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

Wisconsin Form 4T if the trust reports unrelated business tax-

2. Extensions available under federal law may be used for

able income for federal purposes on federal Form 990-T and

Wisconsin purposes, even if you do not need a federal

the trust has gross income from an unrelated trade or business

extension because you file your federal return by the due

of $1,000 or more. For more information, obtain a copy of

date. To obtain an extension only for Wisconsin, you must:

Wisconsin Form 4T from any Department of Revenue office.

• Estimate your 2006 Wisconsin tax and pay the amount

you will owe by the due date (see item 1) and

FINAL RETURN OF AN ESTATE OR TRUST: A final fiduciary

return reporting all income received from the beginning of the

• Enclose a statement with your Form 2 indicating which

taxable year of closing to the date of closing is required.

federal extension provision you are using or enclose a

copy of a completed federal extension application form.

The net income computed on the final return must be distributed

to the beneficiaries and no income tax is payable by the fiduciary.

No extension is allowed if your estimate of tax is not reasonable.

The beneficiaries of the estate or trust must report income as if

it had been received without the intervention of the fiduciary.

NOTE: Even though you may have an extension of time to file

Enclose a copy of the final account or a letter advising that a

your return, you will owe interest on any tax not paid by the

final account is not required by the probate court with the final

original due date. Returns not filed by the extended due date

fiduciary return.

are subject to additional interest and penalties.

INDIVIDUAL/ESTATE TAX RETURN FOR A DECEDENT: A

Withholding Requirement for Trusts and Estates

personal representative or petitioner must file an individual return

Having Nonresident Beneficiaries

for a decedent to report income from the beginning of the year

to the date of death (Form 1, 1A, 1NPR, or WI-Z). The due date

In general, a trust or estate that has one or more nonresident

of the 2006 individual return is April 16, 2007. The filing require-

beneficiaries is required to withhold income or franchise tax on

ments are as follows:

the income allocable to the nonresident beneficiaries.

a. Single persons.

A nonresident beneficiary includes an individual who is not

(1) Under age 65 – gross income of $9,160 or more.

domiciled in Wisconsin; a partnership, limited liability company,

(2) Age 65 or over – gross income of $9,410 or more.

or corporation whose commercial domicile is outside Wisconsin;

and an estate or trust that is nonresident under sec. 71.14(1) to

b. Married persons filing jointly – joint gross income of $18,000

(3m), Wis. Stats. If the nonresident beneficiary is an individual,

or more.

estate, or trust, the withholding rate is the highest rate for a

single individual (6.75% for 2006). If the nonresident beneficiary

c. Married persons filing separately – gross income of $9,000

is a partnership, limited liability company, or corporation, the

or more.

withholding rate is 7.9%.

d. Head of household.

(1) Under age 65 – gross income of $11,630 or more.

Exceptions: Withholding is not required on behalf of the

following nonresident beneficiaries:

(2) Age 65 or over – gross income of $11,880 or more.

• A beneficiary that is exempt from Wisconsin income or

e. Part-year resident or nonresident – gross income from

franchise taxation. The trust or estate may rely on a written

Wisconsin sources of $2,000 or more.

statement from a beneficiary explaining why the beneficiary

A Form W706, Wisconsin Estate Tax Return, must be filed if

is exempt from Wisconsin tax. The trust or estate must enclose

either a federal estate tax return, Form 706, is filed or the total

a copy of this statement with the Form 2 filed with the

of a decedent’s estate plus adjusted taxable gifts exceeds

department.

$675,000. Form W706 is due nine months after the date of death

• A beneficiary with no Wisconsin income other than his, her,

or when the federal estate tax return is required to be filed, as

or its share of income attributable to Wisconsin, and his, her,

extended, whichever is later.

or its share of that income is less than $1,000.

When to File/Extension of Time to File

The trust or estate uses Form PW-1 to pay the withholding.

Form PW-1 is due with payment by the 15th day of the 4th

A return for a trust is due on or before April 16, 2007. A return

month following the close of the trust’s or estate’s taxable year.

for an estate is due on or before April 16, 2007, for a calendar

It must be filed, and payment must be made, by electronic means

year filer or 3 1/2 months after the close of the taxable year for

unless a waiver applies or electronic filing and payment presents

a fiscal year filer.

an undue hardship. See the Form PW-1 instructions for details

If you cannot file on time, the following options are available for

of the filing procedures.

obtaining an extension:

CAUTION: Nonresidents with a Wisconsin filing requirement

1. If you have an extension for filing your federal return, this

must file the appropriate Wisconsin income or franchise tax

automatically gives you a Wisconsin extension provided you:

return.

• Estimate your 2006 Wisconsin tax and pay the amount

you will owe with your return (line 28 of Form 2) by the

due date using 2006 Wisconsin Form 1-ES, and

• Enclose a copy of your federal extension application with

your Form 2 when filed.

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

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