Instructions For Form 3 - Wisconsin Partnership Return

General Instructions

Page 2

Who Must File

Purpose of Form

Every partnership and limited liability company treated as a partner-

Form 3 is used to report the income, deductions, gains, losses, etc.,

ship with income from Wisconsin sources, regardless of the amount,

from the operation of a partnership. In addition to filing Form 3,

must file Form 3. For example, a partnership must file a return if it

partnerships must file Form 3S to compute their temporary recycling

has income from:

surcharge. For an explanation of the surcharge, see page 3.

• Business transacted in Wisconsin,

Definitions

• Personal or professional services performed in Wisconsin, or

• Real or tangible personal property located in Wisconsin.

Partnership — A partnership is an association of two or more per-

sons to carry on as co-owners a trade or business for profit. The term

Exceptions:

“partnership” includes a limited partnership, registered limited liabil-

• A syndicate, pool, joint venture, or similar organization that isn’t

ity partnership, foreign registered limited liability partnership,

required to file a federal partnership return because it has elected

syndicate, group, pool, joint venture, or other unincorporated organi-

under Internal Revenue Code (IRC) section 761(a) not to be

zation, through or by means of which any business, financial

treated as a partnership for federal income tax purposes may make

operation, or venture is carried on, and is not, within the meaning of

a similar election for Wisconsin purposes. To make the election,

the Wisconsin income tax law, a corporation, trust, estate, or sole

attach a copy of the federal election statement to the Form 3 filed

proprietorship.

with the Department of Revenue for the year of election.

Limited Partnership — A limited partnership is a partnership com-

If the Wisconsin election is made, the organization generally

posed of at least one general partner and one or more limited partners.

won’t have to file Form 3 except for the year of election. How-

Registered Limited Liability Partnership — A partnership formed

ever, the Department of Revenue may require the organization to

pursuant to an agreement governed by the laws of Wisconsin and

file a return so that a partner’s Wisconsin tax liability may be

registered under sec. 178.40, Wis. Stats.

computed.

Foreign Registered Limited Liability Partnership — A limited

• Publicly traded partnerships treated as corporations under IRC

liability partnership formed pursuant to an agreement governed by the

section 7704 must file Wisconsin Form 4 or 5 instead of Form 3.

laws of a state other than Wisconsin or another country and registered

• Limited liability companies treated as corporations for federal

under the laws of that jurisdiction.

income tax purposes must file Wisconsin Form 4 or 5 instead of

Form 3.

General Partner — A general partner is a partner who is personally

liable for partnership debts.

• Single member limited liability companies that are disregarded as

separate entities under IRC section 7701 are disregarded as sepa-

Limited Partner — A limited partner is a partner whose personal

rate entities for Wisconsin purposes. The member is required to

liability for partnership debts is limited to the amount of money or

include the income and expenses of the limited liability company

other property that the partner contributed or is required to contribute

on the member’s return.

to the partnership.

• Common trust funds are treated as fiduciaries under Wisconsin

Note: A partner who has the authority to act for or bind the partner-

law and must file Wisconsin Form 2 instead of Form 3.

ship in any way and/or to participate in any way in the management

or business affairs of the partnership is deemed to be a general part-

Note: The Department of Revenue may require a partnership with

ner, even if the person is defined as a limited partner in the

Wisconsin resident partners to file a Wisconsin partnership return

partnership agreement.

even though it has no Wisconsin business or income. For example, an

out-of-state partnership that does no business in Wisconsin, has no

Limited Liability Company — A limited liability company (LLC)

property in Wisconsin, and has no income from Wisconsin sources

is an entity formed under state law by filing articles of organization

may be requested to file a partnership return to enable the Department

as an LLC. Unlike a partnership, none of the members of an LLC are

of Revenue to compute a Wisconsin resident partner’s Wisconsin tax

personally liable for its debts. However, members or other persons

liability.

may be personally liable for the payment of taxes based on their

responsibilities or actions. An LLC may be classified for federal

When and Where to File Return

income tax purposes as a partnership, a corporation, or as on entity

disregarded as a separate entity from its owner. If an LLC is classified

The return must be filed with the Wisconsin Department of Revenue,

as a partnership for federal income tax purposes, it is treated as a

P.O. Box 59, Madison, WI 53785-0001, by the 15th day of the 4th

partnership for Wisconsin purposes. An LLC classified as a corpora-

month following the close of the partnership’s taxable year.

tion for federal income tax purposes is treated as a corporation by

Wisconsin. An LLC disregarded as a separate entity for federal

Extension of Time to File

income tax purposes is also disregarded as a separate entity for Wis-

Any extension allowed by the Internal Revenue Service for filing the

consin income tax purposes. For more information, obtain

federal return automatically extends the due date for Wisconsin

Publication 119, Limited Liability Companies (LLCs), from any

provided you attach a copy of the federal extension to your Wisconsin

Department of Revenue office.

return. If you aren’t requesting a federal extension, but you need

additional time to file your Wisconsin return, you may obtain an

extension available to partnerships under federal law. To receive the

Wisconsin extension, you must attach to your Wisconsin return a

Instructions For Form 3 - Wisconsin Partnership Return - 1998 Page 2

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