Instructions For Completing Wisconsin Schedule I

Instructions for Completing Wisconsin Schedule I – 2005

INTRODUCTION – Generally, the Wisconsin Statutes require that the

federal purposes due to Schedule I adjustments made in the current year

computation of taxable income on the 2005 Wisconsin income tax return is

or a prior year. This would occur, for example, when different rates of

to be based on the Internal Revenue Code enacted as of December 31, 2004.

depreciation or amortization were allowable for Wisconsin and federal

Changes made to the Internal Revenue Code enacted after December 31,

purposes in 1975 or thereafter.

2004, do not apply for Wisconsin income tax purposes.

To properly report such gain or loss on your Wisconsin return, you must

first remove all gain or loss included in your federal adjusted gross

Wisconsin law also provides that certain provisions of federal law do not

income. This is done by filling in line 2a or 2b and/or line 3a or 3b. Then

apply for Wisconsin purposes (even though the provisions were enacted into

fill in the revised gain or loss on line 2c and/or line 3c. Attach a revised

federal law prior to December 31, 2004). Some of those provisions are:

federal Schedule D, Form 4684, or Form 4797 marked “Revised for

• Exclusion for small business stock

Wisconsin purposes” to Form 1 or Form 1NPR.

• Treatment of extraterritorial income

Do not complete lines 2 and 3 if you did not make Schedule I adjustments

• Expensing of environmental remediation costs

in the current year or a prior year for the property you sold or otherwise

• Deduction for tuition and fees

disposed of during 2005.

• Bonus depreciation

• Treatment of qualified leasehold improvement property

5. Complete line 5 to make all other adjustments needed to convert 2005

federal adjusted gross income to the amount allowable for Wisconsin.

• Installment method for accrual basis taxpayers

See the listing under Section A of ITEMS REQUIRING ADJUSTMENT.

As a result, certain income and deduction items may be different for

When an adjustment is made on line 2, 3, or 5, this may affect other

Wisconsin and federal purposes. Any difference must be adjusted on this

amounts which must then also be adjusted. For example, the amount of

schedule. A description of items requiring adjustment can be found under

social security includable in federal adjusted gross income may be

ITEMS REQUIRING ADJUSTMENT.

affected when an adjustment is made to an income item. The adjustment

to social security includable in federal adjusted gross income should be

WHO MUST FILE – If the computation of your federal adjusted gross

reported on line 5.

income or itemized deductions reflects any of the differences in Wisconsin

and federal law for 2005, you must complete this schedule and attach it to

When completing line 5, if you are adjusting an expense item (for

your Wisconsin income tax return, Form 1 or Form 1NPR.

example, depreciation or amounts claimed as Adjustments to Income on

lines 23 through 35 of federal Form 1040), fill in the amounts in Col. I

To the extent Schedule I adjustments in a prior year affect income or expense

and Col. II as negative numbers. Put parentheses around the amounts to

items in 2005 (for example, the special 30% depreciation allowance was not

show negative numbers.

allowed to be claimed on property placed in service after September 10,

2001), you must also make adjustments on Schedule I for 2005.

If you are adjusting an income item, fill in the amounts in Col. I and

Col. II as positive numbers.

It also may be necessary to prepare a 2005 Schedule I to adjust the amount

Complete Col. III as follows:

of gain or loss reportable from sales of certain assets during 2005. See the

instructions for lines 2 and 3 under SPECIFIC INSTRUCTIONS.

• If the amounts in Col. I and Col. II are positive numbers (or one number

is a positive number and the other number is zero) and the amount in

PARTNERS, BENEFICIARIES OF ESTATES AND TRUSTS, AND

Col. II is larger than the amount in Col. I, subtract Col. I from Col. II.

SHAREHOLDERS OF TAX-OPTION (S) CORPORATIONS – The

Fill in the difference in Col. III.

income and deduction items computed on the Wisconsin returns of partner-

ships, estates and trusts, and tax-option (S) corporations may also be affected

• If the amounts in Col. I and Col. II are positive numbers (or one number

by the differences between Wisconsin and federal law for 2005. As a result,

is a positive number and the other number is zero) and the amount in

the distributive shares of these items which are reportable on the individual

Col. I is larger than the amount in Col. II, subtract Col. II from Col. I.

Wisconsin income tax returns of the respective partners, beneficiaries, and

Fill in the difference as a negative number in Col. III.

shareholders may differ for Wisconsin and federal income tax purposes. Such

partners, beneficiaries, and shareholders should receive notification from the

• If the amounts in Col. I and Col. II are negative numbers (or one

partnership, estate or trust, or tax-option (S) corporation of the amounts

number is a negative number and the other number is zero) and the

reportable for Wisconsin purposes. By comparing the amounts reportable for

amount in Col. II is larger than the amount in Col. I, subtract Col. I

Wisconsin and federal purposes, the partner, beneficiary, or shareholder

from Col. II. Fill in the difference as a negative number in Col. III.

should determine the items which differ and make the appropriate

Treat both amounts as if they were positive numbers when figuring

adjustments.

which amount is larger and when subtracting the amounts in Col. I and

Col. II.

• If the amounts in Col. I and Col. II are negative numbers (or one

SPECIFIC INSTRUCTIONS

number is a negative number and the other number is zero) and the

amount in Col. I is larger than the amount in Col. II, subtract Col. II

(Numbered to correspond with the line numbers on Schedule I)

from Col. I. Fill in the difference as a positive number in Col. III. Treat

both amounts as if they were positive numbers when figuring which

INSTRUCTIONS FOR PART I

amount is larger and when subtracting the amounts in Col. I and

1. Fill in your 2005 federal adjusted gross income from line 37 of your

Col. II.

federal Form 1040 (line 21 of Form 1040A if you claimed the tuition and

6. The amount on line 6 is your recomputed federal adjusted gross income

fees deduction on that form).

based on the Internal Revenue Code in effect for Wisconsin for 2005.

This amount is the starting point for determining Wisconsin taxable

2 & 3. If you sold or otherwise disposed of certain property during 2005, the

income on Form 1.

gain or loss reportable from such sale may differ for Wisconsin and

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Instructions For Completing Wisconsin Schedule I - 2005

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