Schedule Cg - Income Tax Deferral Of Long-Term Capital Gain - 2013 Page 2
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2Schedule CG and Instructions
Page 2 of 2
Definitions
Specific Instructions
“Financial institution” means any bank, savings bank,
Line 4
Fill in the amount of long-term capital gain
savings and loan association or credit union that is authorized
deposited in a segregated account in a financial institution.
to do business under state or federal laws relating to financial
If the long-term gain will be reinvested in a “qualified new
institutions.
business venture,” do not fill in more than $10,000,000. The
$10,000,000 limitation does not apply if the long-term gain
“Long-term capital gain means the gain realized from the sale
was reinvested in a “qualified Wisconsin business.”
of any capital asset held more than one year that is treated as
a long-term gain under the Internal Revenue Code.
This is the amount of long-term capital gain that may be
deferred if reinvested. Individuals claim the deferral of gain
“Qualified new business venture” is a business certified
when completing Wisconsin Schedule WD.
by the Wisconsin Economic Development Corporation
(WEDC). A business may be certified, and may maintain
Lines 8 and 9 Complete line 8 if the long-term gain was
such certification, only if the business is engaged in one of
reinvested in a “qualified new business venture.” Complete
the following:
line 9 if the long-term gain was reinvested in a “qualified
• Developing a new product or business process.
Wisconsin business.” Fill in the name of the business and
the federal employer identification number (FEIN) of the
• Manufacturing, agriculture, or processing or assembling
business.
products and conducting research and development.
Line 11
The basis of the investment is calculated by
The business must submit an application to WEDC in each
subtracting the deferred gain (line 4) from the amount of the
calendar year for which it desires certification.
investment in the “qualified new business venture” or the
“qualified Wisconsin business” (line 10). The reduced basis
“Qualified Wisconsin business” means a business certified
will result in a larger gain (or smaller loss) for Wisconsin than
by the WEDC. The business must submit an application to
for federal purposes when the investment is sold or otherwise
WEDC in each calendar year for which it desires certification.
disposed of in the future.
A business may be certified if:
Note: If you invested the deferred gain in a “qualified
• The amount of payroll compensation paid by the business
Wisconsin business” and hold the investment for 5 years, if
in Wisconsin is equal to at least 50 percent of the amount of
certain conditions are met you may be able to exclude gain
all payroll paid by the business, and
from the sale or disposition of the investment. The business
• The value of real and tangible personal property owned or
must have been certified for the year of the investment and
for two of the subsequent four years. The gain that may be
rented and used by the business in Wisconsin is equal to at
excluded does not include the amount of deferred gain.
least 50 percent of the value of all real and tangible personal
property owned or rented and used by the business.
Attachments
Procedures
A copy of Schedule CG must be enclosed with your Wisconsin
income tax return.
An individual may subtract from federal adjusted gross
income any amount (limited to $10,000,000 if reinvestment is
in a “qualified new business venture”) of a long-term capital
Additional Information
gain if the individual does all of the following:
If you have questions about the deferral of gain, contact any
• Deposits the gain into a segregated account in a financial
Wisconsin Department of Revenue office or write or call:
institution.
Customer Service Bureau,
• Within 180 days after the sale of the asset that generated
Wisconsin Department of Revenue
the gain, invests all of the proceeds in the account in a
Mail Stop 5-77
“qualified new business venture” or “qualified Wisconsin
PO Box 8949
business.”
Madison WI 53708-8949
• Attaches completed Schedule CG to the individual’s
Telephone: 608) 266-2486
Wisconsin income tax return for the taxable year in which
the deferral of gain is claimed.
You may also email your questions to:
income@revenue.wi.gov
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