E-file diagnostic: Limitation on Business Interest Expense under Section 163(j): Wisconsin
Limitation on Business Interest Expense Under Section 163(j): Wisconsin has not adopted the Internal Revenue Code (IRC) limitation on the deduction of net business interest expense under IRC sec. 163(j). The State of Wisconsin has informed us that adjustments for Form 4 should be made on Schedules 4V, line 10 (other) or 4W, line 14 (other). Adjustments for Form 5s should be made on Schedule 5K, line 1, column C and adjustments for Form 6 should be made on Part II, lines 2j or 4n. Form 6 adjustments must be made at the parent or subsidiary level and cannot be made directly on the topcon. Note that the federal amount now reflects CARES changes.
This diagnostic appears because Wisconsin has not adopted the Internal Revenue Code (IRC) limitation on deducting net business interest expense under IRC Section 163(j).
Solution
This is a severe diagnostic but will not prevent you from e-filing. Follow these steps to resolve it:
- SelectOrganizer,States, then theState and City Activation/Consolidationfolder.
- SelectState and City Activation/Consolidation, then go to theStatestab. Right-click onEntity Type (column E)and selectSubviewto view lower members.
- Verify you have the 1 Parent, 1 Elim and the remaining entities are subsidiaries. ChangeEntity Typeif needed.
- If you changed the entity type fromSingletoSubsidiary, perform a full recompute.
- Go to theTop Consolidationlocator and selectConsolidate.
- Go to theOrganizerand selectConsolidated Returns.
- SelectWhat to Consolidate,Consolidated Return List, thenSubsidiary Listing Complete.
- Go to theOrganizerand selectConsolidated Returns.
- SelectReview Preconsol Checklist,Out of balance and compute pending, thenCompute all Subsidiaries now.
- SelectConsolidate.
- Recreate the e-file.
note
You can't have a single entity in a Top Consolidation Locator.
