SECTION 29. Tax 2.935 (1) (a) is amended to read:
(a) Requests the reduction in writing, addressed to the Wisconsin Department of Revenue, Delinquent Tax Collection System Compliance Bureau, P.O. Box 8901, Madison, WI 53708.
SECTION 30. Tax 2.95 (5) (Example) and 2.955 (2) (a) and (b) are amended to read:
2.95 (5) Example: In 1990 2016 an Illinois resident sells Wisconsin real estate for $140,000. The adjusted basis of the property is $70,000 which results in a gross profit percentage of 50%. The seller receives a down payment of $40,000 and an installment note of $100,000 for the balance. In 19912017, after receiving a $60,000 payment on the principal plus interest of $4,000, the installment obligation is sold for $45,000. The seller's Wisconsin taxable income from these transactions is as follows:
19902016− | Selling price | $140,000 | |
| Wisconsin adjusted basis | 70,000 | |
| Down payment received | $40,000 | |
| Profit reportable (50% x $40,000) | 20,000 | $20,000 |
| Total Wisconsin Income | | $20,000 |
19912017− | Payment on principal received | $60,000 | |
| Profit reportable (50% x $60,000) | 30,000 | $30,000 |
| Interest received | 4,000 | −0− |
| Sale of installment obligation: | | |
| Less basis − unpaid balance of | | |
| $40,000 less unpaid profit due | | |
| of $20,000 ($40,000 x 50%) | 20,000 | |
| Gain on sale of installment | | |
| obligation ($45,000 − $20,000) | 25,000 | 25,000 |
| Total Wisconsin Income | | $55,000 |
2.955 (2) (a) Except as provided in sub. subs. (2m) and (3), an income tax credit may be claimed by a Wisconsin resident individual, estate, or trust for any net minimum tax or income tax paid to another state by the resident upon income of the individual, estate or trust taxable by that state.
(b) Except as provided in sub. subs. (2m) and (3), an income tax credit may be claimed by a Wisconsin resident shareholder in a tax-option (S) corporation for any net minimum tax, income tax, or franchise tax paid by that shareholder to another state on or measured by income of the tax-option (S) corporation.
SECTION 31. Tax 2.955 (2m) is created to read:
(2m) Limitation. (a) The credit may only be allowed if the income taxed by the other state is also considered income for Wisconsin tax purposes.
(b) The credit may not exceed the net tax paid to Wisconsin on income that is taxable to both Wisconsin and the other state.
(c) The limitation in par. (b) does not apply to income that is taxable to both Wisconsin and to Minnesota, Iowa, Illinois, or Michigan.
SECTION 32. Tax 2.955 (4) (intro), (b) 2. and 3., (c), and (d) and (5) (Example) are amended to read:
(4) How to claim a credit. The amount of income tax credit claimed shall be entered on the line provided for net income tax paid to other states on Wisconsin income tax return form Form 1 or form Form 1NPR. The credit may not exceed the Wisconsin net tax. To support the credit claimed, the following information shall be attached to form Form 1 or form Form 1NPR:
2. If the corporation files a combined or composite return with that state on behalf of its shareholders who are nonresidents of that state and pays the tax on their proportionate share of the income earned there, attach to the Wisconsin income tax return either a copy of the Wisconsin schedule Schedule 5K-1 on which is shown the shareholder's share of tax paid to that state, or a letter as provided in par. (d).
3. If the corporation files a corporate income or franchise tax return with that state and pays tax on or measured by income earned there that is attributable to its shareholders who are nonresidents of that state, attach to the Wisconsin income tax return either a copy of the Wisconsin schedule Schedule 5K-1 on which is shown the shareholder's share of tax paid to that state, or a letter as provided in par. (d).
(c) For a Wisconsin resident shareholder in a tax-option (S) corporation, the federal subchapter S status of which is not recognized by the other state, if the corporation pays an income or franchise tax on or measured by the income earned there, attach to the Wisconsin income tax return either a copy of the Wisconsin schedule Schedule 5K-1 on which is shown the shareholder's share of tax paid to that state, or a letter as provided in par. (d).
(d) If the tax-option (S) corporation is not subject to Wisconsin's income or franchise tax, a Wisconsin resident shareholder shall attach to the Wisconsin income tax return a letter provided by the corporation in lieu of Wisconsin schedule Schedule 5K-1 as required in pars. (b) 2. and 3. and (c). The letter shall include a schedule showing the shareholder's proportionate share of the items of income taxable by that state, the adjusted gross income, and the net tax paid.
Example: A Wisconsin resident receives income of $4,000 in 1992 2016 from rental property located in Iowa. The person files a 1992 2016 declaration of estimated tax of $200 with Iowa, with $150 of estimated tax payments being made in 1992 2016 and the fourth quarter payment of $50 being made in January 1993 2017. The Iowa income of $4,000 is reported as income on the 1992 2016 Iowa and Wisconsin returns. The 1992 2016 Iowa income tax return shows the following:
1992 2016 Iowa Return
Iowa Rental Income $4,000
Iowa Net Tax $ 185
Estimated Tax Payments 200
Refund $ 15
The taxpayer may claim a credit for net income tax paid to other states of $185 on the 1992 2016 Wisconsin return, even though a part of the tax was paid in 1993 2017.
SECTION 33. Tax 2.96 (1) (a) is amended to read:
(a) General. Except as provided in pars. (am) and (b), corporation franchise or income tax returns are due on or before the 15th day of the 3rd 4th month following the close of a corporation's taxable year unless an extension of time for filing has been granted.
SECTION 34. Tax 2.98 (2) (b) (Note 1), (Note 2), and (Note 3) are repealed.
SECTION 35. Tax 14.01 (2) (am) is created to read:
(am) "Disqualified loss" has the meaning given in s. 71.52 (1e), Stats. SECTION 36. Tax 14.03 (4) (b) 23. is repealed.
SECTION 37. Tax 14.03 (4) (c) 10. is created to read:
10. Disqualified losses.
SECTION 38. Effective date; general. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s. 227.22 (2) (intro.), Stats.
