Instructions for 2023 Schedule T

Who must file Schedule T
Complete Schedule T if:
•  You  sell  or  otherwise  dispose  of  an  asset  which  has  a  different  basis  for  Wisconsin  than  for  federal  income  tax 
purposes; or
•  You claim depreciation or amortization on an asset which has a different basis for Wisconsin than for federal income 
tax purposes at the time the property is acquired.
Exception: Do not complete Schedule T:
•  If the difference in federal and Wisconsin basis is due to Wisconsin’s definition of the Internal Revenue Code (use 
Schedule I instead), or to a different federal election used for federal versus Wisconsin tax purposes (redo federal 
return using election chosen for Wisconsin or use Schedule I).

General Instructions
An asset may be either constant basis or changing basis.

Constant Basis Assets Constant basis assets are assets, other than inventories, which are not subject to depreciation, 
depletion, or amortization, and which do not affect the computation of taxable income until you sell or otherwise dispose 
of them. Examples include land, stocks, and bonds.

Account for any difference between the Wisconsin basis and the federal basis of a constant basis asset only when you 
sell or otherwise dispose of the asset and recognize gain or loss on the transaction. Use Part I or Part II of Schedule T.

An adjustment for difference in basis generally applies to:
•  Constant basis assets which you owned on December 31, 1964 (or, if you filed on a fiscal year basis, on the last day 
of your 1964 fiscal year).
•  Property acquired by inheritance, the value of which was different for Wisconsin inheritance tax purposes than for 
federal estate tax purposes. This applies to property received as a result of deaths before January 1, 1992.
•  Stock you owned of a tax-option (S) corporation. 
•  An investment in a qualified new business venture or qualified Wisconsin business (QWIB), the Wisconsin basis of 
which was reduced by deferred long-term capital gain realized on or after January 1, 2011. 

For a person who is a nonresident of Wisconsin at the time of disposition of a constant basis asset, an adjustment is 
required only if the asset is located in Wisconsin.

Example: In 2023, you sold a vacant lot located in Wisconsin. You purchased the lot in 1960 for $1,000 and never 
received income from use of the lot. As required under prior Wisconsin law, you capitalized the taxes paid on the lot. 
From 1960 through 1964, you paid a total of $300 of real estate taxes on this lot. Your Wisconsin basis when you sold 
it was $1,300 ($1,000 plus $300). For federal purposes you were allowed to deduct the real estate taxes and, therefore, 
your federal basis was $1,000, the original cost. Use Part I of Schedule T to adjust your 2023 Wisconsin return to account 
for the $300 difference in basis.

Changing Basis Assets Changing basis assets are inventories and assets or accounts, including liability and reserve 
accounts created by accruals or other charges deducted from income, other than annuities. Examples:
•  Tangible property subject to depreciation, depletion, or amor tization; intangible property subject to amortization of 
cost, premium, or discount.
•  Capitalized intangible expenses such as trademark, research and development, and loan expenses.
•  Accruals, reserves, and deferrals of income or expense.

Account for any difference between the Wisconsin basis and the federal basis of a changing basis asset acquired on or 
after the first day of your taxable year beginning in 2014 by writing off the dif ference in basis over the life of the asset. 
Use Part III of Schedule T. However, if you dispose of the asset before the entire difference in basis has been written off, 
account for the remaining difference in the year of disposition. Use Part II of Schedule T.
I-119 (R. 11-23)

Example: In 2022, you acquired a depreciable asset you use in your trade or business. The asset has a useful life of 
5 years, a Wisconsin basis of $12,000, and a federal basis of $14,000. During the year 2022, you made an adjustment on 
Schedule T to write off $400 (one-fifth) of the basis difference. At the end of your 2023 taxable year you sold this asset. 
Use Part II of Schedule T to adjust your 2023 Wisconsin return for the remaining $1,600 difference in basis.

Specific Instructions
PART I – Adjustment for Capital Assets
Fill in Part I to adjust capital gains/losses if capital assets sold or otherwise disposed of in 2023 had a different basis for 
Wisconsin than for federal income tax purposes. (Do not list assets reported on federal Form 4797, such as depreciable 
property used in a trade or business, in Part I. See Part II.)

To  figure  your  adjustment,  first  determine  the  holding  period  for  each  capital  asset  which  had  a  different  basis  for 
Wisconsin than for federal income tax purposes.
 
For capital assets held one year or less, fill in line 1a. If the Wisconsin adjusted basis (column B) is more than the federal 
adjusted basis (column A), fill in a negative number in column C. Combine the amounts in column C and fill in the result 
on line 1b of Schedule T and on line 6 of Wisconsin Schedule WD (enter a negative number as a loss).

For capital assets held more than one year, fill in line 2a. If the Wisconsin adjusted basis (column B) is more than the 
federal adjusted basis (column A), fill in a negative number in column C. Combine the amounts in column C and fill in the 
result on line 2b of Schedule T and on line 15 of Wisconsin Schedule WD (enter a negative number as a loss).
Note: If there is not adequate space on lines 1a and 2a to list each capital asset which had a different basis for Wisconsin 
than for federal income tax purposes, include a separate sheet with Schedule T, giving the required information.

Example 1 (Sale of Stock with Deferred Gain on Purchase): 
In 2023, you sell the following assets:
•  Stock in Company ABC that you purchased in 2020 with a federal deferred gain of $1,000.
• Stock in a Qualified Wisconsin Business that you purchased in 2020 with a Wisconsin deferred gain of $5,000.
Complete Part I, Line 2, as follows:  

  2a  Description of Capital  Assets  Held More Than One           Federal          Wisconsin 
                                                                                                      Difference
         Year, and Reason for Difference in Basis                Adjusted Basis     Adjusted Basis
  Stock in Company ABC (Deferred federal gain on purchase)         $3,000                 $4,000      $(1,000)
  Stock in a Qualified Wisconsin Business (Deferred Wisconsin 
  gain on purchase)                                                $20,000                $15,000           $5,000
  2b  TOTAL - Combine amounts in column C. Fill in here and on line 15 of Wisconsin Schedule WD             $4,000

Example 2 (Sale of Land with Deferred Gain from a Sec. 1031, IRC, Like-Kind Exchange):

In 2019, you were a resident of Ohio and owned land in Ohio with a federal adjusted basis of $25,000 .

In 2020, you exchanged the land in Ohio for land in Wisconsin with a fair market value of $75,000. You elected to 
postpone recognition of the $50,000 gain as a like-kind exchange.

In 2023, you are a resident of Ohio and you sell the land in Wisconsin for $200,000.

The Wisconsin adjusted basis in the land is the same as the federal adjusted basis of $25,000. However, the $50,000 of 
gain postponed in the like-kind exchange is not reportable to Wisconsin. 

Complete Part I, Line 2, as follows:

  2a  Description of Capital  Assets  Held More Than One           Federal          Wisconsin 
                                                                                                      Difference
         Year, and Reason for Difference in Basis                Adjusted Basis     Adjusted Basis
  Land ($50,000 of deferred gain from a like-kind exchange of 
  out-of-state land)                                               $25,000                $75,000     $(50,000)
  2b  TOTAL - Combine amounts in column C. Fill in here and on line 15 of Wisconsin Schedule WD       ($50,000)
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For more information on basis of assets sold by a nonresident of Wisconsin, see Publication 122, Tax Information for Part-
Year Residents and Nonresidents of Wisconsin  .

PART II – Adjustment for Assets Reported on Federal Form 4797
Fill in Part II if you reported sales or other dispositions of assets on federal Form 4797 and there was a difference in the 
federal adjusted basis and the Wisconsin adjusted basis of any asset acquired on or after the first day of your taxable 
year beginning in 2014.

For each asset you disposed of during 2023, fill in the description, federal adjusted basis, and Wisconsin adjusted basis 
on line 3.

To figure your adjustment (line 4), follow the three steps given below. 

Note: The following instructions also apply if your share of partnership, tax-option (S) corporation, limited liability company 
(LLC) treated as a partnership or tax-option (S) corporation, estate, or trust income includes a gain or loss reportable on 
federal Form 4797 and the gain or loss is different for Wisconsin than for federal income tax purposes.

STEP 1: Recompute your federal Form 4797, Sales of Business Property.
•  For assets you sold or otherwise disposed of, use the Wisconsin basis from line 3 of Schedule T instead of the federal 
basis when recomputing Form 4797.
•  For those assets disposed of by a partnership, tax-option (S) corporation, LLC treated as a partnership or tax-option 
(S) corporation, estate, or trust, use the Wisconsin gain or loss instead of the federal gain or loss when recomputing 
Form 4797. (Note: The Wisconsin gain or loss can be found on Wisconsin Schedule 3K-1, 5K-1, or 2K-1.)
Label this recomputed Form 4797 “Wisconsin.” Include the “Wisconsin” Form 4797 with your Form 1 or Form 1NPR.

Note: In order to recompute Form 4797, you will also have to recompute Form 4684, 6252, or 8824 if any assets reported 
on these forms had a different Wisconsin than federal basis.

STEP 2: If you filled in a net long-term capital gain on your “Wis consin” Form 4797, you must use the figures from the 
“Wisconsin” Form 4797 to complete Wisconsin Schedule WD. Fill in the net long-term capital gain from your “Wisconsin” 
Form 4797 on line 12 of Schedule WD.

STEP 3: If you are filing Form 1, fill in lines 4a through 4h of Schedule T, as appropriate. (Note: Complete Step 3 only if 
you filled in Part II on either your federal or “Wisconsin” Form 4797.)
•  If you have a net ordinary gain for both federal and Wisconsin purposes, fill in lines 4a and 4b of Schedule T. Also fill 
in line 4c or line 4d, whichever applies.
•  If you have a net ordinary loss for both federal and Wisconsin purposes, fill in lines 4e and 4f of Schedule T. Also fill in 
line 4g or 4h, whichever applies.
•  If you have a net ordinary gain for federal purposes, but not for Wisconsin purposes, fill in lines 4a, 4b, 4e, and 4f 
of Schedule T. Also fill in line 4d and line 4g. Add the amounts on lines 4d and 4g and fill in the result on line 39 of 
Schedule SB.
•  If you have a net ordinary loss for federal purposes, but not for Wisconsin purposes, fill in lines 4a, 4b, 4e, and 4f 
of Schedule T. Also, fill in line 4c and line 4h. Add the amounts on lines 4c and 4h and fill in the result on line 10 of 
Schedule AD.

If you are filing Form 1NPR, do one of the following:
•  Nonresidents – fill in the amount of ordinary gain or loss computed on the “Wisconsin” Form 4797 that is from Wisconsin 
sources on line 8, column B, of Form 1NPR.
•  Part-year and full-year residents – fill in the amount of ordinary gain or loss computed on the “Wisconsin” Form 4797 
that is from all sources while a Wisconsin resident and from Wisconsin sources while a nonresident, on line 8, column 
B, of Form 1NPR.

PART III – Changing Basis Assets 
Fill in Part III if you acquired a changing basis asset on or after the first day of your taxable year beginning in 2014 and 
the Wisconsin basis of the asset is different than the federal basis.

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You must make an adjustment to federal adjusted gross income for each year that you claim a deduction (depreciation, 
depletion, or amortization) for the asset to properly reflect the difference in basis. In effect, you will be writing off 
the difference in basis over the life of the asset.

If you are filing Form 1, fill in any adjustment for a difference in basis on line 10 of Schedule AD or line 39 of Schedule 
SB, whichever is appropriate. See lines 6 and 8 of Schedule T.

If you are filing Form 1NPR, combine any adjustment for a difference in basis with the income or loss from the activity in 
which the asset is used when figuring the amount to include in the Wisconsin column on the applicable line of Form 1NPR.

If you want to write off the difference in 5 years or less rather than make annual adjustments over the life of the asset, 
you must have the consent of the department. Send your request to the Technical Services Staff, Wisconsin Department 
of Revenue, PO Box 8933, Mail Stop 6-40, Madison WI 53708-8933.

If you dispose of an asset before you have made adjustments to write off the entire difference between the Wisconsin 
basis and the federal basis, account for the remaining basis difference in the year you dispose of the asset. See the 
instructions for Part II.

                         Applicable Laws and Rules
This document provides statements or interpretations of the following laws and regulations enacted as of November 17, 2023:  
ch. 71, Wis. Stats.

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