Instructions For 1998 Form 4i - Wisconsin Insurance Company Franchise Tax Return (Page 2 of 4) in pdf

Page 2

consolidated returns. In addition, each corporation must make its own

relating to an additional deduction for insurers required to discount unpaid

estimated tax payments.

losses, doesn’t apply for Wisconsin purposes.

Wisconsin Use Tax — Insurers that purchase taxable tangible personal

Caution: Federal law changes enacted after December 31, 1997, generally

property or taxable services for storage, use, or consumption in Wisconsin

won’t apply for Wisconsin purposes unless subsequently adopted by the

without payment of a state sales or use tax are subject to a Wisconsin use tax

Wisconsin Legislature, except for depreciation and amortization as noted

and must file a Wisconsin sales and use tax return. For more information or

below.

forms, call (608) 266-2776 or write to the Compliance Bureau, Wisconsin

Department of Revenue, P.O. Box 8902, Madison, WI 53708-8902.

Note: If the corporation is a small company as defined in IRC section

831(b)(2), you may elect to be taxed on taxable investment income as

Penalties for Not Filing or Filing Incorrect Returns — If you don’t file a

provided in IRC section 831(b), rather than on net income.

franchise tax return that you are required to file, or if you file an incorrect

return due to negligence or fraud, interest and penalties may be assessed

Line 2a. Enter any loss carryforward, including any capital loss carryforward

against you. The interest rate on delinquent taxes is 18% per year. Civil

previously deducted for Wisconsin, that is being deducted in the calculation

penalties may be as much as 100% of the amount of tax not reported on the

of federal taxable income.

return. Criminal penalties for filing a false return include a fine of up to

$10,000 and imprisonment.

Line 2c. Enter interest income received on state and municipal obligations

and any other interest income that is exempt from federal income tax and isn’t

included in federal taxable income.

Line-by-Line Instructions

Line 2d. Enter taxes imposed by Wisconsin, any other state, and the District

(The numbering corresponds with the line numbers on Form 4I, page 1,

of Columbia that are value-added taxes, single business taxes, or taxes on or

unless otherwise indicated.)

measured by net income, gross income, gross receipts, or capital stock and

were deducted in computing federal taxable income.

Period Covered — File the 1998 return for calendar year 1998 and fiscal

years that begin in 1998. For a fiscal year or a short-period return, fill in the

Line 2e. Enter environmental tax (imposed under IRC section 59A) deducted

taxable year beginning and ending dates in the taxable year space at the top

in computing federal taxable income.

of the form.

Line 2f. Enter the amount by which the federal deduction for depreciation or

Name and Address — If you received a mailing label with the corpora-

amortization exceeds the Wisconsin deduction. For property placed in service

tion’s name and address, place it in this area. Make any necessary corrections.

in 1998, you may compute depreciation or amortization under the same

Otherwise, print or type the corporation’s name and address. Indicate a

method as for federal purposes. Otherwise, compute depreciation under the

change in the corporation’s name or address from that shown on last year’s

Internal Revenue Code as amended to December 31, 1997. An asset placed

Wisconsin return filed by checking the appropriate box.

in service before 1998 must continue to be depreciated or amortized under the

method allowable for Wisconsin purposes for the year in which it was placed

A. Federal Employer Identification Number — Enter the corporation’s

in service. Many differences in Wisconsin and federal depreciation and amor-

federal employer identification number (EIN). If you haven’t yet applied for

tization existed before January 1, 1987, including the following:

a federal EIN, you may do so by filing federal Form SS-4 with the Internal

Revenue Service. (Corporations reporting federally to the Kansas City

IRC section 168(f)(8), relating to a special rule for leases (safe harbor),

Service Center may obtain an EIN by calling (816) 926-5999.)

didn’t apply for Wisconsin purposes. See Wisconsin Tax Bulletin 84 (October

1993, page 22) for further details about Wisconsin’s treatment of safe harbor

B. Seller’s Permit or Use Tax Number — Enter the corporation’s

leases.

Wisconsin seller’s permit, use tax, or consumer’s use tax number.

The federal accelerated cost recovery system (ACRS) wasn’t allowable

C. Wisconsin Employer Identification Number — Enter the corpora-

for Wisconsin purposes for property located outside Wisconsin and first

tion’s Wisconsin employer identification (withholding) number.

placed in service from January 1, 1983, through December 31, 1986. Instead,

depreciation was to be computed under a method permitted by the Internal

D. Wisconsin Business Activity Code — Enter the corporation’s business

Revenue Code as of December 31, 1980, or, in the alternative, the Internal

activity code from the list below which reflects the activity that accounts for

Revenue Code applicable to the calendar year 1972.

the largest percentage of total receipts:

Note: Since the Wisconsin Tax Appeals Commission declared this provision

6310

Life Insurers

unconstitutional in Beatrice Cheese, Inc. vs. Wisconsin Department of

6320

Accident and Health Insurers

Revenue (February 24, 1993), corporations may either (1) claim the same

6330

Fire, Marine, and Casualty Insurers

depreciation deduction as for federal purposes, or (2) continue using their

6390

Insurers Other Than Above

present method of depreciation. Basis differences resulting from the use of

different federal and state depreciation methods are accounted for when the

E. First Return, Final Return, Short Period Return — If this is the first

assets are disposed of in a taxable transaction. For more information, see the

year that you are filing a Wisconsin return because the corporation wasn’t in

tax release in Wisconsin Tax Bulletin 84 (October 1993, page 18).

existence in prior years, check the “First return” box. If the corporation

ceased to exist during the year, check the “Final return” box. Indicate that a

Wisconsin and federal depreciation may have been different in the case

short period return is being filed due to a change in the corporation’s account-

of investment credit property. A corporation electing to claim an investment

ing period or a stock purchase or sale by checking the appropriate box.

tax credit for federal income tax purposes could either (1) claim the credit and

reduce the depreciable basis of the property by one-half of such credit, or (2)

F. State and Year of Incorporation — Enter the state under whose laws

in the case of regular investment tax credit property, claim a reduced invest-

the corporation is organized and the year of incorporation. Only insurers

ment credit and not reduce the depreciable basis of the property.

incorporated in Wisconsin must file Form 4I.

Corporations that claimed an investment tax credit on their federal return (and

G. Amended Return — If this is an amended return, check the box.

reduced the federal basis of the assets) weren’t required to reduce the basis of

Circle the number in front of the line(s) that you are changing. Attach a

the investment credit property for Wisconsin purposes and could either (1)

detailed explanation of the changes made, including any supporting form or

claim the same depreciation for Wisconsin as that claimed for federal

schedule.

purposes (except for item b above) and receive a deduction for the basis

difference in the year the property is disposed of, or (2) claim depreciation on

Line 1. Adjusted Federal Taxable Income — Complete Schedule A,

the asset’s full (unreduced) basis for Wisconsin. (The second method required

page 2, and enter the amount from line 6.

separate depreciation records for Wisconsin purposes.)

For the following property acquired in the 1986 taxable year, deprecia-

tion must be computed under the December 31, 1980, Internal Revenue Code:

Schedule A

(1) residential real property, and (2) property used in farming, as defined in

IRC section 464(e)(1), if the corporation’s Wisconsin gross farm receipts or

Line 1. Enter federal taxable income as determined under the Internal

sales exceeded $155,000 for the 1986 taxable year.

Revenue Code as amended to December 31, 1997. However, IRC section 847,

Instructions For 1998 Form 4i - Wisconsin Insurance Company Franchise Tax Return Page 2

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