Wisconsin Income Allocation

[447debbie]

Resident state is Illinois.  Own property in both AZ and WI.  Sold one rental property in the non-resident state of AZ. 
My Step 1:  Completed the Federal Tax return in TurboTax.
My Step 2:  Completed the AZ Tax return in Turbo Tax.
My Step 3:  Tried completing the WI Tax return and it insists on taxing the capital gains from the sale in AZ.  How do I stop WI from taxing the capital gains that are not from WI AND I am NOT a reside of WI.  

Turbo Tax Premiere Windows Desktop Version

[MaryK4]

It does not tax the capital gain- Wisconsin prepares the state AS IF you are a full-time resident, using all income, deductions, etc. It then computes the Wisconsin percentage of total income that percentage is applied to the  tax due.  

[447debbie]

But it is.  It is taking my capital gains from the AZ sale, multiplying it by  ~70%, and then listing that value (top redacted value below) with the title:  Wisconsin Capital Gains and Losses

The full capital gain amount shows up on Form 1NPR Line 7 Column "Federal Amount"
The 70% value shows up on Form 1NPR Line 7 Column "Wisconsin Amount"
Nothing shows up on Form 1NPR Line 7 Column "Non-Wisconsin Amount"

In my opinion, the blank should be in the Column for "Wisconsin Amount" and some other value, either the 100% or the 70% should be in the Column for "Non-Wisconsin Amount"

On another note - same Form 1NPR:  Turbo Tax is also putting my interest income, earned in my resident state of Illinois, into the column titled "Wisconsin Amount" vs the the column titled, "Non-Wisconsin Amount".

[JamesG1]

Tell the Wisconsin state income tax return software not to report the capital gain as Wisconsin income at this screen.  Click Edit.

Select Don't report on my Wisconsin return.

Assign the interest income to the state of Illinois.  Make this selection.

Assign to state of residence.

@447debbie 

[447debbie]

Somehow or other, the capital gains that was being reported under the "Wisconsin column" had disappeared overnight.  I was playing around with the forms and deleting some forms.  Illinois was one that I deleted so maybe that fixed that I don't know.

Regardless, the taxable interest is still being reported under the "Wisconsin column."  Maybe when I do the Illinois form that will fix itself, hopefully. Going thru the steps you provided did not work.

Question:  Is this Turbo Tax all about knowing how to manipulate the program to make the forms come out right?  I mean if that's the case it's a lost cause because I use Turbo Tax to have it fill out forms correctly.  I should not be expected to know how to manipulate the program.

[447debbie]

Just a follow-up.  None of the information in these replies worked. I don't even get those screen on the Premiere desktop version.

I eventually ended up working with a TurboTax phone help.  She had to do a lot of manual calculations to tell me what numbers to enter so the program would fill out the forms correctly.  I've used TurboTax for five years now, I'm not sure there will be a sixth.  If I wanted to screw around with all the IRS forms I wouldn't have TurboTax.  Luckily I know more about the tax code than the average person.  What do most people do?  Just pay tax in two places?  Using the wrong numbers because that's what TurboTax provides?  You shouldn't have to manually do stuff that the software should be doing, and the software should perform the same as it has in past years (it was also assigning my resident state interest to my non-resident state.)  For the interest, she just had me put in an extra miscellaneous entry to balance it out.  It didn't remove it, but it put it on another line as being income that is not supposed to be taxed by WI and included a Wisconsin Schedule M.)

There should be a helpline for people to call WHEN THERE ARE PROGRAM PROBLEMS.  Instead we get lumped in with people that just can't figure out the program and get told we need a tax expert.  We worked with the first expert for four hours.  She was supposed to get back to us the next day.  Took my email and told me she would send a confirmation email.  She never sent the email and never called back.  I have a case number on that one. 

When she never called back, I called in and got someone else to work with it but we had to start all over again.  What a nightmare.

[Sheri10]

I am also having a difficulty with the taxable interest from the federal return showing in the Wisconsin column allocation on the Wisconsin nonresident 1NPR return.  Page 18 of the 1NPR instructions says agrees that it should not be there if not from Wisconsin sources.  I tried the fix suggested of going back into the federal return in the 1099-INT section and checking the box for state withholding, putting in the "0" withheld and showing the state as Illinois (my resident state).  When I went back into the Wisconsin 1NPR nothing has changed.  I have been looking at this for a couple of weeks and holding my returns hoping a correction would be made.  Thank you for any  help.

[447debbie]

I worked on the phone with TurboTax for two hours  She couldn't figure it out either.  I see the Wisconsin program is updating, maybe they fixed it?  It doesn't tell you anymore what the updates are.  Who knows.  What I did was.....filled out a Wisconsin Schedule M to effectively remove it.  Thus, it stays on the Wisc NPR Form, but then makes it a negative for the same amount on Schedule M.  

I cannot remember where in the TurboTax Desktop Premier program it was, that drove the generation of the Schedule M though.   It was something to do with defining items not applicable to Wisconsin.  Maybe someone here can fill in that blank.  

[HopeS]

See below screenshots to assist you in fixing the allocation issue:

You need to tell the State not to allocate capital gain. Click Edit

Select Don't report on Wisconsin return

See additional information in the Link Below:

Wisconsin Income Allocation

Once completed, log out and clear the Cache before logging back into your TT account.

How to Clear Cache

@Sheri10 

@44ydebbie

[Sheri10]

Thank you for your reply.  What I finally did is this.   In the Wisconsin Income section, I went into the section called "Income that Wisconsin Handles Differently" and went through the screens to "Wisconsin Nontaxable Income."  Then I entered into Type "IL Taxable Interest" and the amount.  This corrected the return, although the interest remains in the Wisconsin B column on page 1 of the 1NPR.