2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 (Page 6 of 18) in pdf

passed through by the trust or estate to its beneficiaries is

otherwise disposed of during the income year. Gross farm profits

reported on line 14g of Schedule 2K-1.

include the fair market value, at the time of disposition, of

payments-in-kind received for placing land in federal programs.

Also enter on line 17 Wisconsin tax withheld on salary or wages

If the farmland is rented out, the renter’s gross profits are used

received by the personal representative or petitioner on income

to satisfy this requirement. Gross farm profits do not include

in respect of the decedent. Enclose a copy of the wage statement

the fair market value of crops grown but not sold during the

(Form W-2) from the decedent’s employer with the Form 2 that

year, fuel tax credits or refund, or a previous year’s farmland

is filed with the department.

preservation or farmland tax relief credit.

Line 18. 2006 Wisconsin Estimated Payments and Amount

Fill in the property taxes on the farmland (exclusive of improve-

Applied From 2005 Return Enter the total of (1) any over-

ments) in the space provided on line 20, but do not fill in more

payment of 2005 income tax that the estate or trust was allowed

than $6,521. The credit is based on property taxes levied on

as a credit on its 2006 Wisconsin estimated tax, (2) any

the farmland during the 2006 calendar year. This is your 2006

Wisconsin estimated tax payments made by the estate or trust

property tax bill (payable in 2007). You can use up to $6,521 of

for 2006, and (3) advance payments or any payments filed with

property taxes to compute the credit. This includes property taxes

an extension.

on all land which is in agricultural use, less any state aid or

credit. Do not include property taxes on any improvements (e.g.,

Line 19. Farmland Preservation Credit A credit may be

farm building or a residence), special assessments, special

claimed by certain trusts and estates based on property taxes

charges, or interest.

accrued on Wisconsin farmland which is subject to agricultural

NOTE: The property tax bill may include property taxes on both

use restrictions in the form of a zoning ordinance or a farmland

the farmland and improvements. Use the following formula to

preservation agreement. If claiming farmland preservation credit,

determine the portion of the property taxes attributable only to

enclose a completed Schedule FC with the Form 2. Fill in on

the land.

line 19 of Form 2 the amount from line 18 of Schedule FC.

The farmland preservation credit program provides an income

Assessed value of

2006 property

Portion of

tax credit to Wisconsin residents who own at least 35 acres of

farmland

x taxes levied = property taxes

farmland in Wisconsin. For more information about farmland

Total assessed value

in 2006 before

to be used for

preservation credit, contact our Farmland Preservation Unit in

of land and improvements

lottery and

the credit

Madison at (608) 266-2442 or any Department of Revenue

gaming credit

office. Schedule FC is available at any Department of Revenue

office.

If the farmland is co-owned with someone other than the estate

or trust, you may use only those taxes which reflect the owner-

Line 20. Farmland Tax Relief Credit An estate or trust may

ship percentage of the estate or trust.

qualify for the farmland tax relief credit if it meets the following

If the estate or trust purchased the farmland on which this claim

three conditions:

is based during the taxable year, fill in the property taxes on the

1. At least 35 acres of Wisconsin farmland must have been

farmland less any amount allocated to the seller in the closing

owned during the 2006 taxable year. The personal repre-

agreement. If the amount is not set forth in a closing agree-

sentative of an estate and the trustee of a qualifying trust

ment, fill in the total taxes. Do not fill in more than $6,521.

are considered owners of the farmland held by an estate or

When property is transferred during the claim year by a method

trust and may claim this credit on the fiduciary return.

other than a sale, such as through gift, divorce, death, bankruptcy,

The following do not qualify for the credit:

foreclosure, or repossession, the owner of the property on the

tax levy date is the owner who may claim the credit. The tax

a. The estate of an individual who is a nonresident on the

levy date is the date the property tax roll is delivered to the local

date of death.

treasurer for collection, usually in early December of each year.

b. A trust created by a nonresident.

If the farmland is owned by a tax-option (S) corporation or by a

c. A trust which receives Wisconsin real property from a

partnership, fill in the portion of property taxes on the farmland

nonresident.

that reflects the ownership percentage of the estate or trust.

d. A trust in which a nonresident settler retains a beneficial

You may have to contact the tax-option (S) corporation or the

interest.

partnership to get information on the amount of taxes levied on

2. The 2005 property taxes for the farmland on which the credit

the farmland during 2006.

is based must have been paid.

Fill in the amount of your credit on line 20 of Form 2. The credit

3. The farmland must be in agricultural use. The farm of which

is equal to 23% of the property taxes on the farmland up to a

the farmland is a part must have produced at least $6,000 of

maximum credit of $1,500.

gross farm profits during 2006 or a total of $18,000 in gross

CAUTION: If you are claiming farmland preservation credit on

farm profits for 2004, 2005, and 2006 combined. However,

line 19, the total of your farmland preservation credit and your

if at least 35 acres of your farmland was enrolled in the

farmland tax relief credit cannot exceed 95% of the property

Conservation Reserve Program during all or part of 2006,

taxes on the farm. If your credits exceed this amount, you should

you do not have to meet this gross farm profits requirement.

reduce your farmland tax relief credit accordingly.

Gross farm profits means gross receipts, excluding rent, from

Enclose a copy of your 2006 property tax bill(s) with your

the land’s agricultural use, less the cost or other basis of live-

Wisconsin Form 2.

stock or other items purchased for resale which are sold or

2006 Instructions For The Wisconsin Fiduciary Return Form 2 And Schedules Cc, Wd, And 2k-1 Page 6

Related Articles

Related forms

Related Categories