Problem with Capital Gains on a Wisconsin Non-Resident Return

Forum|Forum|3 months ago
April 11, 2026
2 replies
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I was employed for the last 2 months of 2025 in Wisconsin but filing a non-resident return as I my legal residence is still in Michigan.

I have a long-term capital loss from a single sale of stock with is currently reported on line 8a on my Federal Schedule D since it is was reported on a 1099 and there is only one affected transaction.

I think it needs to reported instead it on line 8b with a form 8949 so that I can exclude it as a non-resident loss on my Wisconsin return, but TurboTax is not generating a Form 8489 and TT is carrying the loss that I am not entitled to forward to the Wisconsin return.

The Wisconsin Dept of Revenue webpage for "Reporting Capital Gains and Losses for Wisconsin by Individuals , Estates and Trusts" on page 7 states

E. Federal Capital Losses Incurred by Wisconsin Nonresident

Wisconsin treatment: Wisconsin las does not permit the deduction of capital losses incurred prior to the date Wisconsin residence is established.

How to report: For nonresidents and ... do not include the losses on Schedule WD or Schedule 2WD

I am unable to delete the entry from the TT Wisconsin Form WD . Any suggestions?

MelindaS1

Level 6

As you proceed through the State Taxes interview screens, one of the first should be a menu titled "Here's the income that Wisconsin handles differently" (see below), under Investments, select Start next to Wisconsin Capital Gains and Losses to make your adjustment(s).

FYI, you'll be filing Form WD and not 2WD (for estates and trusts), so you can skip over instructions for that form.

I also happened to run into this in the Form WD instructions, just in case your capital loss happens to be on Wisconsin-source property, you can take it:

Nonresidents and Part-Year Residents: Nonresidents should include only gain or loss from Wisconsin sources on Schedule WD. Part-year residents should include the gain or loss received from all sources while a Wisconsin resident and the gain or loss from Wisconsin sources while a nonresident.

Gain or loss from Wisconsin sources includes gain or loss from the sale of land, buildings, and machinery located in Wisconsin, gain from the sale of stock acquired under an incentive stock option or employee stock purchase plan to the extent attributable to personal services performed in Wisconsin, and your share of gain or loss from an estate or trust, partnership, limited liability company (LLC), or tax-option (S) corporation which has been reported to you on Wisconsin Schedule 2K‑1, 3K-1, or 5K‑1. It doesn’t include losses from nonbusiness bad debts and worthless securities, and gains or losses from sales of stocks (except gain on stock acquired under an incentive stock option or employee stock purchase plan as explained above) while a nonresident.

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user17708509786Author

Level 2

I was eventually able to solve my problem on the Wisconsin Return not letting me exclude the capital gain on stock sold during the year by entering each of the sales transactions individually to generate an 8949 on my Federal return. Previously, I had chosen on the Federal Return to only Report the summary of sales as presented on the 1099. When using the Summary of Sales approach I was unable to exclude the income in question on the Wisconsin WD.

With the individual sales shown, the Wisconsin Return then allowed me to exclude the sales as a Nonresident.