Instructions For Completing Wisconsin Schedule

Complete Col. III as follows:

CAUTION At the time these instructions were printed, Congress

was considering further legislation, and that further legislation

• If the amounts in Col. I and Col. II are positive numbers

could affect the taxable year 2001. Except for changes relating

and the amount in Col. II is larger than the amount in Col. I,

to depreciation and amortization, federal law changes enacted

subtract Col. I from Col. II. Fill in the difference in

after December 31, 1999, do not apply for Wisconsin purposes

Col. III.

for 2001 unless retroactively adopted by the Wisconsin

Legislature.

• If the amounts in Col. I and Col. II are positive numbers

and the amount in Col. I is larger than the amount in Col. II,

If federal law changes are enacted which affect 2001 tax returns,

subtract Col. II from Col. I. Fill in the difference as a

you may obtain information on the Wisconsin treatment of such

negative number in Col. III.

changes from any Wisconsin Department of Revenue office.

• If the amounts in Col. I and Col. II are negative numbers

and the amount in Col. II is larger than the amount in Col. I,

subtract Col. I from Col. II. Fill in the difference as a

negative number in Col. III. When figuring which amount

is larger, treat both amounts as if they were positive

numbers.

(a) Federal – An exclusion is allowed for 50% of the gain

• If the amounts in Col. I and Col. II are negative numbers

from the sale or exchange of qualified small business

and the amount in Col. I is larger than the amount in Col. II,

stock issued after August 10, 1993, and held for more

subtract Col. II from Col. I. Fill in the difference as a

than five years.

positive number in Col. III. When figuring which amount

(b) Wisconsin – Gain from the sale or exchange of

is larger, treat both amounts as if they were positive

qualified small business stock is included in gross

numbers.

income.

6. The amount on line 6 is your recomputed federal adjusted

gross income based on the Internal Revenue Code in effect

for Wisconsin for 2001. This amount is the starting point for

(a) Federal – An exclusion from gross income is allowed

determining Wisconsin taxable income on Form 1.

for extraterritorial income that is qualifying foreign

trade income. (Public Law 106-519)

(b) Wisconsin – The treatment of extraterritorial income

Whenever federal adjusted gross income has been increased

is determined under the provisions of the Internal

or decreased in Part I of Schedule I, itemized deductions

Revenue Code as amended to December 31, 1999.

which are computed using federal adjusted gross income (for

example, medical expenses and charitable contributions)

may require adjustment. The deductible amounts of any such

(a) Federal – The expensing of environmental

items used to compute the Wisconsin itemized deduction

remediation costs is no longer limited to targeted

credit must be determined by using the federal adjusted gross

areas. (Public Law 106-554)

income computed on line 6 of Part I.

(b) Wisconsin – The expensing of environmental

See the listing under Section B of ITEMS REQUIRING

remediation costs is limited to qualified expenses at

ADJUSTMENT for other itemized deductions that require

a qualified contaminated site within a targeted area.

adjustment.

(a) Federal – For courses that begin after December 31,

ITEMS REQUIRING ADJUSTMENT

2001, up to $5,250 of benefits received from an

Following are brief explanations of differences between federal

employer’s educational assistance plan may continue

and Wisconsin law which were known at the time this form was

to be excluded from an employee’s taxable income

printed (November 20, 2001).

under the provisions of sec. 127 of the Internal

Revenue Code. The exclusion also applies to expenses

The “Federal” explanation indicates how an item is to be treated

for graduate level courses that begin after Decem-

for federal income tax purposes as of December 31, 2001. The

ber 31, 2001. (Public Law 107-16)

“Wisconsin” explanation indicates how the item is to be treated

(b) Wisconsin – The exclusion available under sec. 127

for Wisconsin purposes under the Internal Revenue Code

of the Internal Revenue Code for employer-provided

enacted as of December 31, 1999.

educational assistance does not apply to courses

beginning after December 31, 2001, or to graduate

If you need additional information regarding these items, contact

level courses.

any Wisconsin Department of Revenue office.

Instructions For Completing Wisconsin Schedule - 2001 Page 2

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