Below are solutions to frequently asked questions about entering additions and subtractions on a Wisconsin return in the Individual module of Lacerte.
How do I input K-1 losses that only impact Form 1NPR, line 11?
- Go to Screen 18, Rental & Royalty Inc. (Sch. E).
- Scroll down to the Income section.
- Hold down Ctrl+E in the Rents or royalties received field.
- Enter the net federal amount on the first line.
- Enter the net Wisconsin amount on the second line.
- Choose WI in the State dropdown menu.
- Click OK.
- The amounts should now flow to WI Form 1NPR, line 11.
Where do I enter IRA distributions transferred to a qualified charity?
The Pension Protection Act of 2006 provides that an individual who has attained the age of 70 & 1/2 can instruct an IRA plan trustee to make a transfer of IRA distributions to a Code Section 170(b )(1)(A) charitable organization, and exclude up to $100,000 of such distributions from income, instead of claiming the contributions as an itemized deduction subject to AGI limitations.
Enter the amount of IRA distributions that were transferred from the plan trustee to a Code Section 170(b )(1)(A) charitable organization in the IRA Distributions Transferred to Qualified Charity field on Screen 13.1, Pensions, IRAs (1099-R). Don't reduce the entry in (2a) Taxable amount on Screen 13.1, Pensions, IRAs (1099-R) by the charitable distribution. The program subtracts the charitable distribution from the entry in (2a) Taxable amount.
Schedule A effects
In addition to reducing IRA income by the amounts that were transferred to qualified charities, in some cases a residual amount may automatically carry to the Schedule A as an itemized deduction.
For example, if the taxpayer has $20,000 in basis in traditional IRAs, and an IRA worth $30,000 in which the taxpayer had the entire amount transferred to a qualified charity, the program will reduce income by $10,000 (the otherwise taxable amount), and deduct the residual $20,000 amount on Schedule A.
If you would like to suppress the program's automatic deduction of the residual amount on Schedule A, select the box or enter a 1 in the 1 If Suppress Itemized Deduction of Amounts That Do Not Reduce AGI field on Screen 13.1.
Indiana, Hawaii, Kentucky, New Jersey, and Wisconsin don't conform to the provision that allows a reduction of AGI by the amount of a charitable distribution. Therefore, addition adjustments are made automatically for these state returns. Additionally, amounts that are added back to state income, are included as a state only itemized deduction for these states.
Why is the WI adjusted basis the same as federal?
Wisconsin instituted a one-time adjustment for the different entities. Per the Form 1, 2, 4, 5S, and 3 booklets:
"To adjust for the difference in basis of depreciated or amortized assets owned on December 31, 2013 (or the last day of a taxable year beginning in 2013 for fiscal filers), see the line 4 or line 11 instructions for Difference in Federal and Wisconsin Basis of Depreciated or Amortized Assets. A subtraction is allowed over 5 years to adjust for any difference in basis. In some cases, an addition to income may be required over 5 years. As a result of these additions or subtractions, the Wisconsin adjusted basis of all depreciated or amortized assets on January 1, 2014 (or the first day of the taxable year beginning in 2014 for fiscal filers), is the same as the federal adjusted basis."
Lacerte will generate a worksheet that shows the calculation of this adjustment in each module.
Since federal and Wisconsin adjusted basis is considered the same for depreciation taken in prior years, Wisconsin depreciation schedules will not print if there aren't any current year depreciation differences.