71.05(6)(b)47.b.

b. With respect to partners and members of limited liability companies, for taxable years beginning after December 31, 2010, for 2 consecutive taxable years beginning with the taxable year in which the partnership’s or limited liability company’s business locates to this state from another state or another country and begins doing business in this state, as defined in § 71.22 (1r), and subject to the limitations provided under subd. 47. d. and e., the partner’s or member’s distributive share of taxable income as calculated under section 703 of the Internal Revenue Code; plus the items of income and gain under section 702 of the Internal Revenue Code, including taxable state and municipal bond interest and excluding nontaxable interest income or dividend income from federal government obligations; minus the items of loss and deduction under section 702 of the Internal Revenue Code, except items that are not deductible under § 71.21; plus guaranteed payments to partners under section 707 (c) of the Internal Revenue Code; plus the credits claimed under § 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), and (8r); and plus or minus, as appropriate, transitional adjustments, depreciation differences, and basis differences under § 71.05 (13), (15), (16), (17), and (19), multiplied by the apportionment fraction determined in § 71.04 (4) and subject to § 71.04 (7) or by separate accounting. No amounts subtracted under this subd. 47. b. may be included in the modification under par. (b) 9. or 9m.

71.05(10)(f)

(f) The amount necessary to reflect the inapplicability of section 66 (a) of the internal revenue code to the computation of income under this chapter.

71.05(22)(b)1.

1. A nonresident alien individual.

71.05(23)(a)

(a) For taxable years that begin after December 31, 1999, and before January 1, 2001:

71.05(24)(b)1.

1. Deposits the gain into a segregated account in a financial institution.

71.05(21)

(21) Capital gain and loss treatment for adjustments for difference in Wisconsin and federal basis of capital assets. Notwithstanding the provisions of subs. (7), (10) (b) and (e), (13), (19) and (20), the amount of any adjustment relating to the basis of a capital asset shall be combined with other long-term or short-term capital gains and losses reportable for the taxable year or carry-over year, as appropriate. The provisions of sections 1202, 1211 and 1212 of the internal revenue code, to the extent recognized or allowed by this chapter (including any addition required by s. 71.05 (1) (a) 2., 1983 stats., for the taxable year 1983), apply to the resulting net gain or loss determined. Add or subtract, as appropriate, from federal adjusted gross income of the taxable year or a carry-over year an amount to reflect the income consequences of making the amount of a basis adjustment required under this subsection subject to capital gain and loss treatment.

71.05(22)(c)

(c) Deduction limits; 1987. For taxable year 1987, the Wisconsin standard deduction is whichever of the following amounts is appropriate. For a single individual who has a Wisconsin adjusted gross income of less than $7,500, the standard deduction is $5,200. For a single individual who has a Wisconsin adjusted gross income of at least $7,500 but not more than $50,830, the standard deduction is the amount obtained by subtracting from $5,200 12% of Wisconsin adjusted gross income in excess of $7,500 but not less than $0. For a single individual who has a Wisconsin adjusted gross income of more than $50,830, the standard deduction is $0. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of less than $10,000, the standard deduction is $7,560. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of at least $10,000 but not more than $70,480, the standard deduction is the amount obtained by subtracting from $7,560 12.5% of aggregate Wisconsin adjusted gross income in excess of $10,000 but not less than $0. For a married couple filing jointly that has an aggregate Wisconsin adjusted gross income of more than $70,480, the standard deduction is $0. For a married individual filing separately who has a Wisconsin adjusted gross income of less than $4,750, the standard deduction is $3,590. For a married individual filing separately who has a Wisconsin adjusted gross income of at least $4,750 but not more than $33,470, the standard deduction is the amount obtained by subtracting from $3,590 12.5% of Wisconsin adjusted gross income in excess of $4,750 but not less than $0. For a married individual filing separately who has a Wisconsin adjusted gross income of more than $33,470, the standard deduction is $0. The secretary of revenue shall prepare a table under which deductions under this paragraph shall be determined. That table shall be published in the department’s instructional booklets.

71.05(6)(b)32.b.

b. For an individual who is a nonresident or part-year resident of this state, multiply the amount calculated under subd. 32. a. by a fraction the numerator of which is the individual’s wages, salary, tips, unearned income and net earnings from a trade or business that are taxable by this state and the denominator of which is the individual’s total wages, salary, tips, unearned income and net earnings from a trade or business. In this subd. 32. b., for married persons filing separately “wages, salary, tips, unearned income and net earnings from a trade or business” means the separate wages, salary, tips, unearned income and net earnings from a trade or business of each spouse, and for married persons filing jointly “wages, salary, tips, unearned income and net earnings from a trade or business” means the total wages, salary, tips, unearned income and net earnings from a trade or business of both spouses.

71.05(6)(b)43.f.

f. An individual who is a nonresident or part-year resident of this state and who claims the subtraction under this subdivision shall multiply the amount calculated under subd. 43. a., b., c., or d. by a fraction the numerator of which is the individual’s wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state and the denominator of which is the individual’s total wages, salary, tips, unearned income, and net earnings from a trade or business. In this subd. 43. f., for married persons filing separately “wages, salary, tips, unearned income, and net earnings from a trade or business” means the separate wages, salary, tips, unearned income, and net earnings from a trade or business of each spouse, and for married persons filing jointly “wages, salary, tips, unearned income, and net earnings from a trade or business” means the total wages, salary, tips, unearned income, and net earnings from a trade or business of both spouses.

71.05

71.05 Income computation.

71.05(1)

(1) Exempt and excludable income. There shall be exempt from taxation under this subchapter the following:

71.05(1)(ae)1.

1. The individual is at least 65 years of age before the close of the taxable year to which the exemption claim relates.

71.05(1)(c)

(c) Certain interest income. Interest received on bonds or notes issued by any of the following:

71.05(1)(a)

(a) Retirement systems. All payments received from the U.S. civil service retirement system, the U.S. military employee retirement system, the employee’s retirement system of the city of Milwaukee, Milwaukee County employees’ retirement system, sheriff’s annuity and benefit fund of Milwaukee County, police officer’s annuity and benefit fund of Milwaukee, fire fighter’s annuity and benefit fund of Milwaukee, or the public employee trust fund as successor to the Milwaukee public school teachers’ annuity and retirement fund and to the Wisconsin state teachers retirement system, which are paid on the account of any person who was a member of the paying or predecessor system or fund as of December 31, 1963, or was retired from any of the systems or funds as of December 31, 1963, but such exemption shall not exclude from gross income tax sheltered annuity benefits.

71.05(1)(ae)

(ae) Pension, individual retirement income. Except for a payment that is exempt under para. (a), (am), or (an), or that is exempt as a railroad retirement benefit, for taxable years beginning after December 31, 2008, up to $5,000 of payments or distributions received each year by an individual from a qualified retirement plan under the Internal Revenue Code or from an individual retirement account established under 26 USC 408, if all of the following conditions apply:

71.05(1)(ae)2.

2. If the individual is single or files as head of household, his or her federal adjusted gross income in the year to which the exemption claim relates is less than $15,000.

71.05(1)(ae)3.

3. If the individual is married and is a joint filer, the couple’s federal adjusted gross income in the year to which the exemption claim relates is less than $30,000.

71.05(1)(ae)4.

4. If the individual is married and files a separate return, the sum of both spouses’ federal adjusted gross income in the year to which the exemption claim relates is less than $30,000.

71.05(1)(am)

(am) Military retirement systems. All retirement payments received from the U.S. military employee retirement system, to the extent that such payments are not exempt under para. (a) or (ae).

71.05(1)(an)

(an) Uniformed services retirement benefits. All retirement payments received from the U.S. government that relate to service with the coast guard, the commissioned corps of the national oceanic and atmospheric administration, or the commissioned corps of the public health service, to the extent that such payments are not exempt under para. (a), (ae), or (am).

71.05(1)(b)

(b) State legislature allowance for expenses. All amounts received in accordance with § 13.123 (1)(a) which are spent for the purposes specified in § 13.123 (1)(a) if the person does not claim a deduction for travel expenses away from home on legislative days. In this chapter, the place of residence of a member of the state legislature within the legislative district which the member represents shall be considered the member’s home.

71.05(1)(c)1.

1. The Wisconsin Housing and Economic Development Authority under § 234.65, if the bonds are used to fund an economic development loan to finance construction, renovation, or development of property that would be exempt under § 70.11 (36).

71.05(1)(c)1m.

1m. The Wisconsin Housing and Economic Development Authority under § 234.08 or 234.61, on or after January 1, 2004, if the bonds or notes are issued to fund multifamily affordable housing projects or elderly housing projects.

71.05(1)(c)3.

3. A local exposition district created under subch. II of ch. 229.

71.05(6)(b)14.a.

a. The person is activated for Operation Desert Shield or Operation Desert Storm; and

71.05(1)(c)4.

4. A local professional baseball park district created under subch. III of ch. 229.

71.05(1)(c)5.

5. A local professional football stadium district created under subch. IV of ch. 229.

71.05(1)(c)6.

6. A local cultural arts district created under subch. V of ch. 229.

71.05(1)(c)7.

7. The Wisconsin Aerospace Authority.

71.05(1)(c)8.

8. The Wisconsin Health and Educational Facilities Authority under § 231.03 (6), on or after October 27, 2007, if the proceeds from the bonds or notes that are issued are used by a health facility, as defined in § 231.01 (5), to fund the acquisition of information technology hardware or software.

71.05(1)(c)9.

9. The southeastern regional transit authority under § 59.58 (7)(f).

71.05(1)(c)10.

10. A commission created under § 66.0304, if any of the following applies:

71.05(1)(c)10.a.

a. The bonds or notes are used to fund multifamily affordable housing projects or elderly housing projects in this state, and the Wisconsin Housing and Economic Development Authority has the authority to issue its bonds or notes for the project being funded.

71.05(1)(c)10.b.

b. The bonds or notes are used by a health facility, as defined in § 231.01 (5), to fund the acquisition of information technology hardware or software, in this state, and the Wisconsin Health and Educational Facilities Authority has the authority to issue its bonds or notes for the project being funded.

71.05(1)(c)10.c.

c. The bonds or notes are issued to fund a redevelopment project in this state or a housing project in this state, and the authority exists for bonds or notes to be issued by an entity described under § 66.1201, 66.1333, or 66.1335.

71.05(6)(a)

(a) Additions. To federal adjusted gross income add:

71.05(1)(c)12.

12. The Wisconsin Housing and Economic Development Authority, if the bonds or notes are issued to provide loans to a public affairs network under § 234.75 (4).

71.05(1)(f)

(f) Income from the sales of certain insurance policies. Income received by the original policyholder or original certificate holder who has a catastrophic or life-threatening illness or condition from the sale of a life insurance policy or certificate, or the sale of the death benefit under a life insurance policy or certificate, under a life settlement contract, as defined in § 632.69 (1)(k). In this paragraph, “catastrophic or life-threatening illness or condition” includes AIDS, as defined in § 49.686 (1)(a), and HIV infection, as defined in § 49.686 (1)(d).

71.05(2)

(2) Nonresident reciprocity. All payments received by natural persons domiciled outside Wisconsin who derive income from the performance of personal services in Wisconsin shall be excluded from Wisconsin gross income to the extent that it is subjected to an income tax imposed by the state of domicile; provided that the law of the state of domicile allows a similar exclusion of income from personal services earned in such state by natural persons domiciled in Wisconsin, or a credit against the tax imposed by such state on such income equal to the Wisconsin tax on such income.

71.05(3)

(3) Menominee Indian tribe; distribution of assets. No distribution of assets from the United States to the members of the Menominee Indian tribe as defined in § 49.385 or their lawful distributees, or to any corporation, or organization, created by the tribe or at its direction pursuant to section 8, P.L. 83-399, as amended, and no issuance of stocks, bonds, certificates of indebtedness, voting trust certificates or other securities by any such corporation or organization, or voting trust, to such members of the tribe or their lawful distributees shall be subject to income taxes under this chapter; provided, that so much of any cash distribution made under said P.L. 83-399 as consists of a share of any interest earned on funds deposited in the treasury of the United States pursuant to the supplemental appropriation act, 1952, (65 Stat. 736, 754) shall not by virtue of this subsection be exempt from the individual income tax of this state in the hands of the recipients for the year in which paid. For the purpose of ascertaining the gain or loss resulting from the sale or other disposition of such assets and stocks, bonds, certificates of indebtedness and other securities under this chapter, the fair market value of such property, on termination date as defined in s. 70.057 (1), 1967 stats., shall be the basis for determining the amount of such gain or loss.

71.05(5)

(5) Fractional year. When an income tax return is required to be filed for a fractional part of a year under § 71.03 (3), the Wisconsin taxable income shall be placed on an annual basis using the method applicable for federal income taxes under section 443 (b) (1) of the internal revenue code.

71.05(6)

(6) Modifications and transitional adjustments. Some of the modifications referred to in § 71.01 (13) and (14) are:

71.05(6)(a)1.

1. The amount of any interest, except interest under par. (b) 1., less related expenses, which is not included in federal adjusted gross income, and except the amount of any interest or original issue discount derived from bonds issued under subch. IV of ch. 18.

71.05(6)(a)2.

2. Losses not allocable or apportionable to this state under § 71.04.

71.05(6)(a)3.

3. Any amount deducted as a capital loss carry-over from any taxable year prior to the 1965 taxable year.

71.05(6)(a)4.

4. The amount of any lump sum distribution taxable under section 402 (d) (1) of the internal revenue code (relating to distributions from employee benefit plans).

71.05(6)(a)5.

5. Any amount deducted as a capital loss carry-over from any taxable year prior to the 1975 taxable year if the capital asset which generated the loss had a situs outside of Wisconsin.

71.05(6)(a)6.

6. Any amount received in taxable year 1979 or thereafter by a Wisconsin resident shareholder as a proportionate share of the earnings and profits of a tax-option corporation which was accumulated prior to the beginning of its 1979 taxable year and not considered a dividend when received under section 1375 (d) (1) of the internal revenue code as amended to December 31, 1978.

71.05(6)(a)7.

7. Any amount deducted under section 170 (i) of the internal revenue code (relating to the deduction of charitable contributions by individuals who do not itemize deductions).

71.05(6)(a)8.

8. Wages paid to an entertainer or entertainment corporation unless the taxpayer complies with ss. 71.63 (3) (b), 71.64 (4) and (5) and 71.80 (15) (b).

71.05(6)(a)9.

9. Any amount excluded from adjusted gross income under section 641 (c) (1) of the internal revenue code (relating to gain on the sale of any property by a trust within 2 years of acquisition).

71.05(6)(a)13.

13. The amount claimed by a fiduciary as an itemized deduction under section 164 or 216 (a) (1) of the internal revenue code on the federal fiduciary return.

71.05(6)(a)15.

15. The amount of the credits computed under § 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k), (5n), (5r), (5rm), and (8r) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership’s, company’s, or tax-option corporation’s income under § 71.21 (4) or 71.34 (1k) (g).

71.05(6)(b)5.

5. Any amounts that are recoveries of federal itemized deductions for which no tax benefit was received for Wisconsin purposes.

71.05(6)(b)13.a.

a. The person is activated for Operation Desert Shield or Operation Desert Storm; and

71.05(6)(a)10.

10. For the taxable year, for a person who is not “actively engaged in farming,” as that term is used in 7 CFR 1400.201, combined net losses, exclusive of net gains from the sale or exchange of capital or business assets and exclusive of net profits, from businesses, from rents, from partnerships, from limited liability companies, from S corporations, from estates, or from trusts, under section 165 of the Internal Revenue Code, except losses allowable under sections 1211 and 1231 of the Internal Revenue Code, otherwise includable in calculating Wisconsin income if those losses are incurred in the operation of a farming business, as defined in section 464 (e) 1. of the Internal Revenue Code to the extent that those combined net losses exceed $20,000 if nonfarm Wisconsin adjusted gross income exceeds $55,000 but does not exceed $75,000, exceed $17,500 if nonfarm Wisconsin adjusted gross income exceeds $75,000 but does not exceed $100,000, exceed $15,000 if nonfarm Wisconsin adjusted gross income exceeds $100,000 but does not exceed $150,000, exceed $12,500 if nonfarm Wisconsin adjusted gross income exceeds $150,000 but does not exceed $200,000, exceed $10,000 if nonfarm Wisconsin adjusted gross income exceeds $200,000 but does not exceed $250,000, exceed $7,500 if nonfarm Wisconsin adjusted gross income exceeds $250,000 but does not exceed $300,000, exceed $5,000 if nonfarm Wisconsin adjusted gross income exceeds $300,000 but does not exceed $600,000, and exceed $0 if nonfarm adjusted gross income exceeds $600,000, except that the amounts applicable to married persons filing separately are 50% of the amounts specified in this subdivision.

71.05(6)(a)12.

12. All penalties for early withdrawals from time savings accounts and deposits deducted for federal income tax purposes and paid while the individual charged with the penalty was a nonresident of this state; all reforestation expenses related to property not in this state, deducted for federal income tax purposes and paid while the individual paying the expense was not a resident of this state; all contributions to individual retirement accounts, simplified employee pension plans and self-employment retirement plans and all deductible employee contributions, deducted for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s wages and net earnings from a trade or business taxable by this state and the denominator of which is the individual’s total wages and net earnings from a trade or business; the contributions to a Keogh plan deducted for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s net earnings from a trade or business, taxable by this state, and the denominator of which is the individual’s total net earnings from a trade or business; the amount of health insurance costs of self-employed individuals deducted under section 162 (L) of the internal revenue code for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s net earnings from a trade or business, taxable by this state, and the denominator of which is the individual’s total net earnings from a trade or business; and the amount of self-employment taxes deducted under section 164 (f) of the internal revenue code for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s net earnings from a trade or business, taxable by this state, and the denominator of which is the individual’s total net earnings from a trade or a business.

71.05(6)(a)14.

14. Any amount received as a proportionate share of the earnings and profits of a corporation that is an S corporation for federal income tax purposes if those earnings and profits accumulated during a year for which the shareholders have elected under § 71.365 (4) not to be a tax-option corporation, to the extent not included in federal adjusted gross income for the current year.

71.05(6)(a)16.

16. Any amount recognized as a loss under section 1001 (c) of the Internal Revenue Code if a surviving spouse and a distributee exchange their interests in marital property under § 766.31 (3)(b).

71.05(6)(a)17.

17. The amount received under § 71.07 (3m)(c) or 71.60, or both, that is not included in federal adjusted gross income.

71.05(6)(a)18.

18. Any amount deducted as moving expenses under section 217 of the internal revenue code if the expense relates to a move made by an individual who changes his or her domicile from this state as a result of the move or if the expense relates to a move made by an individual who is not domiciled in this state as a result of the move.

71.05(6)(a)20.

20. The amount of any excess distribution, as that term is used in section 1291 (b) of the Internal Revenue Code, from a passive foreign investment company.

71.05(6)(a)21.

21. For taxable years beginning after December 31, 2007, and before January 1, 2009, any amount deducted as income attributable to domestic production activities under section 199 of the Internal Revenue Code if the individual claiming the deduction is a nonresident or part-year resident of this state and if the domestic production activities income is not attributable to a trade or business that is taxable by this state.

71.05(6)(a)22.

22. For taxable years beginning after December 31, 2007, and before January 1, 2009, if an individual is a nonresident or part-year resident of this state and a portion of the amount the individual deducted as income attributable to domestic production activities under section 199 of the Internal Revenue Code is attributable to a trade or business that is taxable by this state, the amount deducted under section 199 for federal income tax purposes and in excess of that amount, multiplied by a fraction, the numerator of which is the individual’s net earnings from the trade or business that is taxable by this state and the denominator of which is the individual’s total net earnings from the trade or business to which the deduction under section 199 of the Internal Revenue Code applies.

71.05(6)(a)23.

23. Any amount deducted by an individual under section 62 (a) (20) of the Internal Revenue Code related to attorney fees or court costs, involving an unlawful discrimination claim, if the individual is a nonresident or part-year resident of this state and if the judgment or settlement resulting from the claim is not taxable by this state.

71.05(6)(a)24.

24. The amount deducted or excluded under the Internal Revenue Code for interest expenses, rental expenses, intangible expenses, and management fees that are directly or indirectly paid, accrued, or incurred to, or in connection directly or indirectly with one or more direct or indirect transactions with, one or more related entities.

71.05(6)(b)

(b) Subtractions. From federal adjusted gross income subtract to the extent included in federal taxable or adjusted gross income unless the modification is an item, other than a capital gain deduction under § 71.36 or interest on U.S. obligations, that is passed through to an individual from a tax-option corporation and would be included in that corporation’s income if it were not a tax-option corporation:

71.05(6)(b)1.

1. The amount of any interest or dividend income which is by federal law exempt from taxation by this state less the related expense in regard to both the distributable and nondistributable interest and dividend income on a fiduciary return.

71.05(6)(b)2.

2. Net income not allocated or apportioned to this state under § 71.04.

71.05(6)(b)3.

3. Any other amount not subject to taxation under this chapter, less any amount allocable thereto which has been deducted in the computation of federal taxable or adjusted gross income except amounts used to calculate the credit under § 71.07 (5).

71.05(6)(b)3m.

3m. As provided under s. 71.07 (3s) (c) 7., the amount of the credit under § 71.07 (3s) that the taxpayer added back to income under § 71.05 (6)(a) at the time that the taxpayer first claimed the credit.

71.05(6)(b)4.

4. Disability payments other than disability payments that are paid from a retirement plan, the payments from which are exempt under sub. (ae), (am), and (an), if the individual either is single or is married and files a joint return, to the extent those payments are excludable under section 105 (d) of the Internal Revenue Code as it existed immediatel