Qualified Wisconsin Business Capital Gain Exclusion

  1. What is the qualified Wisconsin business capital gain exclusion?

  2. What is a qualified investment?

  3. What is a qualified Wisconsin business?

  4. How do I claim the long-term capital gain exclusion?


  1. What is the qualified Wisconsin business capital gain exclusion?

    An exclusion allowed for certain long-term capital gain from the sale of a qualified investment.

  2. What is a qualified investment?

    A qualified investment means an amount paid to acquire stock or other ownership interest in a partnership, corporation, tax-option corporation, or limited liability company treated as a partnership or corporation. A qualified investment is an investment in a qualified Wisconsin business where:

    1. The investment was in a business that was a qualified Wisconsin business for the year of the investment and for at least 2 of the 4 subsequent years, and

    2. The investment was made after December 31, 2010, and held for at least 5 uninterrupted years.

    Note: An investment in an entity disregarded for Wisconsin income tax purposes and reported on the owner's individual income tax return (such as on a Schedule C) is not considered a qualifying investment. Therefore, no exclusion would be allowed in the year of the sale.

  3. What is a qualified Wisconsin business?

    A qualified Wisconsin business is a business certified by the Wisconsin Economic Development Corporation (WEDC) or registered with the Department of Revenue (DOR).

    The WEDC was responsible for certifying businesses through 2013. The DOR registration program began in 2014.

    For more information on qualified Wisconsin businesses, see registration of qualified Wisconsin businesses common questions at revenue.wi.gov/Pages/FAQS/ise-qualified.aspx.

  4. How do I claim the long-term capital gain exclusion?

    Individuals, including individual partners or members of a partnership, limited liability company, or limited liability partnership, or an individual shareholder of a corporation, must file Schedule QI in order to claim the long-term capital gain exclusion.

    The amount of gain that qualifies for the exclusion, as determined on Schedule QI, is then entered as an adjustment on Schedule WD (line 15a of the 2017 Schedule WD).

FOR MORE INFORMATION PLEASE CONTACT:

MS 5-77
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2772
Fax: (608) 267-1030
Email additional questions to DORIncome@wisconsin.gov

December 13, 2017