2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 (Page 10 of 18) in pdf

a. Retirement funds. You may subtract payments received

removed from Wisconsin income when Wisconsin

from certain retirement funds that are exempt from Wisconsin

Schedule WD (Form 2) is completed.

taxation to the extent included in federal income. However,

b. Adjustment for ordinary gain or loss for assets reported on

payments received from a tax-sheltered annuity deposit in

federal Form 4797. If you reported sales (or other disposi-

such retirement systems are taxable. (See Wisconsin Form 1

tions) of assets on federal Form 4797 and there was a

instructions for further details.)

difference between the federal basis and the Wisconsin

b. Wisconsin NOL. If you had a Wisconsin net operating loss

basis, follow the three steps below to figure the adjustment.

(NOL) in an earlier year to carry forward to 2006, include

the allowable amount on Schedule A. Enclose a statement

STEP 1: Recompute federal Form 4797, Sales of Business

showing how you figured the amount. Get Publication 120,

Property.

Net Operating Losses for Individuals, Estates, and Trusts,

• For assets the estate or trust sold or otherwise disposed of,

from any Department of Revenue office for more details on

use the Wisconsin basis instead of the federal basis when

computing an NOL and the allowable deduction.

recomputing Form 4797.

c. Relocation assistance. Relocation assistance payments

• For those assets disposed of by a partnership, tax-option (S)

received subject to the provisions set forth in section 32.19,

corporation, or other estate or trust, from which the estate or

Wisconsin Statutes.

trust received a distribution, use the Wisconsin gain or loss

d. Transitional adjustments. See instruction (c) for line 5,

instead of the federal gain or loss when recomputing

Schedule A. Enclose schedule.

Form 4797.

e. Farm loss carryover. See Wisconsin Form 1 instructions

NOTE: The Wisconsin gain or loss can be found on line 10 of

for further details.

Wisconsin Schedule 3K-1 or line 9 of Wisconsin Schedule 5K-1.

f. Nonresident income. Income of nonresidents not subject

Label this recomputed Form 4797 “Wisconsin.” Enclose the

to Wisconsin tax.

“Wisconsin” Form 4797 with Form 2.

g. Certain military pay. Military pay that is included on a W-2

for a member of the Reserves or National Guard who served

STEP 2: If a gain was entered on line 7 or 9 of “Wisconsin”

on active duty may be subtracted if the pay was:

Form 4797, the amounts from the “Wisconsin” Form 4797 must

be used to complete line 11 of Wisconsin Schedule WD

• Received from the federal government,

(Form 2).

• Received after being called into active federal service or

into special state service authorized by the federal

STEP 3: Complete the Adjustment Worksheet below if Part II

Department of Defense, and

was completed on either the federal or “Wisconsin” Form 4797.

• Paid for a period of time during which the member was on

active duty.

Adjustment Worksheet

CAUTION: The subtraction only applies to members of the

Non-

Reserves or National Guard who are called into active federal

Distributable

distributable

service under 10 USC 12302(a) or 10 USC 12304 or into

special state service under 32 USC 502(f). However, it does

a Fill in ordinary gain from

not apply to pay that members of the Reserves and National

line 17 of federal Form 4797

Guard receive for their weekend or two-week annual train-

(if blank, fill in zero (0)) .................

ing. It also does not apply to a person who is serving on

b Fill in ordinary gain from

active duty or full-time duty in the active guard reserve (AGR)

line 17 of “Wisconsin” Form 4797

program.

(if blank, fill in zero (0)) .................

h. Manufacturer’s sales tax credit adjustment If the estate

c If line b is more than line a,

subtract line a from line b. Fill in

or trust had unused manufacturer’s sales tax credit from 1998

the result here and on line 5 of

through 2005 of more than $25,000, see Schedule MS. Fill

Schedule A, page 3, Form 2 .........

in the amount of your manufacturer’s sales tax credit de-

duction from line 20 of Schedule MS.

d If line b is less than line a,

subtract line b from line a. Fill in

the result here and on line 11 of

ADDITIONS TO OR SUBTRACTIONS FROM INCOME

Schedule A, page 3, Form 2 .........

The following items may be either an addition to or a subtraction

e Fill in ordinary loss from line 17

from federal taxable income, depending on your situation. Fill

of federal Form 4797 (if blank,

in any additions on line 5 and any subtractions on line 11,

fill in zero (0)) ................................

Schedule A.

f Fill in ordinary loss from line 17

of “Wisconsin” Form 4797

a. Distributive share of net modifications of a partnership or

(if blank, fill in zero (0)) .................

tax-option (S) corporation if it increases or reduces the

g If line f is more than line e,

income of the partnership or corporation. If the estate or

subtract line e from line f. Fill in

trust is a shareholder of a federal S corporation that elects

the result here and on line 11 of

not to be treated as a Wisconsin tax-option (S) corporation,

Schedule A, page 3, Form 2 .........

all items of S corporation income, loss, or deduction included

on the federal return must be reversed.

h If line f is less than line e,

subtract line f from line e. Fill in

CAUTION: Do not reverse any item of S corporation income

the result here and on line 5 of

or loss reported on federal Schedule D. These items are

Schedule A, page 3, Form 2 .........

2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 Page 10

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