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Wisconsin

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 happens when the state Wisconsin hasn’t adopted the Internal Revenue Code (IRC) limitation on the deduction of net business interest expense under IRC sec. 163(j).
Solution
This Diagnostic is a severe diagnostic and won’t prevent you from e-filing. Follow these steps to fix it:
  1. Go to
    Organizer
    ,
    States
    , then
    State and City Activation/Consolidation
     folder.
  2. Select
    State and City Activation/Consolidation
    , the
    States
     tab, right-click on
    Entity Type (column E)
     and
    Subview
     to lower members.
  3. Verify you have the
    1 Parent, 1 Elim and the rest are subsidiaries
     change
    Entity Type
    .
  4. If it's from
    Single to subsidiary
    , then do a Full recompute.
  5. Go to the
    Top Consolidation
     locator and
    Consolidate
    .
  6. Go to
    Organizer
    , then
    Consolidated Returns
    .
    1. Select
      What to Consolidate
      ,
      Consolidated Return List
      , then
      Press Subsidiary Listing Complete
      .
    2. Select
      Organizer
      , then
      Consolidated Returns
      .
    3. Select
      Review Preconsol Checklist
      ,
      Out of balance and compute pending
      , then
      Press Compute all Subsidiaries now
      .
    4. Select
      Consolidate
      .
  7. Recreate the e-file.
note
You can't have a single entity in a Top consolidation Locator.

This article applies to:

  • PRODUCT: ONESOURCE Income Tax
  • Return type: 1120 Corporation
  • State: Wisconsin
  • Subject: e-file

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