Instructions For Completing Wisconsin Schedule I

23. Tax-Favored Withdrawals from Retirement Plans for

29. Cancellation of Indebtedness Income

Hurricane Katrina Relief

(a) Federal – For discharges on or after August 25, 2005,

(a) Federal – For distributions on or after August 25, 2005,

individuals may exclude from gross income discharge of

Hurricane Katrina victims may withdraw up to $100,000 from

indebtedness income when such indebtedness is discharged

an IRA or eligible retirement plan without penalty. Taxpayers

in response to damage from Hurricane Katrina. (Public

who are able to repay the distributions have three years to repay

Law 109-73)

the funds to qualify for rollover treatment. Otherwise, they

(b) Wisconsin – Income from discharge of indebtedness is

will be taxed on their distribution over three years. (Public

generally taxable as provided under the provisions of the

Law 109-73)

Internal Revenue Code as amended to December 31, 2004.

(b) Wisconsin – Early distributions from an IRA or other retirement

plan are included in Wisconsin gross income and are subject to

30. Replacement Period for Nonrecognition of Gain

a penalty.

(a) Federal – In the case of an involuntary conversion on or after

24. Recontributions of Withdrawals for Home Purchases

August 25, 2005, the replacement period is extended to five

years for property damaged by Hurricane Katrina. (Public

(a) Federal – Taxpayers who withdrew funds from an IRA or other

Law 109-73)

eligible retirement plan after February 28, 2005, for a first-time

home purchase, but who could not complete that purchase

(b) Wisconsin – The replacement period for involuntarily

because of Hurricane Katrina, may put the funds back in their

converted property is four years for the personal residence of an

IRA or other eligible retirement plan without penalty. (Public

individual whose principal place of business is located within

Law 109-73)

a Presidentially-declared disaster area and two years for

business property.

(b) Wisconsin – The treatment of contributions to an IRA or other

retirement plan is determined under the provisions of the

Internal Revenue Code as amended to December 31, 2004.

B. ITEMS AFFECTING THE COMPUTATION OF ITEMIZED

DEDUCTIONS

25. Loans from Qualified Plans

(a) Federal – For loans made after September 22, 2005, Hurricane

1. Medical Expense Deduction

Katrina victims can borrow up to $100,000 from a qualified

employer plan. Any required payment due date for outstanding

(a) Federal – Any payment or distribution out of a health savings

loans may be delayed. (Public Law 109-73)

account for qualified medical expenses shall not be treated as an

expense paid for medical care for purposes of claiming an

(b) Wisconsin – The maximum amount that may be borrowed from

itemized deduction for medical and dental expenses. (Public

a qualified employer plan is $50,000. The treatment of loans is

Law 108-173)

determined under the provisions of the Internal Revenue Code

as amended to December 31, 2004.

(b) Wisconsin – Payments or distributions out of a health savings

account that are used for qualified medical expenses are an

26. Exemption for Housing Hurricane Katrina Displaced

allowable itemized deduction.

Individuals

2. Charitable Contributions for Tsunami Victims

(a) Federal – Individuals who use their principal residence to

provide housing free of charge to certain Hurricane Katrina

(a) Federal – Contributions made in January 2005 for the relief of

displaced individuals for at least 60 consecutive days may claim

victims in areas affected by the December 26, 2004, Indian

a special $500 deduction for each evacuee residing in the

Ocean tsunami may be treated as if made on December 31,

taxpayer’s home (maximum deduction $2,000). (Public

2004. (Public Law 109-1)

Law 109-73)

(b) Wisconsin – Charitable contributions made in January 2005 are

(b) Wisconsin – The exemption for housing Hurricane Katrina

deductible on 2005 Schedule A and may be used for the 2005

displaced individuals does not apply for Wisconsin tax

Wisconsin itemized deduction credit.

purposes.

3. Suspension of Limitations on Charitable Contributions

27. Mileage Reimbursements to Charitable Volunteers Excluded

From Gross Income

(a) Federal – Qualified cash contributions to certain charitable

organizations made from August 28, 2005, through Decem-

(a) Federal – Reimbursement received by a volunteer from a

ber 31, 2005, are not subject to the 50% limitation. (Public

sec. 170(c) organization for use of a passenger automobile in

Law 109-73)

connection with providing relief to Hurricane Katrina victims

is excluded from income up to the amount that equals the full

(b) Wisconsin – Contributions to tax-exempt charitable

standard business mileage rate. (Public Law 109-73)

organizations are limited to 50% of the taxpayer’s adjusted

(b) Wisconsin – Mileage reimbursements for charitable use of an

gross income.

automobile are included in Wisconsin income to the extent the

reimbursement exceeds expenses or 14¢ per mile.

4. Standard Mileage Rate for Charitable Use of Vehicle

(a) Federal – Effective August 25, 2005, the standard mileage rate

28. Charitable Deduction for Contributions of Food Inventory

for charity work related to Hurricane Katrina is 70% of the

(a) Federal – Charitable contributions of food inventory by a trade

standard business mileage rate. The new rate is 29 cents-per-

or business made between August 28, 2005, and December 31,

mile during the period of August 25, 2005, through August 31,

2005, are not subject to the usual sec. 170(e) limitations on

2005, and 34 cents-per-mile from September 1 to the end of the

contributions of ordinary income property. (Public

year. (Public Law 109-73)

Law 109-73)

(b) Wisconsin – The standard mileage rate for charitable use of a

(b) Wisconsin – Charitable contributions of food inventory by a

vehicle is 14 cents-per-mile.

trade or business are determined under the provisions of the

Internal Revenue Code as amended to December 31, 2004.

Instructions For Completing Wisconsin Schedule I - 2005 Page 4

Related Articles

Related forms

Related Categories