Instructions For 2010 Schedule Cu-1: Credit Union Adjustment To Income

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Instructions for 2010 Schedule CU-1:
Credit Union Adjustment to Income
Purpose of Schedule CU-1
Line-by-Line Instructions
The purpose of Schedule CU-1 is to allow credit
These instructions are presented in the order the
unions acting as public depositories for state or local
lines appear on Schedule CU-1:
government funds to adjust their income so
Wisconsin taxable income excludes net income
earned from non-public deposits.
Part I: Percentage of Income Earned from Public
A credit union that is required to file a Wisconsin
and Non-Public Deposits
franchise or income tax return files Schedule CU-1
with Form 4.
■ Lines 1a through 1m. Deposits on Hand – Enter
on line 1a the amount of deposits on hand on Janu-
Special Instructions for Combined Groups
ary 1, 2010, and on lines 1b through 1m the amount
of deposits on hand at the end of each month in
Combined groups should prepare Schedule CU-1
2010. Enter public deposits in column A and total de-
separately for each member of the group that is a
posits in column B. Enter zero (0) in column A for
credit union and is otherwise required to file a Wis-
each month in which no public deposits were held.
consin franchise or income tax return. Complete
■ Line 1n. Totals – Enter on line 1n the totals of
Schedule CU-1 on a separate entity basis for each
applicable group member.
lines 1a through 1m for both columns A and B.
■ Line 2. Monthly Average – Divide the amounts on
Before You Complete Schedule CU-1
line 1n by 13 and enter the results on line 2 for both
columns A and B.
The starting point for computing Wisconsin net in-
come is federal taxable income from Form 1120.
■ Line 3a. Percentage of Public Deposits – Divide
Credit unions which aren’t required to file federal
the amount on line 2, column A, by the amount on
Form 1120 with the Internal Revenue Service deter-
line 2, column B, and multiply by 100. Fill all spaces
mine their starting point by either (1) completing a pro
to the right of the decimal point. Round to the nearest
forma Form 1120, or (2) using the net income (loss)
ten-thousandth of a percent (for example, 12.3456%).
from the NCUA Form 5300, 2010 Yearend Call Re-
port. You must file either the pro forma Form 1120 or
■ Line 3b. Percentage of Non-Public Deposits –
the NCUA Form 5300, whichever you are using, with
Subtract the percentage on line 3a from 100%. Fill all
Form 4.
spaces to the right of the decimal point.
If you are filing a separate Wisconsin return, enter on
Form 4, line 1 the amount from either the pro forma
Form 1120 or the NCUA Form 5300, as applicable. If
the credit union is a member of a combined group,
Part II: Adjustment for Income Earned
include this amount in the members’ federal taxable
from Non-Public Deposits
incomes you report on Form 4R. The total from
Form 4R carries forward to Form 4, line 1.
Expenses related to exempt income from non-public
deposits are nondeductible. The adjustment you
Adjust the amount you reported on Form 4, line 1 to
compute in Part II must be net of all expenses directly
account for Wisconsin addition and subtraction modi-
and indirectly related to the income from non-public
fications. Compute these modifications on Schedules
deposits. You may compute this adjustment using the
V and W, as appropriate, but do not enter the amount
shortcut method or the regular method.
from Schedule W on Form 4, line 4 until you have
completed Schedule CU-1. This is because you will
Under the shortcut method, all expenses, whether
include the amount from line 9 of Schedule CU-1
direct or indirect, are allocated based on the ratio of
(whether positive or negative) as an “other” modifica-
public deposits to non-public deposits. If you are us-
tion on Schedule W, line 13.
ing the shortcut method, complete only lines 4 and 9
of Part II. If you are using the regular method, com-
plete all of lines 4 through 9 of Part II.

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