2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 (Page 11 of 18) in pdf

• If you have an ordinary gain for both federal and Wisconsin

If any provision of federal law which does not apply for Wisconsin

purposes, fill in lines a and b of the worksheet. Also fill in line

purposes affects your federal taxable income, enclose a

c or line d, whichever applies.

schedule with your Form 2. State the nature of the adjustment

and a complete explanation. Show a negative amount in

• If you have an ordinary loss for both federal and Wisconsin

parentheses. Enter the total amount on line 1 of Schedule B.

purposes, fill in lines e and f of the worksheet. Also fill in line

g or h, whichever applies.

• If you have an ordinary gain for federal purposes and line 17

SCHEDULE C INSTRUCTIONS –

on the “Wisconsin” Form 4797 is blank or a loss, fill in lines a,

ADJUSTMENTS TO CAPITAL GAINS / LOSSES

b, e, and f of the worksheet. Also fill in line d and line g. Add

the amounts on lines d and g and fill in the result on line 11 of

Complete Schedule C to adjust capital gains and losses if capital

Schedule A, page 3, Form 2.

assets sold or otherwise disposed of in 2006 had a different

• If you have an ordinary loss for federal purposes and line 17

basis for Wisconsin than for federal income tax purposes. The

on the “Wisconsin” Form 4797 is blank or a gain, fill in lines a,

most common reason for a difference in basis is the use of the

b, e, and f of the worksheet. Also fill in line c and line h. Add

alternate value for federal estate tax purposes while date of

the amounts on lines c and h and fill in the result on line 5 of

death value is required to be used for Wisconsin inheritance

Schedule A, page 3, Form 2.

tax purposes for deaths prior to January 1, 1992. For deaths

after December 31, 1991, if the alternate value is used for federal

NOTE: Nonresident estates and trusts should enter the ordinary

estate tax purposes, the alternate value would also be used for

gain or loss computed on the “Wisconsin” Form 4797 that is

Wisconsin estate tax purposes.

from Wisconsin sources when completing Step 3.

To figure the adjustment, first determine the holding period for

each capital asset which had a different basis for federal and

SCHEDULE B INSTRUCTIONS

Wisconsin purposes. Property acquired by a decedent’s estate

from the decedent is considered to be held more than one year.

(Do not list assets reported on federal Form 4797, such as

IMPORTANT: The Wisconsin Statutes generally require that

depreciable property used in a trade or business, on Schedule C.

the computation of taxable income on the 2006 Wisconsin

See “Adjustment for ordinary gain or loss for assets reported

fiduciary income tax return is to be based on the Internal

on federal Form 4797,” item b under Additions To or Subtractions

Revenue Code enacted as of December 31, 2004. Federal laws

From Income on page 10 of these instructions.)

enacted after December 31, 2004, do not apply for Wisconsin

income tax purposes.

For capital assets held one year or less, fill in line 1. If the

Wisconsin adjusted basis is more than the federal adjusted

A comprehensive list of the provisions of federal law that may not

basis, fill in a negative number in the difference column

be used for Wisconsin purposes for 2006 can be found in the

(column C). Combine the amounts in column C and fill in the

instructions for Wisconsin Schedule I. The following is a list of

result on line 2 of Schedule C and on line 4 of Wisconsin

the items that may affect the largest number of trusts and estates:

Schedule WD (Form 2). Enter a negative number as a loss.

• Additional first-year bonus depreciation.

For capital assets held more than one year, fill in line 3. If the

• Increase in sec. 179 expensing.

Wisconsin adjusted basis is more than the federal adjusted

• Deduction for health savings accounts and related provisions.

basis, fill in a negative number in the difference column

• Exclusion for 50% of the gain from the sale or exchange of

(column C). Combine the amounts in column C and fill in the

qualified small business stock.

result on line 4 of Schedule C and on line 12 of Wisconsin

Schedule WD (Form 2). Enter a negative number as a loss.

• Treatment of extraterritorial income.

• Thirty percent bonus depreciation.

NOTE: If there is inadequate space on lines 1 and 3 to list

• Treatment of qualified leasehold improvement property.

each capital asset which had a different basis for Wisconsin

than for federal tax purposes, enclose a separate page with

• Installment method for accrual basis taxpayers.

Form 2 giving the required information.

SCHEDULE CC INSTRUCTIONS –

INFORMATION REQUIRED WHEN REQUESTING A CLOSING CERTIFICATE

ESTATES: If an estate is requesting a Closing Certificate for

Court. The Probate Court requires the Department of Revenue

Fiduciaries, complete Part I of Schedule CC and enclose Sched-

to verify that a trust under their jurisdiction has filed all tax returns

ule CC with Form 2. Also see “Requesting a Closing Certificate”

and paid all taxes before releasing the trustee and allowing the

on page 3 for other required enclosures and instructions for

trust to close. The Closing Certificate for Fiduciaries is the

when an estate is not required to file Form 2 and needs a closing

document that is used by the Department of Revenue to inform

certificate.

the court that all tax returns have been filed and all taxes paid.

NOTE: If line 10n of Schedule CC plus any adjusted taxable

The certificate may be issued in the year prior to the final year

gifts is more than $675,000, you are required to file a Wiscon-

of the trust to expedite the closing of the trust. This does not

sin Estate Tax Return (Form W706), even though no federal

relieve the trust of the requirement to file a final return.

Estate Tax Return (Form 706) is required. Contact the Wiscon-

If a trust is requesting a Closing Certificate for Fiduciaries,

sin Department of Revenue for additional information.

complete Part II of Schedule CC and enclose Schedule CC with

TRUSTS: A Closing Certificate for Fiduciaries is issued to a

Form 2. Also see “Requesting a Closing Certificate” on page 3

trust only when the trust is under the supervision of the Probate

for other required enclosures.

2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 Page 11

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