Instructions For Form 3 - Wisconsin Partnership Return

Line-by-Line Instructions (continued)

Page 6

stock are not deductible by partnerships. These amounts must be

Partners of partnerships that rehabilitate certified historic structures

shown as additions to ordinary income on line 1, column c.

located in Wisconsin and used for business purposes may claim a

credit. The partnership computes the credits on Schedule HR, Wis-

• Certain basis differences are treated as modifications. For exam-

consin Historic Rehabilitation Credits.

ple, for Wisconsin purposes, property taxes paid on vacant land

had to be capitalized for 1964 and prior taxable years. A transi-

The State Historical Society of Wisconsin administers the historic

tional adjustment must be made for this basis difference upon

preservation program. For more information about this program,

disposition of the property. Recompute the gain or loss on federal

write to the Division of Historic Preservation, State Historical Society

Form 4797 or federal Schedule D, as appropriate, by substituting

of Wisconsin, 816 State Street, Madison, WI 53706-1488 or call

the Wisconsin basis for the federal basis. Show the difference as

(608) 264-6500.

a modification in column c.

Line 21. On an attached schedule, show any items and amounts

• Income reported on line 16 or 17 that is exempt for federal pur-

not included on lines 1 through 20 that must be reported separately

poses but taxable by Wisconsin, such as state and local

to partners. Include the federal amount, any adjustment, and the

government bond interest, is shown as a subtraction in column c.

amount determined under Wisconsin law of each item.

If more income is nontaxable for Wisconsin purposes than for

federal purposes, show the additional amount of exempt income

If the interest income on line 4a, column b, includes any interest from

as an addition. The Wisconsin amount in column d is the amount

United States government obligations that is taxable for federal

of tax-exempt income for Wisconsin purposes.

purposes but exempt from Wisconsin income taxes, report the amount

of United States government interest on this schedule.

• Expenses on line 18 that are nondeductible federally but deducti-

ble for Wisconsin purposes are shown as subtractions in

If this partnership is a limited liability company treated as a partner-

column c. If more expenses are nondeductible for Wisconsin pur-

ship, does business in another state, and is required to pay an income

poses than for federal purposes, show the additional amount of

or franchise tax to the other state, Wisconsin resident partners may be

nondeductible expenses as an addition. The Wisconsin amount in

able to claim credits on their individual income tax returns for their

column d is the nondeductible expense for Wisconsin purposes.

proportionate shares of the tax paid. Credits are allowed only if the

income taxed by the other state is considered income for Wisconsin

Note: If the interest income on line 4a, column b, includes any inter-

income tax purposes.

est from obligations of the United States government and its

instrumentalities, identify the amount on a separate schedule for

Attach a schedule showing the name of each state to whom a fran-

line 21. Do not subtract this amount on Schedule 3K, line 4a, col-

chise or income tax was paid and the amount of the franchise or

umn c.

income tax paid to that state. In addition, attach a copy of the fran-

chise or income tax return filed with each state for which this credit

Column d. Wisconsin amount — Combine the amount in

is claimed.

column b with any adjustments in column c and enter the result.

Line 22. Combine lines 1 through 7 in columns b and d. From

Line 12a. Enter, in column d, the available development zones

the result, subtract the sum of lines 8 through 11, 13a, and 15. Add

credit as computed on Wisconsin Schedule DC. Attach Schedule

or subtract, as appropriate, any income or deductions reported on

DC to the Form 3 filed with the department.

line 21 that affect the computation of taxable income. In column d,

also include the amount of any state and local government bond

Special tax credits may be available for partners of partnerships doing

interest from line 16, column c, which is taxable by Wisconsin.

business in Wisconsin development zones. These credits are com-

puted on Schedule DC, Wisconsin Development Zones Credit.

Signatures — A general partner of the partnership must sign the

form at the bottom of page 1. If the return is prepared by someone

The Wisconsin Department of Commerce administers the Wisconsin

other than an employe of the partnership, the preparer’s signature

development zones programs. For more information about the pro-

is also required.

grams, write to the Division of Community Development, Wisconsin

Department of Commerce, P.O. Box 7970, Madison, WI 53707-7970

Attachments — Attach a copy of the federal Form 1065 and

or call (608) 266-3751.

supporting schedules. Also attach a copy of either Wisconsin

Schedule 3K-1 or federal Schedule K-1, as appropriate, for each

Line 12b. Enter, in column d, the amount of manufacturer’s

partner.

sales tax credit computed by the partnership from Schedule 3Z,

line 12.

Schedule 3K-1 – Partner’s Share of Income,

Partnerships engaged in manufacturing or who have manufacturer’s

Deductions, etc.

sales tax credits passed through to it from other entities must com-

plete Schedule 3Z to determine the amount of manufacturer’s sales

Schedule 3K-1 shows each partner’s share of the partnership’s in-

tax credit which it may pass through to its partners. Attach Sched-

come, deductions, etc., which have been summarized on

ule 3Z to the Form 3 filed with the department.

Schedule 3K. Like Schedule 3K, Schedule 3K-1 requires an entry for

Line 12c. Enter, in column d, the available supplement to the

the federal amount, adjustment, and amount determined under Wis-

federal historic rehabilitation tax credit as computed on Wisconsin

consin law of each applicable partnership item.

Schedule HR. Attach Schedule HR to the Form 3 filed with the

Prepare a Schedule 3K-1 for each individual or entity that was a

department.

partner in the partnership at any time during the partnership’s taxable

year. Attach a copy of each partner’s Schedule 3K-1 to the Form 3

Instructions For Form 3 - Wisconsin Partnership Return - 1998 Page 6

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