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What Wisconsin tax returns are required for a deceased taxpayer?
More than one type of tax return may be required for deceased taxpayers, such as:
Wisconsin Individual Income Tax Return
A personal representative or petitioner must file an individual income tax return,
Form 1,
Income Tax Return, or
Form 1NPR,
Nonresident and Part-Year Resident Income Tax Return, for a decedent from the beginning of the year to the date of death if the decedent had a filing requirement. The due date of the individual return is April 15, 2024, for a 2023 income tax return. The personal representative is also responsible for filing returns for any prior years for which the decedent had a filing requirement and did not file a return.
The filing requirements for tax years beginning in 2023 are as follows:
- Single person
- Under age 65 - gross income of $13,460 or more
- Age 65 or older - gross income of $13,710 or more
- Married persons filing jointly
- Both spouses under 65 - $25,020 or more
- One spouse 65 or older - $25,270 or more
- Both spouses 65 or older - $25,520 or more
- Married person filing separately
- Under age 65 - gross income of $11,920 or more (each spouse)
- Age 65 or older - $12,170 or more (each spouse)
- Head of household
- Under age 65 - gross income of $17,180 or more
- Age 65 or older - gross income of $17,430 or more
- Part-year resident or nonresident - gross Wisconsin income of $2,000 or more
The person who files the return should enter the appropriate code in the Special Conditions box. See the instructions for Form 1 or 1NPR. If the taxpayer did not have to file a return but paid estimated tax or had tax withheld, a return must be filed to get a refund.
If your spouse died during 2023 and you did not remarry in 2023, you can file a joint return. You can also file a joint return for 2023 if your spouse died in 2024 before filing a 2023 return. A joint return should show your spouse's 2023 income before death and your income for all of 2023. Write "Filing as surviving spouse" in the area where you sign the return. If someone else is the personal representative, they must also sign.
Wisconsin Fiduciary Income Tax Return(s)
The estate of a decedent is considered resident of Wisconsin if the decedent was domiciled in Wisconsin at the time of death.
RESIDENT ESTATES: Every personal representative or special administrator of the estate of a Wisconsin decedent must file a Wisconsin fiduciary income tax return if the gross income of the estate is $600 or more.
Gross income means all income (before deducting expenses) reportable to Wisconsin which is received in the form of money, property, or services. It does not include items that are exempt from Wisconsin tax.
Note: If an estate sells the decedent's residence and the gross proceeds from the sale are greater than $600, the personal representative is required to file a tax return even if the residence is sold at a loss.
Example: The decedent was a Wisconsin resident. The decedent's personal residence is the only asset of the estate. The residence's value is $100,000 at date of death. The estate sells the residence for a sale price of $90,000. The net loss is ($10,000). Although the sale resulted in a loss, the personal representative is required to file a
Form 2,
Wisconsin Fiduciary Income Tax for Estates or Trusts, because gross income from the sale of the residence is $90,000 and that is greater than the $600 filing requirement.
NONRESIDENT ESTATES: A nonresident estate must file a Wisconsin fiduciary return if it has gross income (see definition under "RESIDENT ESTATES") of $600 or more from Wisconsin sources.
Income from Wisconsin sources includes income or gain from:
- Real or tangible personal property located within the state.
- A business, trade, profession, or occupation carried on within the state, including a corporation taxed under Subchapter S of the Internal Revenue Code.
- Personal or professional services performed within the state either as an individual or a member of a partnership.
- Income received from the Wisconsin state lottery or a multijurisdictional lottery if the winning lottery ticket or lottery share was purchased from a Wisconsin retailer.
The first fiduciary income tax return filed by a personal representative or petitioner of an estate covers the period from the date of death of the decedent to the end of the first year selected by the fiduciary. The taxable year cannot be longer than 12 months, must end on the last day of the month, and must coincide with the year selected for filing the federal return. The return is due on the 15th day of the 4th month after the close of the taxable year of the estate.
Wisconsin Estate Tax Return
There is no estate tax for decedents dying after December 31, 2007. If the decedent died prior to 2008, see the Form W706 instructions (Estate Tax Forms) for the filing requirement for a Wisconsin estate tax return or contact the department at (608) 264-4217 for additional information.
Wisconsin Inheritance Tax Return
There is no Wisconsin inheritance tax for decedents dying on or after January 1, 1992. If death occurred prior to January 1, 1992, contact the department at (608) 266-2772 to obtain the appropriate forms.
Wisconsin Gift Tax Return
There is no Wisconsin gift tax for gifts made on or after January 1, 1992. If a gift was made prior to January 1, 1992, contact the department at (608) 266-2772 to obtain the appropriate forms.
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How do I electronically file Form 2,
Wisconsin Fiduciary Income Tax for Estates and Trusts, or Schedule CC,
Request for a Closing Certificate for Fiduciaries?
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Must an estate have a federal employer identification number (FEIN) in order to file a Form 2 and/or Schedule CC?
The Wisconsin Department of Revenue does not administer FEINs; the federal Internal Revenue Service (IRS) determines whether an estate is required to have a FEIN. See common question number 4 below for how to apply for a FEIN.
- If the estate is not required to obtain a FEIN, file the estate's Form 2 and/or Schedule CC using the decedent's social security number.
- If the estate is required to obtain a FEIN number, file the estate's Form 2 and/or Schedule CC and include both the decedent's social security number and the FEIN.
- If the estate has applied for a FEIN number and hasn't received the FEIN number at the time of filing, file the estate's Form 2 and/or Schedule CC using the decedent's social security number. Any subsequent tax returns should be filed using both the decedent's social security number and the FEIN.
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How do I apply for a FEIN for an estate or trust?
You may apply for a FEIN directly from the IRS. Visit the
IRS website to learn about how to apply for a FEIN.
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Does the department accept an e-filed Form 2 for a grantor trust using a FEIN?
Yes. Wisconsin does accept the Form 2 for a Grantor Trust using an FEIN.
For software providers: Using the following XML schema, complete the TrustLegalName and TrustEIN.
ReturnState/ReturnDataState/Form2/Header/TrustOrEstate/Trusts/LegalName ReturnState/ReturnDataState/Form2/Header/TrustOrEstate/Trusts/TrustEIN
AND the following section.
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Where do I file the estate's Wisconsin returns?
Send the final individual income tax return to:
If tax is due:
PO Box 268
Madison, WI 53790-0001
If a refund or no tax is due:
PO Box 59
Madison, WI 53785-0001
Send your Form 2 to:
If tax is due:
Wisconsin Department of Revenue
PO Box 8918
Madison, WI 53708-8918
If a refund or no tax is due:
Wisconsin Department of Revenue
PO Box 8965
Madison, WI 53708-8965
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What are the deadlines for filing the estate's Wisconsin returns?
A final individual income tax return, Form 1 or 1NPR, for calendar year 2023 is due April 15, 2024.
A Wisconsin fiduciary income tax return, Form 2, for an estate for 2023 is due on or before April 15, 2024, for a calendar year filer or the 15th day of the 4th month after the close of the taxable year for a fiscal year filer.
Returns for short taxable years (periods of less than 12 months) are due on or before the federal due date. Be sure to use the correct year's tax return when filing for a short period. If the tax returns are not yet available, wait until the returns become available and file under extension. For example, if a taxpayer has a short period from January 1, 2024 through March 31, 2024, the 2024 Form 2 will not be ready by July 15, 2024 (unextended due date for a March 31 year-end). Wisconsin law provides for the same extension period (typically 5½ months) as the Internal Revenue Service to file the estate or trust return (see question 8 below). Filing under extension will allow the correct years return to be filed when the 2024 Form 2 is available (typically November 1).
Exception: If an estate is submitting a final return (Form 2) that begins and ends in the current tax year and the period ends before October 31, the estate may submit a short-period return on the most current Form 2 available.
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What extensions are available if I can't file the estate's Wisconsin returns by the due date?
The following extension of time to file options are available for tax returns:
Individual
If you have an extension for filing your federal income tax return, this automatically gives you a Wisconsin extension provided you:
- Estimate your 2023 tax and pay this amount by the due date using 2023 Wisconsin
Form 1-ES,
Estimated Income Tax Voucher, and include a copy of your federal extension application to your Form 1 or 1NPR.
Extensions available under federal law may be used for Wisconsin purposes, even if you do not need a federal extension because you filed your 2023 federal return by April 15, 2024. To obtain an extension only for Wisconsin, you must include a statement to your Wisconsin income tax return indicating you wish to take the federal Form 4868,
Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, extension provision or include a copy of the federal Form 4868 with only the name, address, and signature areas completed.
Fiduciary
Extensions available under federal law may be used for Wisconsin fiduciary income tax extensions, even if you do not need a federal extension because you file your federal return by the due date. To obtain an extension only for Wisconsin, you must:
- Estimate your 2023 Wisconsin income tax and pay this amount by the due date using 2023 Wisconsin Form 1-ES, and
- Include a statement with your Form 2 indicating which federal extension provision you are using (for example, automatic 5 1/2-month extension) or include a copy of the appropriate federal extension application form with only the name, address, and signature areas completed.
No extension is allowed if your estimate of tax is not reasonable.
Note: Even though you may have an extension of time to file your return, you will owe interest on any tax not paid by the unextended due date of the return. Returns not filed by the original due date, or during an extension period, are subject to additional interest and penalties.
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How do I submit an estimated or return payment for an estate's or trust's Form 2,
Fiduciary Income Tax Return?
For information on submitting a payment, visit the department's
Make a Payment web page under "Make a Payment – Individuals and Fiduciaries."
Note: If making a return payment at the time of filing, submit your payment using one of the online options provided on our
Make a Payment web page or submit your payment with your mailed return.
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How do I submit an estimated or return payment for an estate's or trust's Form PW-1,
Wisconsin Nonresident Income or Franchise Tax Withholding on Pass-Through Entity Income?
You are required to make your pass-through withholding estimated payments electronically unless the department has granted a
waiver from electronic payment.
For information on submitting a payment, visit the department's
Make a Payment web page under "Make a Payment – Corporations, Partnerships, & Pass-Through Withholding."
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How do I get a Closing Certificate for Fiduciaries?
The department will issue a Closing Certificate for Fiduciaries only in cases where the court has required it to close a proceeding. Section
71.13(2), Wis. Stats., provides that the department may issue a Closing Certificate for Fiduciaries to a personal representative or trustee in order to obtain the court's approval for final distribution and discharge of the fiduciary.
Note: A Closing Certificate may be requested from the department at or after the time that the Form 2 is filed for the year prior to the final year. However, do NOT file Schedule CC as an attachment to Wisconsin Form W-RA,
Required Attachments for Electronic Filing, or Form 2,
Wisconsin Fiduciary Income Tax for Estates and Trusts, as a request for a closing certificate. Schedule CC must be filed separately.
Estates
Caution: Be sure to include both the decedent's social security number and the estate's federal employer identification number (FEIN), if the estate is required to have a FEIN. The federal Internal Revenue Service determines whether an estate must have a FEIN. See common question numbers 3 and 4 above for more information on FEINs.
Complete Schedule CC and include copies of the inventory and will, including any codicils, with the request. The receipt of the Closing Certificate for Fiduciaries will not relieve the fiduciary from the responsibility of filing the final fiduciary return.
Note: If an estate does not have enough income to require filing and needs a Closing Certificate for Fiduciaries, or if the estate will be filing only one fiduciary return when the estate is closed and needs the closing certificate before filing the return, use the following procedures:
- Complete the Schedule CC
- Sign and date the Schedule CC
- Include copies of the inventory and will
- Electronically file (see common question number 2 above) or mail the certificate request to: Wisconsin Department of Revenue PO Box 8918 Madison, WI 53708-8918
Trusts
Complete Schedule CC and include copies of the trust instrument and any amendments and a statement as to why the trust is closing. For each tax year a fiduciary income tax return was not filed with Wisconsin in the last four years, provide copies of informal or formal annual accountings or annual schedules showing the trust’s income and expenses.
Electronically file (see common question number 2 above) or mail the certificate request to: Wisconsin Department of Revenue PO Box 8918 Madison, WI 53708-8918
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Tips for preparing Schedule CC.
- If probate doesn't require a Closing Certificate, do not file a Schedule CC.
- Do not send Schedule CC with
Form W-RA,
Required Attachments for Electronic Filing, or Form 2. Schedule CC must be filed separately. Only use
Form W-RA to paper file required attachments when Schedule CC is filed electronically (see common question number 2 above for information on filing electronically).
- The decedent's name should be entered as requested (last name, first name, middle initial). For Example, do not enter "Estate of John Doe" or "John Doe Estate."
- Do NOT truncate the decedent's social security number.
- The certificate will be mailed using the name and address exactly as entered at the top of Schedule CC. Make sure this information is correct, current, and consistent. For example, do not enter the attorney's name with personal representative's address.
- Enter the name of the county of jurisdiction, not a numerical code.
- Enter the probate case number.
- For an estate, enter the decedent's complete social security number and the estate's FEIN, date of death and the county of jurisdiction.
- For an estate, be sure to complete line 4 of Schedule CC if the decedent has not filed tax returns for any of the four preceding taxable years.
- Include copies of the probate inventory and will, if there is one. If sending them as PDF files, please make sure your software supports this.
- Be sure to use the correct mailing address (PO Box 8918, Madison, WI 53708-8918).
- Unless requested by DOR, do
not include a cover letter.
- Complete the "Third Party Designee" section if you want to allow a tax preparer or tax preparation firm, attorney, family member, friend, or any other person you choose to discuss the status of your Wisconsin Schedule CC with the department. See the Schedule CC instructions for details.
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Tips for filing Form 2.
- Returns must be filed on the correct tax year Form 2. If an estate's fiscal year begins on December 1, 2022, and ends on November 30, 2023, the estate should use the 2022 Form 2 to file.
- The year printed in the upper right-hand corner of the form should be the same as the year the period begins.
- The Federal Employer Identification Number (FEIN) of the trust must be used.
- The trust name
must be the same on each return filed.
- The type of trust must be indicated on each return filed.
- The name of the county of jurisdiction must be entered. (Do not use a number)
- All appropriate boxes on page 1, page 2, and page 3 of the Form 2 must be completed.
- The estimated tax payments for fiduciaries must be entered on the correct line of Form 2, and should be verified.
- The estimated tax payments should be mailed to the Wisconsin Department of Revenue, PO Box 3028, Milwaukee, WI 53201-3028, and
not to PO Box 8906, Madison.
- A contact name and daytime phone number should be provided.
- If there are capital gains or losses, a Schedule 2WD must be filed with a Form 2; a Form 1 Schedule WD may not be substituted.
- Include documentation to verify withholding claimed.
- Form 1041,
U.S. Income Tax Return for Estates and Trusts, and all schedules must be included.
- Electing Small Business Trusts (ESBT) that hold stock in one or more tax-option (S) corporations must be treated as a separate trust according to sec. 641(c)(1)(A), IRC. Therefore, an ESBT that has Wisconsin sourced income from a tax-option (S) corporation must calculate tax on the portion of tax-option (S) corporation income separately. Losses reported by the trust not related to the tax-option (S) corporation portion cannot reduce ESBT income. ESBT income is taxed at a rate of 7.65 percent.
- ESBT that has Wisconsin sourced income or losses from a tax-option (S) corporation must include a copy of the Schedule 5K-1,
Tax-Option (S) Corporation Shareholder's Share of Income, Deductions, Credits, etc., from the tax-option (S) corporation, or the federal Schedule K-1 if the tax-option (S) corporation is not required to file a Wisconsin income tax return.
- The Schedule 2K-1,
Beneficiary's Share of Income, Deductions, etc., must be completed and filed when there is a difference between federal and state income.
Do Not:
- File a final fiduciary income tax return with an amount due. All income must be distributed in the final year.
- File a final return without having distributed the corpus.
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What trusts must file Wisconsin fiduciary returns?
- Grantor type trusts filing under a federal employer identification number instead of a grantor's social security number, including qualified subchapter S trusts (QSSTs), must file a Form 2.
- Qualified subchapter S trusts (QSST) must file Wisconsin fiduciary income tax returns, Form 2, to report their share of tax-option (S) corporation income, whether or not all of the trust's income is distributed. In addition, the beneficiary of a QSST must file Wisconsin individual income tax returns. See
Publication 102,
Wisconsin Tax Treatment of Tax-Option (S) Corporations and Their Shareholders, for more information.
- A Wisconsin resident trust must file a Wisconsin fiduciary return if it has (a) any taxable income for the taxable year, or (b) gross income of $600 or more, regardless of the taxable income.
Gross income means all income, before deducting expenses, reportable to Wisconsin which is received in the form of money, property, or services. It does not include items which are exempt from Wisconsin tax.
Example: A trust has $400 of interest income. It makes no distributions and therefore only has an exemption of $100, which would result in taxable income of $300. The trust is required to file a Wisconsin fiduciary return, because it has taxable income.
- A nonresident trust must file a Wisconsin fiduciary return if it has (a) any Wisconsin taxable income for the year, or (b) gross income from Wisconsin sources of $600 or more, regardless of the taxable income.
Wisconsin source income includes income or gain from:
- Real or tangible personal property located in Wisconsin.
- A business, trade, profession, or occupation carried on within Wisconsin, including a sole proprietorship and a corporation taxed under Subchapter S of the Internal Revenue Code.
- Personal or professional services performed in Wisconsin either as an individual or as a member of a partnership or limited liability company.
- Income received from the Wisconsin state lottery or a multijurisdictional lottery if the winning lottery ticket or lottery share was purchased from a Wisconsin retailer.
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How do I determine the residency of a trust?
Testamentary Trusts
A trust created by a decedent's will (testamentary trust) is resident at the domicile of the decedent at the time of the decedent's death, unless transferred by a court having jurisdiction to another court's jurisdiction.
Inter Vivos Trusts
Inter vivos trusts that are made irrevocable and were administered in Wisconsin before October 29, 1999, shall be considered resident at the place where the trust is being administered.
The following inter vivos trusts that become irrevocable on or after October 29, 1999, or that became irrevocable before October 29, 1999, and are first administered in Wisconsin on or after October 29, 1999, are resident of Wisconsin:
- Trusts, or portions of trusts, the assets of which consist of property placed in the trust by a person who is a resident of Wisconsin at the time that the property was placed in the trust if, at the time that the assets were placed in the trust, the trust was irrevocable.
- Trusts, or portions of trusts, the assets of which consist of property placed in the trust by a person who is a resident of Wisconsin at the time that the trust became irrevocable if, at the time that the property was placed in the trust, the trust was revocable.
A trust is revocable if the person whose property constitutes the trust may revest title to the property in that person.
A trust is irrevocable if the power to revest title does not exist.
Examples:
Law prior to October 29, 1999:
- John Doe, a resident of Wisconsin, set up an irrevocable trust on October 22, 1999, in Wisconsin that is administered in Wisconsin.
- The trust is a resident of Wisconsin while it is administered in Wisconsin.
- Mary Doe, a resident of Florida, set up an irrevocable trust on October 22, 1999, in Wisconsin that is administered in Wisconsin.
- The trust is a resident of Wisconsin while it is administered in Wisconsin.
- Jack Doe, a resident of Wisconsin, set up an irrevocable trust on October 22, 1999, in Florida that is administered in Florida.
- As long as the trust is not administered in Wisconsin, the assets placed into the trust are nonresidents of Wisconsin.
- If the irrevocable trust is first administered in Wisconsin
before October 29, 1999, the residency of the trust is based on where the trust is being administered.
- If the trust is first administered in Wisconsin
on or after October 29, 1999, Wisconsin residency is determined asset by asset as they are placed into the trust. An asset is a Wisconsin resident if the person placing the asset into the trust is a Wisconsin resident at the time the asset is placed in the trust, this includes assets placed in the trust before the trust is administered in Wisconsin.
- James Doe, a resident of Wisconsin, set up a grantor (revocable) trust in Arkansas that is administered in Arkansas. The trust became irrevocable at death on October 22, 1999. James was a Wisconsin resident at death.
- As long as the trust is not administered in Wisconsin, the assets placed into the trust before October 22, 1999, are nonresidents of Wisconsin.
- If the trust is first administered in Wisconsin
before October 29, 1999, the residency of the trust is based on where the trust is being administered.
- If the trust is first administered in Wisconsin
on or after October 29, 1999, Wisconsin residency is determined asset by asset as they are placed into the trust. An asset is a Wisconsin resident if the person placing the asset into the trust is a Wisconsin resident at the time the asset is placed in the trust, this includes assets placed in the trust before the trust is administered in Wisconsin.
- Susan Doe, a resident of Wisconsin, has an irrevocable trust that is administered in Florida. On October 22, 1999, made an irrevocable gift to the trust of their company stock.
- As long as the trust is not administered in Wisconsin, the company stock is a nonresident of Wisconsin.
- If the trust is first administered in Wisconsin
before October 29, 1999, the residency of the company stock is based on where the trust is being administered.
- If the trust is first administered in Wisconsin
on or after October 29, 1999, the company stock is a resident of Wisconsin on the date the trust began to be administered in Wisconsin. The company stock will continue to be a resident of Wisconsin even if the administration of the trust subsequently changes from Wisconsin back to Florida.
- Martha Doe, a resident of Wisconsin, set up an irrevocable trust administered in Wisconsin in 1997. Martha moved to Florida on October 22, 1999, established Florida residency, and moved their trust to Florida.
- The residency of the trust follows the place of administration. Therefore, the trust is a nonresident of Wisconsin while it is administered in Florida.
Law change effective on and after October 29, 1999:
- John Doe, a resident of Wisconsin, set up an irrevocable trust on December 15, 1999, in Wisconsin that is administered in Wisconsin.
- All of the assets that John Doe placed into this trust on December 15, 1999, are residents of Wisconsin. Those assets will continue to be residents of Wisconsin even if John Doe changes domicile to another state and/or the place of administration changes to another state.
- Jack Doe, a resident of Wisconsin, set up an irrevocable trust on December 15, 2005, in Florida that is administered in Florida.
- All of the assets that Jack Doe placed into this trust on December 15, 2005, are residents of Wisconsin. Those assets will continue to be residents of Wisconsin even if Jack Doe changes domicile to another state.
- Mary Doe, a resident of Florida, set up an irrevocable trust on December 15, 2005, in Wisconsin and is administered in Wisconsin.
- All of the assets that Mary Doe placed into this trust on December 15, 2005, are nonresidents of Wisconsin. Those assets will continue to be nonresidents of Wisconsin even if Mary Doe changes domicile to Wisconsin and/or the place of administration changes to Wisconsin.
- James Doe, a resident of Wisconsin, set up a grantor (revocable trust) in Arkansas that is administered in Arkansas. The trust became irrevocable on James's death on December 15, 2005; James was a Wisconsin resident at the time of death.
- All the assets that James Doe placed into this trust are residents of Wisconsin.
- Susan Doe was a resident of Florida from 2001 until December 15, 2005, when they became a resident of Wisconsin. On March 20, 2002, they created an irrevocable trust, and the trust was administered in Florida until December 15, 2005, when it began to be administered in Wisconsin. Susan made two irrevocable gifts to the trust:
- On March 20, 2002, they gave $1.5 million of rental real estate property located in Wisconsin to the trust.
- On January 1, 2006, they gave $2 million of rental real estate property located in Florida to the trust.
The rental property placed into the trust on March 20, 2002, is a nonresident of Wisconsin. Note: although this rental property is a nonresident of Wisconsin, the income from this property is taxable to Wisconsin because the property is located in Wisconsin as provided under
sec. 71.04(1)(a), Wis. Stats. The rental property placed into the trust on January 1, 2006, is a resident of Wisconsin. Note: although this property is located in Florida, the income from this property is taxable to Wisconsin under
sec. 71.04(1)(a), Wis. Stats., because the trust is a resident of Wisconsin for the portion of the property as provided under
sec. 71.14(3m)(a)1., Wis. Stats. - Martha Doe, a resident of Wisconsin, set up an irrevocable trust in Wisconsin on December 15, 1999. In March of 2005, Martha moved to Florida and became a Florida resident.
- All of the assets that Martha Doe placed into the trust on December 15, 1999 and before they moved to Florida in March of 2005, are residents of Wisconsin. Those assets will continue to be residents of Wisconsin even though Martha Doe changed domicile to Florida in March of 2005.
- Any asset that Martha Doe places into the trust while a resident of Florida is a nonresident of Wisconsin
Note: Wisconsin sourced income must be determined separately for each asset in an irrevocable trust according to
sec. 71.04, Wis. Stats., based on each asset's residency.
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I received an inheritance from my aunt. Do I have to report it as income on my income tax return?
An inheritance is generally not subject to income tax since the deceased has already paid income tax on the money.
Any income earned after your aunt's death would be taxable to the estate. If the inheritance or part of the inheritance is subject to income tax, you will receive a form (usually a Schedule K-1) from the estate telling you how much income to report and where to report it on your federal and state income tax returns.
Examples of inherited property not subject to income tax are stock, bank accounts, life insurance proceeds, and real estate.
Examples of inherited property that may be subject to income tax are individual retirement accounts (IRAs), dividends paid on stock, interest paid on bank accounts, or installment payments on a land contract received after your aunt's death.
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Are estates and trusts required to withhold Wisconsin income tax for nonresident beneficiaries?
In general, a trust or estate that has Wisconsin income for a taxable year that is allocable to a nonresident beneficiary must withhold Wisconsin tax on that income to the extent it is Wisconsin income to the nonresident. See Wisconsin
Form PW-1,
Wisconsin Nonresident Income or Franchise Tax Withholding on Pass-Through Entity Income, and the related instructions for more information.
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How does the federal qualified business income deduction under sec. 199A, of the Internal Revenue Code (IRC), impact filing of Wisconsin Form 2?
Wisconsin did not adopt the federal deduction for qualified business income. Any federal qualified business income deduction claimed according to sec. 199A, IRC, that is included in the computation of federal taxable income of a fiduciary or its beneficiaries must be added back to Wisconsin taxable income. Resident estates and trusts use Schedule B of Form 2, and nonresident estates and trusts use Schedule NR.
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For taxable years beginning after December 31, 2017, does Wisconsin follow the federal treatment for deductions under secs. 67(e) and 642(h), of the Internal Revenue Code (IRC), treated as excess deductions in the final year of an estate or non-grantor trust and deductible in determining a beneficiary's adjusted gross income instead of treated as an itemized deduction?
Yes. Wisconsin follows the final treasury regulations from the IRS under TD
9918, as they relate to secs.
67(e) and
642(h), IRC, for determining the character, amount, and allocation of deductions in excess of gross income succeeded to by a beneficiary on the termination of an estate or non-grantor trust for taxable years beginning after December 31, 2017.
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What deductions under secs. 67(e) and 642(h), of the Internal Revenue Code (IRC), may be treated as excess deductions in the final year of an estate or non-grantor trust and deductible in determining a beneficiary's adjusted gross income instead of treated as an itemized deduction?
Wisconsin follows the federal determination for purposes of determining what deductions under secs.
67(e) and
642(h), IRC, may be treated as excess deductions in the final year of an estate or non-grantor trust and deductible in determining a beneficiary's adjusted gross income instead of treated as an itemized deduction. Some of these deductions include:
- Costs paid or incurred in connection with the administration of the estate or trust which would not have been incurred otherwise.
- Deductions allowable under sec.
642(b), IRC (concerning the personal exemption of an estate or non-grantor trust).
- Deductions allowable under sec.
651, IRC (concerning the deduction for trusts distributing current income).
- Deductions allowable under sec.
661, IRC (concerning the deduction for estates and trusts accumulating income).
See final treasury regulations from the IRS under
TD 9918, for more information on allowable excess deductions on termination of an estate or trust.