Instructions For 2016 Schedule Qi - Sale Of Investment In A Qualified Wisconsin Business Page 6
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9• The sale of the investment is entered on Schedule QI as follows:
Line 1
Date investment sold: 12 31 2016
Line 2
Purchase date of initial investment in the qualified Wisconsin business: 05 31 2011
Line 3
Type of investment:
Stock purchase
X Partnership interest
LLC membership
Line 4
Entity Name:
XYZ LLC
FEIN: xx-xxxxxxx
Line 5
Sales price of investment as reported on federal Form 8949 . . . . . . . . . . . . . . . . . . . . 1000000
Line 6
Cost or other basis adjusted for Wisconsin as reported on Schedule T . . . . . . . . . . . .
100000
Line 7
Deferred long-term gain included in the investment . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
Line 8
Add line 6 and line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100000
Line 9
Amount used to determine non-taxable qualified gain.
Subtract line 8 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
900000
Non‑taxable Long‑Term Gain
Line 10 Amount you computed to be non-taxable qualified gain.
(Enter on line 15a of Schedule WD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
360000
Taxable Long‑Term Gain
Line 11
Add line 6 and line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
460000
Line 12 Net taxable long-term gain or (loss). Subtract line 11 from 5 . . . . . . . . . . . . . . . . . . .
540000
Example 2 (Deferred Gain)
• Partnership XYZ’s Partners A and B each have a 50% interest.
• The partnership was a qualified Wisconsin business for 2011, 2012, 2013, and 2014.
• The investment made in XYZ on 5-31-2011 included $20,000 of deferred long-term capital gain from an asset previously sold.
• On 12-31-2016, Partner A liquidated its partnership interest in XYZ.
Investments Partner A made in XYZ and the gain from the sale of its partnership interest in XYZ are as follows:
(The chart below reflects federal basis and has not been adjusted for Wisconsin)
Date of
FMV of the
Sales Price
Tax Basis of
Gain on Sale
Investment
Investment
12-31-2016
Investment
of Investment
5-31-2009
$ 35,000
5-31-2010
$ 20,000
5‑31‑2011
$ 30,000
12‑31‑2011
$ 50,000
12-31-2012
$ 15,000
12-31-2013
$ 10,000
12-31-2014
$ 15,000
12-31-2015
$ 10,000
12-31-2016
$ 15,000
Total
$200,000
$1,000,000
$100,000
$900,000
• Only the investments made on 5-31-2011 and 12-31-2011 are considered a qualified Wisconsin investment.
– The business did not register with the Wisconsin Department of Revenue (DOR) to be a qualified Wisconsin business in
2015 and 2016; therefore, investments in XYZ made in 2009, 2010, 2015, and 2016 do not qualify.
– The investments made in 2012, 2013, and 2014 are not qualified Wisconsin investments because the investments were
not held at least five years.
• In this example, the investment made on 5-31-2011 includes a $20,000 deferred long-term capital gain from an asset
previously sold.
– The deferred long-term gain of $20,000 must be reported on Schedule T and Schedule WD.
– The basis on line 6 of Schedule QI must be adjusted to reflect the $20,000 of deferred long-term gain. This results in an
$80,000 basis ($100,000 - $20,000) on line 6 of Schedule QI.
- 6 -
I-177 (N. 12-16)
Wisconsin Department of Revenue
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