Instructions For 1998 Schedule Dc - Wisconsin Department Of Revenue (Page 5 of 7) in pdf

Line 4. Enter the amount of development zones credit

tions in the development zone during the taxable year, you

passed through from tax-option (S) corporations, partner-

may not carry over to future taxable years any unused credits

ships, LLCs treated as partnerships, estates, and trusts. The

from the taxable year during which operations cease or from

pass-through credit is shown on Schedule 5K-1 for share-

previous taxable years. If your certification to claim tax

holders of tax-option (S) corporations, Schedule 3K-1 for

benefits is revoked, you may not claim any credits for the

partners and LLC members, and Schedule 2K-1 for ben-

taxable year in which your benefits are revoked nor may you

eficiaries of estates and trusts.

carry over unused credits from previous years.

Line 5. If you do not have any development zone credit

carryovers from prior years, enter the amount from line 5 on

the appropriate line of your Wisconsin franchise or income

Part II — Individuals, Estates, and Trusts —

tax return.

Limitation on Tax Credit Carryovers

If you have unused development zone credits from years

Individuals (including partners, members of LLCs treated as

beginning before January 1, 1998, the amount of credit that

partnerships, shareholders of tax-option (S) corporations,

you claim this year may be limited. Individuals, estates, and

and beneficiaries of estates or trusts), estates, and trusts that

trusts determine the amount of credit currently allowable in

have unused development zone credits from years beginning

Part II and corporations determine the allowable credit in Part

before January 1, 1998, must complete Part II.

III.

Except for the former research credit and the new develop-

Special instructions apply to pass-through entities.

ment zones credit, the credits may be offset only against tax

due that is attributable to income from business operations in

Tax-option (S) corporations, partnerships, and LLCs

the development zone and tax attributable to income from

treated as partnerships: Prorate the development zones

other business operations that are directly related to the

credit on line 5 among the shareholders, partners, or mem-

business operations in the development zone.

bers. Show the credit for each shareholder on Schedule 5K-1

and for each partner or member on Schedule 3K-1.

Example: An individual operates a car repair business at two

locations, one in a development zone and the other outside

Estates and trusts: Prorate the development zones credit

the zone. Income from the car repair activities conducted

on line 5 between the estate or trust itself and its beneficiaries

outside the development zone is income from directly related

in proportion to the income allocable to each. Show the

business operations.

estate’s or trust’s portion of the credit on the dotted line to the

left of line 5. Label it “Form 2 portion” and claim this amount

Caution: If you receive tax credits from more than one sole

on the appropriate line of Form 2. Show the credit for each

proprietorship, tax-option (S) corporation, partnership, LLC

beneficiary on Schedule 2K-1.

treated as a partnership, estate, or trust, you must compute

the allowable credits from each entity separately. You may

not offset credits from a business that incurred a loss against

Required Attachments to Schedule DC

the tax owed on income from another business entity that

operated at a profit. Attach a worksheet to Schedule DC

To claim the development zones credit, you must attach the

showing your calculations.

following information to Schedule DC:

Line 7. Enter the Wisconsin net income (loss) from the

A copy of your certification for tax benefits issued by the

Department of Commerce.

conduct of business operations in a Wisconsin development

zone. Shareholders of tax-option (S) corporations, partners,

members of LLCs treated as partnerships, and beneficiaries

A statement from the Department of Commerce verifying

of estates and trusts should include their shares of the

the amount of credit for environmental remediation and

corporation, partnership, LLC, estate, or trust net develop-

for job creation or retention.

ment zone income if development zone credits flow through

from the entity.

If the development zones credit is passed through from a tax-

option (S) corporation, partnership, LLC treated as a partner-

Line 8. Enter the Wisconsin net income (loss) from the

ship, estate, or trust, attach a copy of your Schedule 5K-1,

conduct of other business operations that are directly related

3K-1, or 2K-1 to Schedule DC instead of the above informa-

to the business operations conducted in a Wisconsin

tion.

development zone.

Line 11. Figure the amount to enter on line 11 as follows:

Carryover of Unused Credit

Unused development zones credits may be carried forward

for up to 15 years. However, if you cease business opera-

Instructions For 1998 Schedule Dc - Wisconsin Department Of Revenue Page 5

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