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bohnhorst1
New Member

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

 
12 Replies
VictorW9
Expert Alumni

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

But if the capital gains was reported in federal and not for Wisconsin State, and if that is correct, you should expect an understatement of WI income tax liability and not an overstatement. Usually a state income tax form starts with the transfer of federal AGI which would have included any capital gains from federal.

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bohnhorst1
New Member

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

Thank you for your response.  Permit me to clarify the confusion I caused in my original message.  The significant capital gains ($69,603) were correctly reported on Federal Schedule D.  Thus the $69,603 capital gains were included in Federal Adjusted Gross Income.  Wisconsin starts with Federal Adjusted Gross Income, so the $69,603 capital gains were included in line 1 of Wisconsin Form 1.  HOWEVER, line 10 on Form 1 allows a 30% exclusion for capital gains reported in Federal Adjusted Gross Income.  Schedule WD is used to compute the amount of capital gain subtraction ($69,603 x 30% = $20,881) allowable by Wisconsin in computing Wisconsin taxable income.  There was no Schedule WD included in the Wisconsin return that was filed by Turbo Tax, therefore there was no capital gain subtraction ($20,881) computed/allowed in computing  Wisconsin taxable income.  Instead of owing tax of $1,108 per the Turbo Tax Form !, I should receive a refund of $203.

To compound the issue, in preparing the Wisconsin return for filing I gave Turbo Tax my checking account information to allow a direct debit for the alleged $1,108 Turbo Tax said I owed.  This return was received by the Wisconsin Department of Revenue on 2/2/20.  Therefore I expect I will be charged the $1,108 before the correction to the Wisconsin return can be computed and filed via an amended Wisconsin Form 1.

If you would like to discuss this matter further, my home phone 3 is [phone number removed].  I will be home all day today (Tuesday).

Thank you very much for your assistance in resolving this issue.

AmyC
Expert Alumni

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

Let me try to help. The WI form WD is now showing available and supported in our system. You will be able to file an amended return AFTER your original is financially settled.

 

You can download the program to your computer for the amend. This will allow you to see the forms in forms mode and be sure everything suits you before mailing in the amended return.

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webcc
Level 2

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

From WI Form 1 Instructions, see Exception, this is a change from prior year, but where do we enter the 30%, Turbo Tax doesn't seem to carry it over any more?

 

Line 10 Capital Gain / Loss Subtraction

If your federal adjusted gross income includes capital gains and/or losses from line 13 of federal Schedule 1 (Form 1040), you must complete Schedule WD. You must also complete Schedule WD if your federal adjusted gross income does not include capital gains and/or losses, but you have a capital loss carryover for Wisconsin tax purposes.

Schedule WD determines whether any capital gain/loss subtraction must be reported on line 10. For example, after completing Schedule WD, you may be able to include an amount as a subtraction on line 10 because you qualify for the 30% long-term capital gain exclusion (60% in the case of farm assets).

All amounts must be filled in on line 10 as positive numbers.

 

EXCEPTION If the only amount reported as a capital gain on line 13 of your federal Schedule 1 (Form 1040) is a capital gain distribution from a mutual fund or real estate investment trust and you have no Wisconsin capital loss carryover, you may claim a long-term capital gain exclusion on line 10. Fill in 30% of the amount of the capital gain distribution on line 10. Do not complete Wisconsin Schedule WD.

 

 

Bnrees
Level 2

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

I ran into this same issue today which is after the date this form wd was supposedly available.  I get a wd worksheet but no form wd shows up.

 

 Brian Rees 

2/9/2020

webcc
Level 2

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

I had called Turbo Tax support regarding this issue. It looks like is corrected now. The 30% long term capital gain exclusion now is showing up on my WI Form 1, Line 10.  Also a Form WD was included, even though per Exception, it does not need to be completed & included with WI Form 1, if you had no WI capital loss carryover. But I am glad it was included, so I could see the Form & calculations.

Bnrees
Level 2

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

Glad to hear yours is working.  I tried mine this morning and it did not work and I did not see either the WD form or the 30% adjustment showing up yet.  I will wait a few more days and see if I get a software update.  Nothing was new this morning.

KrisD15
Expert Alumni

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

If you are using a desktop version, please be sure your software us up-to-date. 

Below is a link explaining how:

Update

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webcc
Level 2

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

You could also confirm, In Turbo Tax Deluxe, Under Your State Returns – Investments-Do you need to make any Wisconsin adjustments? Yes

 

Under Adjust Wisconsin Capital Gain Distributions. Enter the amount of Capital Gain Distribution that is to be included for Wisconsin. Confirm that Wisconsin Capital Gain Distribution is same amount as Federal Capital Gain Distribution.

 

I did not have any WI capital loss carryovers, just capital gains. Are you using Turbo Tax Deluxe version, I hope soon your WD Form & 30% Exclusion amount shows up on your WI Form 1, Line 10.

Bnrees
Level 2

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

I did check the update and it is the most current.  Still the same issue.  When I am in their capital gains section the wi tax due section at the top changes to about what I expect but when I leave it, it reverts to the higher amount and no schedule wd and no 30% adjustment.  All I get is a wd worksheet.  I am using the desktop version installed from a CD from Amazon purchase.

Bnrees
Level 2

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

I am using Premier version.  When I tried entering the amount of the long term gain distribution from the federal form, it increased the tax liability by a lot instead of decreasing it.  HOWEVER, when I entered 0 for long term adjustments instead of leaving blank, my tax liability recalc'd to where it should have been AND Form WD miraculously appeared along with the 30% adjustment in wi line 10!  Thanks for your response!

bohnhorst1
New Member

Significant capital gains reported on 2019 Federal Form D were NOT posted by Turbo Tax to my 2019 WI Form WD, thus resulting in a significant overstatement of WI income tax liability.

Thank you for your detailed response.  I use the Premier version as well.  When I was preparing the returns, both Federal & Wisconsin, on or about 2/1 I could see there was a problem, and I could figure out the issue was the lack of allowing the WI 30% capital gains exclusion.  When I went to file the Federal return I received a message saying the WI returns were not yet completed.  So I filed the Federal return.  To my surprise about 3 hour later I received an e-mail notice from Turbo Tax saying WI had accepted my 2019 return.  THE RETURN SHOULD NEVER HAVE BEEN FILED.

About a week later I heard on WI local news that the WI Dept of Revenue had not yet completed formatting their 2019 Form 1's for use in electronic filing.  This is something Turbo Tax should have told all users who file WI returns before they just went ahead and filed what they had.  I plan on filing an amended WI Form 1, but not before mid-March to assure that Turbo Tax has the proper forms, and that they are programmed correctly so that I don't have to play with the software to force an accurate return.

Thank you again for your time and your assistance.  In future year I will just delay filing either Federal or WI returns until after 2/15.

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