Instructions for 2023 Form 6CL:  
      Net Capital Loss Adjustments for Combined Group Members

Who Files Form 6CL  

Form 6CL is only for corporations that are combined group members. File Form 6CL only if either A. or B. below is 
true: 

A.   The corporation has unused capital loss carryovers incurred in taxable years beginning before January 1, 2009 
  (or other non-sharable capital losses) and the combined group reports a net capital gain on Form 6, Part I, line 
  30, or 

B.   The corporation has capital gain/loss items to report on Form N, Wisconsin Nonapportionable and Separately 
  Apportioned Income, for the taxable year  and the combined group computes a suspended net capital loss on 
  Form 6, Part I, line 30 and part of that suspended net capital loss is attributable to the corporation. 

 NOTE: If neither A. nor B. above is true in its entirety, do not file Form 6CL for the corporation. Also, Form 6CL 
 does not apply to corporations that are not combined group members, even if they are filing a Form N with the 
 combined return. 
 
Purpose of Form 6CL 

Under section 1211 of the Internal Revenue Code, capital losses may only be used to offset capital gains. Under sec. 
71.255(4)(i) and (11), Wis. Stats., and sec. Tax 2.61(6)(c), Wisconsin Administrative Code, the capital loss limitation 
is determined on an aggregate basis for the combined group, similarly to how it is determined for a consolidated 
group for federal purposes under Treas. Regs. §1.1502-22 and 1.1502-23.   

However, not all capital losses may be included in the aggregate computation for the combined group. The aggregate 
computation cannot include non-sharable capital loss carryovers or capital gain/loss items that members must report 
on a separate entity basis on Form N. 

The purpose of Form 6CL is to allow a combined group member to: 
•    Use the non-sharable capital loss carryovers it could not include in the group’s aggregate computation, and 
•    Apply all of its available capital losses, including its current year net capital loss from the group’s aggregate 
  computation, to capital gains that are reportable on a separate entity basis on Form N. 

A non-sharable capital loss is one which originated: 
• In a taxable year beginning before January 1, 2009, or 
In the combined unitary income of another combined group, or 
• In transactions reportable on a separate entity basis on Form N. 

As an alternative to completing 2023 Form 6CL, a combined group member with non-sharable capital loss carryo-
vers may choose to carry them back to a taxable year beginning before 2009, to the extent allowed under section 
1212 of the Internal Revenue Code. Also, see sec. Tax 2.61(6)(c), Wisconsin Administrative Code, for further de-
tails regarding elections a corporation may make regarding its capital loss carryovers.     
 
Line-by-Line Instructions 

These instructions are presented in the order the lines appear on Form 6CL:  

IC-544 (R. 12-23)                                    1 

                                               2023 Form 6CL Instructions 
 
Part I: Net Capital Loss Adjustments 

Line 1. Net Capital Gain Included in Combined Unitary Income – Enter the amount of net capital gain from Form 
6, Part I, line 30, but only if that amount was greater than $0. This is the net capital gain computed on an aggregate 
basis for the combined group as a whole.  

Line 2. Current Year Net Capital Loss Attributable to This Member – Complete this line only if Form 6, Part I, line 
30 was $0         and the corporation’s capital gain and loss items that were included in the aggregate computation would 
have been a net capital loss if they were netted on a separate entity basis. On line 2, enter the corporation’s share of 
the group’s aggregate net capital loss.  

To compute the amount on line 2, allocate a share of the group’s aggregate net capital loss to each member that 
would have had a net capital loss if its items included in the aggregate computation were netted on a separate entity 
basis. The example below illustrates: 

Example for Line 2:  

Combined Group STU consists of Member S, Member T, and Member U. In the taxable year 2023, S, T, and U have 
the following capital gain/loss items includable in the group’s aggregate computation: 

                                          __S__        __T__                           __U__ 
 Long term capital gain                                                                $5,000 

 Short term capital loss                 ($12,000)     ($6,000)                         

 Section 1231 gain/loss                  ($500)        $2,000                          $1,500 

When S, T, and U aggregate each class of capital gains and losses and section 1231 gains and losses, Group STU 
has a suspended net capital loss of ($10,000) and therefore enters $0 on Form 6, Part I, line 30.  

However, if S, T, and U’s capital gains and losses and section 1231 gains and losses are netted for each member 
separately, S would have a net capital loss of ($12,000) (its section 1231 loss would be treated as ordinary under 
section 1231(a)(2) of the Internal Revenue Code), T would have a net capital loss of ($4,000), and U would have a 
net capital gain of $6,500.  

Since only S and T would have a net capital loss if their capital gain/loss items included in the aggregation were 
netted on a separate entity basis, only S and T complete line 2 of Form 6CL. 
Of Group STU’s ($10,000) suspended net capital loss, $7,500[($10,000) x ($12,000)/($16,000)] is allocated to S and 
entered on line 2 of the member's Form 6CL and ($2,500) [($10,000) x ($4,000)/($16,000)] is allocated to T and 
entered on line 2 of the member's Form 6CL.  

Lines 3 and 4. Current Year Net Capital Gain or Loss from Separate Entity Items – If the corporation has capital 
gain/loss items that are reportable on Form N (and thus couldn’t be included in the aggregate computation on Form 
6, Part I, line 30), net those amounts separately, without regard to capital loss carryovers. The capital loss carryovers 
will be accounted for later on lines 8 and 9. 

If the result is a net capital gain, enter the amount of that net capital gain on line 3. If the result is a net capital loss, 
enter the amount of that net capital loss on line 4 as a positive number. 

Lines 5 through 7. Available Capital Loss Carryovers – Compute the available non-sharable and sharable capital 
loss carryovers using the worksheets in Parts II, III, and IV. See the instructions for Parts II, III, and IV. 

Line 8. Net Capital Gain from Separate Entity Items – The amount on line 8 represents the total net capital gain 
included on Form N on the appropriate line or lines corresponding to the type of income. If the net capital gain is 
attributable to more than one type of income on Form N, allocate the net capital gain to the types of income which 
generated the net capital gain, in proportion to the total capital gain attributable to each type of income. 

IC-544 (R. 12-23)                                  2 

                                             2023 Form 6CL Instructions 
 
 NOTE: If the net capital gain on line 8 is attributable to amounts reportable in Part II of Form N, include the net 
 capital gain in the pre-apportioned amount. 
                                                                                                                           
If there is an amount on line 8, note the following ordering rules regarding capital loss carryovers: 
•    The current year net capital loss reported on line 2 is considered used before the capital loss carryovers reported 
 on line 7. 
•    If capital loss carryovers from line 7 were used, they are considered used in the order incurred. If both sharable 
 and non-sharable carryovers were incurred in the same taxable year, the amount used from each type is deter-
 mined on a pro rata basis according to each type available from that year.    

Line 9a.  Available Carryovers After Applying Capital Gain from Separate Entity Items – If the reported current 
year net capital gain from separate entity items on line 3, subtract that amount from the available capital loss carryo-
vers reported on line 7. Line 9a represents the total remaining capital loss carryovers after applying them against 
current year net capital gains from separate entity items. 

Line 9b.  Available Carryovers After Applying Capital Loss from Separate Entity Items – If there is a current 
year net capital loss from separate entity items reported on line 4, add that amount to the available capital loss 
carryovers reported in line 7. Line 9b represents the total available capital loss carryovers, including current year net 
capital losses from separate entity items. 

Line 9c. Additional Capital Loss Applied –   The lesser of line 9a and line 1 represents the total amount of non-
sharable and sharable capital loss amounts to be applied against the corporation’s share of the combined group’s 
net capital gain. If this amount includes both current year net capital loss from line 4 and non-sharable/sharable 
capital loss carryovers from line 7, the current year net capital loss is considered used before the capital loss carryo-
vers.  The amount reported on line 9c should be used when updating the non-sharable and sharable capital loss 
carry forward tables since this is the amount of capital loss carry forwards being used up. 

Line 9d. Member’s Share of Net Capital Gain Included in Combined Unitary Income – On line 9d, enter the 
percentage of the group’s aggregate net capital gain from Form 6, Part I, line 30 that represents the amount included 
in the corporation’s Wisconsin income. For corporations that are members of groups that use apportionment, this is 
the percentage reported on Form 6, Part III, line 1d.  

For corporations that are in groups that do business only in Wisconsin (“100% Wisconsin groups”), compute this 
percentage based on the corporations’ relative shares of combined unitary income. For members of 100% Wisconsin 
groups, the corporation’s share of combined unitary income is the sum of the amounts on Form 6, Part III, lines 2 and 
3. The following example illustrates this computation:  

Example for Members of 100% Wisconsin Groups:           Combined Group JKLM consists of Member J, Member K, 
Member L, and Member M. The members’ amounts on Form 6, Part III, lines 2 (Share of Combined Unitary Income) 
and 3 (Adjustment for Current Year Loss Offset) are as follows:  

                  __J__                      __K__                      __L__  __M__ 
      Line 2      20,000                     30,000                     -8,000 -17,000 
      Line 3      -10,000                    -15,000                    8,000  17,000 
                  $10,000                    $15,000                    $0                  $0 

Assume that on Form 6, Part I line 30, the combined group computed an aggregate net capital gain of $5,000, and 
that Member J and Member K both have non-sharable capital loss carryovers.  

The percentage that Member J enters on line 9d of Form 6CL is 40% (= $10,000/$25,000)). The percentage that 
Member K enters on line 9d is 60% (= $15,000/$25,000). Members L and M do not complete Form 6CL since they 
do not have a share of the group’s combined unitary income and thus do not have a share of the aggregate net capital 
gain. 

IC-544 (R. 12-23)                                       3 

                                               2023 Form 6CL Instructions 
 
Parts II, III, and IV: Carryovers Available 

Part II determines the amount on Part I, line 5. Parts III and IV determine the amount on Part I, line 6. 
 
Part II. Non-Sharable Capital Loss Carryovers – Complete columns (a) through (d) as instructed on the form and 
enter the total from column (d) on Part I, line 5.  

Part III. Sharable Capital Loss Carryovers –Complete columns (a) through (d) of Part III as instructed on the form. 
In order to complete column (e) complete Part IV to ensure that sharable loss carryovers are not double-counted. In 
column (f) subtract the column (e) amounts from the column (d) amounts as instructed. Enter the total from column 
(f) on Form 6CL, Part I, line 6.  

Part IV. Sharable Capital Loss Carryovers – Do not complete Part IV unless columns (a) through (d) of Part III are 
completed. The purpose of Part IV is to compute the amount of sharable loss carryovers the corporation already used 
in the combined group’s aggregate computation for the taxable year, so that this amount is not used again in compu-
ting additional loss allowable on Form 6CL.  

Complete lines 1 through 5 of Part IV as instructed on the form and apply the total from line 5 to the available sharable 
carryovers in Part III, column (d), using the oldest carryovers first. In Part III, column (e), enter the amounts applied 
from line 5 on the lines corresponding to the appropriate years. 

Additional Information and Assistance 

Web Resources  

The Department of Revenue’s web page, available at  revenue.wi.gov, has a number of resources to provide addi-
tional information and assistance, including: 

• Forms  
• Common questions  
• Publications  
• The Wisconsin Tax Bulletin        
• A home page specifically for combined reporting topics 
• Links to the Wisconsin Statutes and Administrative Code 

For questions that do not relate to combined reporting, the web page also has a library of frequently asked questions 
on general business tax topics, available at:  revenue.wi.gov/Pages/FAQS/home.aspx 

Contact Information. If you cannot find the answer to your question in the resources available on the Department 
of Revenue’s web page, contact the Department using any of the following methods: 

• E-mail your question to:  DORFranchise@wisconsin.gov 
• Call (608) 266-2772 (Telephone help is also available using TTY equipment. Call the Wisconsin Telecommuni-
  cations Relay System at 711 or, if no answer, (800) 947-3529. These numbers are to be used only when calling 
  with TTY equipment.) 
• Send a fax to (608) 267-0834 
• Write to the Audit Bureau, Wisconsin Department of Revenue, Mail Stop 3-107, PO Box 8906, Madison, WI  
  53708-8906 

                                    Applicable Laws and Rules 
  This document provides statements or interpretations of the following laws and regulations enacted as of 
  the revised date: Chapter 71 Wis. Stats., and Chapter Tax 2, Wis. Adm. Code 

IC-544 (R. 12-23)                                   4