Instructions For 2010 Form 4cl: Net Capital Loss Adjustments For Combined Group Members printable pdf download

Instructions for 2010 Form 4CL:

Net Capital Loss Adjustments for Combined Group Members



Who Should File Form 4CL

Use the non-sharable capital loss carryovers it

could not include in the group’s aggregate com-

Form 4CL is only for corporations that are combined

putation, and

group members. File Form 4CL only if either A. or B.



Apply all of its available capital losses, including

below is true:

its current year net capital loss from the group’s

aggregate computation, to capital gains that are

A. The corporation has unused capital loss carry-

reportable on a separate entity basis on

overs incurred in taxable years beginning before

Form 4N.

January 1, 2009 (or other non-sharable capital

losses) and the combined group reports a net

A non-sharable capital loss is one which originated:

capital gain on line 18 of Form 4R, Federal Tax-



able Income Reconciliation for Wisconsin Com-

In a taxable year beginning before January 1,

bined Groups, or

2009, or



In the combined unitary income of another

B. The corporation has capital gain/loss items to

combined group, or

report on Form 4N, Wisconsin Nonapportionable

and Separately Apportioned Income, for the tax-



In transactions reportable on a separate entity

able year and the combined group computes a

basis on Form 4N.

suspended net capital loss on line 18 of Form 4R

and part of that suspended net capital loss is at-

As an alternative to completing 2010 Form 4CL, a

tributable to the corporation.

combined group member with non-sharable capital

loss carryovers may choose to carry them back to a

taxable year beginning before 2009, to the extent

NOTE: If neither A. nor B. above is true in its

allowed under section 1212 of the Internal Revenue

entirety, do not file Form 4CL for the corporation.

Code. Also, see s. Tax 2.61(6)(c), Wisconsin Admin-

Also, Form 4CL does not apply to corporations that

istrative Code, for further details regarding elections a

are not combined group members, even if they are

corporation may make regarding its capital loss

filing a Form 4N with the combined return.

carryovers.

Purpose of Form 4CL

Line-by-Line Instructions

Under section 1211 of the Internal Revenue Code,

These instructions are presented in the order the

capital losses may only be used to offset capital

lines appear on Form 4CL:

gains. Under sec. 71.255(4)(i) and (11), Wis. Stats.,

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

Code, the capital loss limitation is determined on an

aggregate basis for the combined group, similarly to

Part I: Net Capital Loss Adjustments

how it is determined for a consolidated group for fed-

eral purposes under Treas. Regs. §1.1502-22 and

■ Line 1. Net Capital Gain Included in Combined

1.1502-23.

Unitary Income – Enter the amount of net capital

gain from Form 4R, line 18, but only if that amount

However, not all capital losses may be included in the

was greater than $0. This is the net capital gain you

aggregate computation for the combined group. The

computed on an aggregate basis for the combined

aggregate computation cannot include non-sharable

group as a whole.

capital loss carryovers or capital gain/loss items that

members must report on a separate entity basis on

■ Line 2. Current Year Net Capital Loss Attribut-

Form 4N.

able to This Member – Complete this line only if

Form 4R, line 18 was $0 and the corporation’s capital

The purpose of Form 4CL is to allow a combined

gain and loss items that were included in the aggre-

group member to:

gate computation would have been a net capital loss

if they were netted on a separate entity basis. On

line 2, you will enter the corporation’s share of the

group’s aggregate net capital loss.

IC-544

Instructions For 2010 Form 4cl: Net Capital Loss Adjustments For Combined Group Members

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