2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 (Page 14 of 18) in pdf

more than one year or acquired the property from a decedent,

NOTE: If capital gain income is used or set aside for charitable

the gain is reported on line 8 of Schedule WD.

purposes, the amount on line 17 must be adjusted for 60% of

the capital gain income included in the charitable deduction.

• Taxable gain from installment sales which is from Form 4797

and included on line 10 of federal Schedule D is included on

EXAMPLE: An estate is required to set aside 25% of its income

line 11 of Schedule WD. For property not acquired from a

for a charity named in the decedent’s will.

decedent and held one year or less, report the installment

sale gain on line 1 of Schedule WD. The remaining portion

Net capital gain

$10,000

of the amount on line 10 of federal Schedule D should be

reported on line 11 of Schedule WD.

60% of net capital gain

$ 6,000

• If you have a federal gain on an installment sale of property

Less 25% included in charitable deduction

(1,500)

located outside Wisconsin and the sale occurred while you

Adjusted amount to enter on line 17

$ 4,500

were a nonresident of Wisconsin, do not include this install-

ment gain on Schedule WD. For Wisconsin purposes, it is

Wisconsin ordinary income is all taxable income for Wisconsin

assumed that a nonresident person who sells property

(not capital gains or losses) less all Wisconsin deductions.

located outside Wisconsin elects to report the entire gain in

the year of sale, when none of the gain would have been

When computing the Wisconsin capital loss limitation,

taxable by Wisconsin. Subsequently, any portion of such

“Wisconsin ordinary income” means income less deductions.

installment gain which is taxable for federal purposes is not

Do not include capital gains or losses.

taxable for Wisconsin.

Part IV, Computation of Wisconsin Adjustment to

NOTE: Payments from an installment sale made prior to death

Income

that are received after death are “income in respect of a dece-

dent” and the profit is reported in the estate’s income just as it

Complete Part IV to figure the amount you must report as a

was reported prior to death. If the debt is transferred to the

capital gain/loss adjustment on Schedule A, Form 2.

buyer or cancelled, the total unreported gain is taxable to the

estate.

Compare the net gain or loss on Schedule WD (line 18 for a

net gain or line 19 for a net loss) to the amount of capital gain

Gain or loss from partnerships, S corporations, and other

or loss on line 4 of federal Form 1041. On lines 20a and 20e, it

estates or trusts: Fill in on line 3 or 9 the amount of capital

is necessary that gains and losses distributed to beneficiaries

gain or loss from partnerships, tax-option (S) corporations,

be separated from those of the fiduciary. (When completing

estates, and trusts.

Part IV, enter all amounts as positive numbers.)

• If the partnership, S corporation, estate, or trust has informed

• If the net gain or loss on Schedule WD (line 18 for a net gain

you of any adjustment to be made to the capital gain or loss

or line 19 for a net loss) is the same as the amount of capital

for Wisconsin, be sure to use the gain or loss as adjusted.

gain or loss on line 4 of federal Form 1041, do not complete

• If you are a shareholder in a federal S corporation that elects

Part IV. No adjustment to the capital gain or loss is necessary

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

for Wisconsin purposes. Go on to Part V.

do not include on Schedule WD any capital gain or loss

• If the estate or trust has a net gain for both federal and

distributed to you by that federal S corporation. See “Additions

Wisconsin purposes, fill in lines 20a and 20b. Also, fill in either

to or Subtractions from Income” on page 10 of these instruc-

line 20c or line 20d, whichever applies.

tions for additions and subtractions you must make to adjust

for tax-option (S) corporation income.

• If the estate or trust has a net loss for both federal and

Wisconsin purposes, fill in lines 20e and 20f. Also fill in either

Adjustment for differences between Wisconsin and federal

line 20g or line 20h, whichever applies.

basis of assets: Gain or loss from the sale of assets may be

different for Wisconsin and federal purposes because of a dif-

• If the estate or trust has a net gain for federal purposes and

ference in the federal and Wisconsin basis of your property.

a net loss for Wisconsin, fill in your federal gain on line 20a

and your Wisconsin loss on line 20f. Fill in zero (0) on

• If you have a difference between the Wisconsin and federal

lines 20b and 20e. Also complete lines 20d and 20g and fill

basis of property and that property is a capital asset (sale or

in the result on line 9, Schedule A of Form 2.

other disposition is reported on federal Schedule D), fill in

the federal gain or loss in Part I or Part II of Schedule WD,

• If the estate or trust has a net loss for federal purposes and

as appropriate. You must also complete Schedule C on

a net gain for Wisconsin, fill in your federal loss on line 20e

Form 2 to compute the amount to fill in on line 4 or 12 of

and your Wisconsin gain on line 20b. Fill in zero (0) on

Schedule WD.

lines 20a and 20f. Also complete lines 20c and 20h. Add the

amounts on lines 20c and 20h and fill in the result on line 4,

• If you have a difference between the Wisconsin and federal

Schedule A of Form 2.

basis of property and the sale or other disposition of such

property is reported on federal Form 4797, see the instruc-

tion for Form 2 under “Additions to or Subtractions from

Part V, Computation of Capital Loss Carryovers

Income.” If you entered a gain on line 7 or 9 of your “Wiscon-

From 2006 to 2007

sin” Form 4797, you must use the amount from the

“Wisconsin” Form 4797 to complete line 11 of Schedule WD.

If the net loss on line 15, column b is more than the loss on

line 19, complete Part V to compute the amount of your capital

loss carryover. Complete lines 21 through 25 to figure the short-

Part III, Summary of Parts I and II

term capital loss carryover. Complete lines 26 through 30 to

Complete lines 15 through 19 to compute the amount of capital

figure the long-term capital loss carryover.

gain or loss that must be included in Wisconsin taxable income.

On line 15, it is necessary that capital gains and losses distrib-

uted to beneficiaries be separated from those of the fiduciary.

2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 Page 14

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