form shall be sent to the department along with the claimant's income tax return for the year to which the claim relates.
71.05(24)(c)
(c) The basis of the investment described in
par. (b) 2. shall be calculated by subtracting the gain described in
par. (b) 1. from the amount of the investment described in
par. (b) 2.
71.05(24)(d)
(d) If a claimant defers the payment of income taxes on a capital gain under this subsection, the claimant may not use the gain described under
par. (b) 1. to net capital gains and losses, as described under
sub. (10) (c).
71.05(25)
(25) Capital gains exclusion; qualified Wisconsin business. 71.05(25)(a)1.
1. “Claimant" means an individual; an individual partner or member of a partnership, limited liability company, or limited liability partnership; or an individual shareholder of a tax-option corporation.
71.05(25)(a)1s.
1s. “Qualified Wisconsin business" means a business certified by the Wisconsin Economic Development Corporation under s.
238.145, 2011 stats., or registered with the department under
s. 73.03 (69).
71.05(25)(a)2.
2. “Qualifying gain" means a long-term capital gain under the Internal Revenue Code realized from the sale of an investment made after December 31, 2010, and held for at least 5 uninterrupted years in a business that for the year of investment and at least 2 of the 4 subsequent years was a qualified Wisconsin business; except that a qualifying gain may not include any amount for which the claimant claimed a subtraction under
sub. (24) (b) or any gain described under
sub. (26) (b).
71.05(25)(b)
(b) For taxable years beginning after December 31, 2015, for an investment in a qualified Wisconsin business made after December 31, 2010, and held for at least 5 uninterrupted years, a claimant may subtract from federal adjusted gross income the amount of the claimant's qualifying gain in the year to which the claim relates, to the extent that it is not subtracted under
sub. (6) (b) 9. or
9m.
71.05(26)
(26) Income tax deferral; qualified Wisconsin business. 71.05(26)(a)1.
1. “Claimant" means an individual; an individual partner or member of a partnership, limited liability company, or limited liability partnership; or an individual shareholder of a tax-option corporation.
71.05(26)(a)3.
3. “Long-term capital gain" means the gain realized from the sale of any capital asset held more than one year that is treated as a long-term gain under the Internal Revenue Code.
71.05(26)(a)4.
4. “Qualified Wisconsin business" means a business certified by the Wisconsin Economic Development Corporation under s.
238.146, 2011 stats., or registered with the department under
s. 73.03 (69).
71.05(26)(b)
(b) For taxable years beginning after December 31, 2010, and before January 1, 2014, a claimant may subtract from federal adjusted gross income any amount of a long-term capital gain if the claimant does all of the following:
71.05(26)(b)1.
1. Deposits the gain into a segregated account in a financial institution.
71.05(26)(b)2.
2. Within 180 days after the sale of the asset that generated the gain, invests all of the proceeds in the account described under
subd. 1. in a qualified Wisconsin business.
71.05(26)(b)3.
3. After making the investment as described under
subd. 2., notifies the department, on a form prepared by the department, that the claimant will not declare on the claimant's income tax return the gain described under
subd. 1. because the claimant has reinvested the capital gain as described under
subd. 2. The form shall be sent to the department along with the claimant's income tax return for the year to which the claim relates.
71.05(26)(bm)
(bm) For taxable years beginning after December 31, 2013, a claimant may subtract from federal adjusted gross income any amount of a long-term capital gain if the claimant does all of the following:
71.05(26)(bm)1.
1. Within 180 days after the sale of the asset that generated the gain, invests all of the gain in a qualified Wisconsin business.
71.05(26)(bm)2.
2. After making the investment as described under
subd. 1., notifies the department, on a form prepared by the department, that the claimant will not declare the gain on the claimant's income tax return because the claimant has reinvested the capital gain as described under
subd. 1. The form shall be sent to the department along with the claimant's income tax return for the year to which the claim relates.
71.05(26)(c)
(c) The basis of the investment described in
par. (b) 2. shall be calculated by subtracting the gain described in
par. (b) 1. from the amount of the investment described in
par. (b) 2. The basis of the investment described in
par. (bm) 1. shall be calculated by subtracting the gain described in
par. (bm) 1. from the amount of the investment described in
par. (bm) 1.
71.05(26)(d)
(d) If a claimant defers the payment of income taxes on a capital gain under this subsection, the claimant may not use the gain to net capital gains and losses, as described under
sub. (10) (c).
71.05(26)(e)
(e) If a claimant claims the subtraction under this subsection, the claimant may not use the gain described under
par. (b) 1. to claim a subtraction under
sub. (24).
71.05(26)(f)
(f) If a claimant claims a subtraction for a capital gain under
par. (b) or
(bm), the gain may not be used as a qualifying gain under
sub. (25).
71.05 History
History: 1987 a. 312;
1987 a. 411 ss.
42,
43,
45,
47 to
49,
51 to
53;
1989 a. 31,
46;
1991 a. 2,
37,
39,
269;
1993 a. 16,
112,
204,
263,
437;
1995 a. 27,
56,
209,
227,
261,
371,
403,
453;
1997 a. 27,
35,
39,
237;
1999 a. 9,
32,
44,
54,
65,
167;
2001 a. 16,
104,
105,
109;
2003 a. 85,
99,
119,
135,
183,
255,
289,
321,
326;
2005 a. 22,
25,
216,
254,
335,
361,
479,
483;
2007 a. 20,
96,
226;
2009 a. 2,
28,
205,
265,
269,
276,
295,
332,
344;
2011 a. 3,
5,
10,
32,
212,
232,
237;
2011 a. 260 ss.
80,
81;
2013 a. 19,
20,
128,
145;
2013 a. 166 s.
76;
2013 a. 173,
227;
2015 a. 55,
60,
84,
195;
2015 a. 197 s.
51; 2015 a 216, 312.
71.05 Annotation
Shareholder distributions derived from investments in direct obligations of the federal government are exempt under sub. (6) (b) 1. Capital Preservation v. Department of Revenue
145 Wis. 2d 841,
429 N.W.2d 551 (Ct. App. 1988).
71.05 Annotation
The fact that federal employees whose service is interrupted can repurchase prior years of employment for benefit determination purposes does not erase their absence from employment on December 31, 1963 so that they may be considered to have been employed on that date under sub. (1) (a). Hafner v. Department of Revenue,
2000 WI App 216,
239 Wis. 2d 218,
619 N.W.2d 300,
00-0511.
71.05 Annotation
Sub. (6) (a) 1. requires adding to Wisconsin income all types of interest excluded from federal interest. All distributions characterized as interest under federal tax law must be included as interest income. Borge v. Wisconsin Tax Appeals Commission,
2002 WI App 14,
250 Wis. 2d 624,
639 N.W.2d 757,
01-0488.
71.05 Annotation
When an agreement is silent on the allocation of a payment between a covenant not to compete and other claims or compensation, the commission may make a reasonable allocation if it is: 1) based on credible evidence; 2) the parties intended a portion of the payment as compensation for the covenant not to compete; and 3) the payment is economically reasonable. Schwartz v. Department of Revenue,
2002 WI App 255,
258 Wis. 2d 112,
653 N.W.2d 150,
02-0372.
