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Category: Wisconsin

Wisconsin Additions to Income

State and Municipal Interest

Enter the amount of interest you received from state and municipal bonds. This will generally be the amount shown as tax-exempt interest on your Federal Form 1040, 1040A, or 1040EZ. (If you were required for federal purposes to allocate expenses to this income, reduce the amount to be filled in by such expenses. If you received interest income which is exempt for state and federal tax purposes, do not include this interest income.) For examples of exempt interest, please click here.

Other Additions to Income - When you enter this information on the Additions to Income screen in our program you will see each item broken out. The total of this information is added together and will appear on line 4 of your state Form 1. The item's code number will be listed, along with the amount you enter.

Farm Losses- Code 01

An addition may be required if farm losses were deducted on your federal tax return and you were not actively engaged in the farming operations that produced those losses. To be “actively engaged in farming” with respect to a farming operation, you must make a significant contribution of (1) capital, equipment, or land, or a combination of capital, equipment, or land; and (2) active personal labor or active personal management, or a combination of both.

Factors you must take into consideration in determining if you contribute a significant amount of active personal labor or active personal management include:

  • The type of crops and livestock produced;
  • The normal and customary farming practices of the area; and
  • The total amount of labor and management which is necessary for such a farming operation in the area.

In order to be considered to be actively engaged in a farming operation, you must have (1) a share of the profits or losses from the farming operation which is commensurate with your contributions to the operation, and (2) contributions to the farming operation which are at risk.

Your combined net losses from farming operations in which you are not actively engaged in farming are limited if your nonfarm Wisconsin adjusted gross income is more than $55,000 ($27,500 if married filing separately). To figure your combined net losses from farming operations, add together any losses you have from farming operations in which you were not actively engaged (for example, these could be losses from a farm partnership or tax-option (S) corporation). Do not reduce these losses by any net farm gains. If the total of these losses is more than the maximum allowable loss shown in the tables below, include the excess.

Federal Net Operating Loss Carryover- Code 02

Fill in any amount deducted as a federal net operating loss carryover.

Income (Lump-Sum Distributions) Reported on Federal Form 4972- Code 03

Income from a lump-sum distribution is taxable to Wisconsin. If you reported a lump-sum distribution on federal Form 4972, you must also include the distribution in Wisconsin income. Fill in the total of:

  1. the capital gain part of the lump-sum distribution from line 6 of Form 4972 and
  2. the taxable amount from line 10 of Form 4972.

You may reduce this amount by any federal estate tax on line 18 of Form 4972. Caution: If the amount on line 10 of Form 4972 was computed using the rules for multiple recipients of a lump sum distribution, include only your share of the taxable amount on line 10 less your share of any federal estate tax attributable to the lump-sum distribution on line 18. Note: No portion of a lump-sum distribution may be reported as a capital gain on Wisconsin Schedule WD.

Farmland Preservation Credit and Farmland Tax Relief Credit-Code 04

The total amount of farmland preservation credit and farmland tax relief credit you received during 2014 must be reported as income. Fill in as an addition any portion of your farmland preservation credit and farmland tax relief credit which was not included as income on your federal tax return.

Excess Distribution From a Passive Foreign Investment Company - Code 5

Fill in the excess distribution from a passive foreign investment company that was not included in federal adjusted gross income (see federal Form 8621 or 8621-A).

Your Share of Partnership, Limited Liability Company, or Trust or Estate Adjustments (either addition or subtraction) - Code 52

If you were a member of a partnership or limited liability company (LLC) treated as a partnership, or you received income from an estate or trust, you will receive a statement from the partnership, LLC, trust, or estate notifying you of any additions or subtractions which you should make on your return. Fill in the amount of any such additions on line 4 and any subtractions on line 11.

Tax-Option (S) Corporation Adjustments (either addition or subtraction) - Code 51

Fill in any of the following adjustments that apply to you:

  1. If you were a shareholder of a tax-option (S) corporation which is required to file a Wisconsin franchise or income tax return, you will receive a Wisconsin Schedule 5K-1 from the S Corporation informing you of any adjustments to be made for Wisconsin tax purposes
  2. If you are a shareholder of a federal S corporation that elects not to be treated as a Wisconsin tax-option (S) corporation, you must reverse all items of S Corporation income, loss, or deduction included in your federal return and then add your pro rata share of any distributions made by the corporation of earnings and profits.
  3. Instead of using tax-option (S) corporation items deductible on federal Schedule A to compute the Wisconsin itemized deduction credit, you may elect to treat these items as subtraction modifications. Your subtraction is limited to the amount actually deductible for federal purposes.

Differences in Federal & WI Basis of Assets (either addition or subtraction) - Code 53

Additions or subtractions may be necessary if there is a difference between the federal basis and the Wisconsin basis of your property. Additions or subtractions are necessary if:

  1. You acquired property after December 31, 1964, which may be depreciated or amortized (such as buildings and leaseholds), and the federal basis is greater or less than the Wisconsin basis.
  2. You sold (or otherwise disposed of) property which may not be depreciated or amortized (such as land, stocks, and bonds) in a taxable transaction, and your basis in the assets was greater or less for federal purposes than for Wisconsin.
  3. You sold (or otherwise disposed of) property where the federal basis is greater than the Wisconsin basis due to a previous gain on the sale of an asset being deferred because gain was invested in a "qualified new business venture" or a "qualified Wisconsin business."

Differences in Federal & WI Basis of Partnership Interest (either addition or subtraction) - Code 54

An addition or subtraction may be necessary if you sold your interest in a partnership and any increases or decreases were made to the federal basis of your partnership interest in taxable years prior to 1975, which resulted from partnership business or property located outside Wisconsin. (Prior to 1975, Wisconsin did not tax income from business or property located outside Wisconsin.) Compute any addition or subtraction due to a difference in basis on Wisconsin Schedule T.

Differences in Federal & WI Reporting of Marital Property (either addition or subtraction) - Code 55

If you are married filing a separate return or married filing as head of household or if you obtained a decree of divorce or separate maintenance during 2014, you may have to report a different amount of income on your Wisconsin Form 1 than on your federal Form 1040. Fill in on line 4 any additional amount which is taxable to you rather than your spouse because of any difference in federal and state reporting of marital property (community) income. Fill in on line 11 any amount which is taxable to your spouse rather than to you because of any difference in federal and state reporting of marital property (community) income.