Instructions For 2014 Form 6y: Wisconsin Subtraction Modification For Dividends printable pdf download

Instructions for 2014 Form 6Y:

Wisconsin Subtraction Modification for Dividends

Purpose of Form 6Y

If the payee corporation is in a combined group, it

must own the stock of the payer corporation for the

Combined groups complete Form 6Y to report the

payee’s entire taxable year that is included in the

amount of dividends that may be subtracted from

combined return.

federal taxable income under the Wisconsin divi-

dends received deduction. Combined groups also

For purposes of Form 6Y, the Wisconsin dividends

use Form 6Y to report the amount of intra-group divi-

received deduction under sec. 71.26(3)(j), Wis.

dends that may be eliminated from combined unitary

Stats., is called the “70% ownership” dividend deduc-

income in cases where the Wisconsin dividends re-

tion.

ceived deduction does not apply.

Elimination of Dividends from Combined Unitary

Enter the information for each member in a separate

Income

column. If there are more than three members, use

additional Forms 6Y. For example, if there are seven

The elimination of dividends from combined unitary

members in the combined group, enter members one

income applies only to corporations that are in com-

through three on Form 6Y (do not complete the com-

bined groups. Under sec. 71.255(4)(f), Wis. Stats.,

bined total column yet). Next, enter members four

and s. Tax 2.61(6)(e), Wisconsin Administrative

through six on an additional Form 6Y (do not com-

Code, a dividend paid between two members of the

plete the combined total column yet). Finally, com-

same combined group may be eliminated from the

plete a new Form 6Y for the seventh and final mem-

group’s combined unitary income if it meets the fol-

ber. Complete the combined total column on the last

lowing requirements:

Form 6Y for all group members.

•

The dividend doesn’t already qualify for the Wis-

consin dividends

received deduction under

sec. 71.26(3)(j), Wis. Stats.

NOTE: Do not use Form 6Y to report dividends that

•

The dividend was paid out of earnings and profits

are

nontaxable

for

reasons

other

than

the

attributable to net income or loss that was includ-

Wisconsin dividends received deduction or the

ed in the group’s combined unitary income in the

elimination of intra-group dividends from combined

current taxable year or a prior taxable year

unitary income. See the instructions for Form 6,

•

The dividend does not exceed the payee’s basis

Part II, line 4f, for reporting those dividends.

in the payer’s stock

Transitional Rule. If the intra-group dividend was

Below is an explanation of each type of dividend re-

paid out of earnings and profits (E&P) that were gen-

portable on Form 6Y, followed by line-by-line instruc-

erated in a taxable year beginning before January 1,

tions.

2009, the dividend may be eliminated from combined

unitary income to the extent the net income that gen-

erated the E&P would have been included in com-

bined unitary income under sec. 71.255, Wis. Stats.,

(the statute requiring combined reporting) if that sec-

Wisconsin Dividends Received Deduction

tion had been in effect in those years.

The Wisconsin dividends received deduction is avail-

Computing Earnings and Profits. The following

able to corporations that are separate entity filers as

rules apply to the computation of E&P for purposes of

well as combined group filers. Under sec. 71.26(3)(j),

the dividend elimination:

Wis. Stats., a dividend is deductible for Wisconsin

purposes if it meets the following requirements:

1. LIFO Rule: Dividends are treated as paid first out

•

It is paid on common stock, and

of current E&P. If the dividends paid exceed cur-

rent E&P, then the dividends are treated as paid

•

The corporation receiving the dividend owned at

out of E&P accumulated in preceding years, be-

least 70% of the total combined voting stock of

ginning with the year closest to the current year.

the payer corporation for the entire taxable year.

IC-425

Instructions For 2014 Form 6y: Wisconsin Subtraction Modification For Dividends

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