Wisconsin starts from your federal adjusted gross income, so a capital gain is part of your Wisconsin income. What sets the state apart is a built-in break for long-term gains: the Department of Revenue lets you exclude 30% of the net gain from assets held more than one year, and 60% for farm assets. Short-term gains are taxed in full at the regular income tax rates.
This guide uses the Department's 2025 Schedule WD instructions and its Publication 103 on capital gains (both written for 2025 returns; they are the latest exclusion rules the Department has published), its 2026 Form 1-ES instructions for the 2026 rate schedule, its Tax Rates page and two IRS pages, all read in November 2026. We did not find a 2026 version of Schedule WD or Publication 103 yet, so check the Department before filing a 2026 return.
Publication 103 says federal adjusted gross income is the starting point for computing Wisconsin taxable income, and the Schedule WD instructions say that generally all amounts reported on your federal Schedule D must be reported on Schedule WD. You then work out the Wisconsin amount on Schedule WD. The gain is taxed with your other income at the regular rates; Wisconsin has no separate capital gains rate on the pages we read.
Federal and Wisconsin treatment differ. The IRS (Topic 409) says that if you have a net capital gain, a lower tax rate may apply to the gain than the rate on your ordinary income. Wisconsin takes a different route: instead of a lower rate, it excludes part of a long-term gain from income.
The Schedule WD instructions say that for Wisconsin you may exclude 30% of the net capital gain from assets held more than one year, and 60% in the case of farm assets. Publication 103 defines long-term as owned for more than one year; an asset held for one year or less is short-term and the exclusion does not apply to it.
The instructions say sixty percent of net long-term gain from the sale of farm assets may be excluded, and that farm assets means livestock, farm equipment, farm real property and farm depreciable property. Individuals complete Schedule WD, and Form 1 filers carry the result to Schedule AD or Schedule SB.
If your only Wisconsin capital gain is a capital gain distribution from a mutual fund or real estate investment trust and you file Form 1, you do not have to complete Schedule WD; the instructions point to the line 5 instructions of Schedule SB for claiming the exclusion on part of the distribution. Form 1NPR filers must still complete Schedule WD.
The Department's Tax Rates page says Wisconsin individual income tax rates vary from 3.50% to 7.65%, depending upon marital status and income. For single filers (and heads of household, estates and trusts), Schedule A of the Department's 2026 Form 1-ES instructions is:
| Taxable income over | Not over | 2026 tax is |
|---|---|---|
| $0 | $15,110 | 3.5% |
| $15,110 | $51,950 | $528.85 + 4.4% of the amount over $15,110 |
| $51,950 | $332,720 | $2,149.81 + 5.3% of the amount over $51,950 |
| $332,720 | no limit | $17,030.62 + 7.65% of the amount over $332,720 |
For comparison, the 2025 single schedule on the Tax Rates page has the same rates with lower brackets: 3.50% to $14,680, 4.4% to $50,480, 5.3% to $323,290 and 7.65% above. The Department also publishes separate schedules for married couples filing jointly and married filing separately; see the sources below.
This example is ours, not the Department's. It uses the 2026 single schedule above and assumes a single filer has $60,000 of Wisconsin taxable income before the gain and then sells an asset held more than a year for a $50,000 gain. The exclusion is $15,000, so $35,000 of the gain is added to income. Tax on $60,000 is about $2,576; on $95,000 it is about $4,431, so the gain adds about $1,855. If the same gain were short-term, all $50,000 would be added and the tax would rise by about $2,650.
| Long-term gain | Added to income after 30% exclusion | Extra Wisconsin tax (long-term) | Extra tax if short-term | Difference |
|---|---|---|---|---|
| $10,000 | $7,000 | $371 | $530 | $159 |
| $50,000 | $35,000 | $1,855 | $2,650 | $795 |
| $100,000 | $70,000 | $3,710 | $5,300 | $1,590 |
| $500,000 | $350,000 | $20,366 | $31,841 | $11,475 |
We ignore deductions, credits and the federal side, and the table assumes the whole gain is eligible for the 30% exclusion. Your own return will differ.
The Schedule WD instructions say nonresidents should include only gain or loss from Wisconsin sources, and part-year residents should include gain or loss from all sources while a Wisconsin resident plus gain or loss from Wisconsin sources while a nonresident. Wisconsin sources include gain or loss from the sale of land, buildings and machinery located in Wisconsin. The Tax Rates page adds that nonresidents and part-year residents must prorate the tax based on the ratio of their Wisconsin income to their federal adjusted gross income.
Publication 103 also says Wisconsin law does not permit the deduction of capital losses incurred prior to the date Wisconsin residence is established.
The instructions say the net capital loss that can be applied against other income after offsetting capital gains is limited to $3,000 ($1,500 if married and not filing a joint return), and unused capital losses are carried over to later years until fully used.
Publication 103 describes several narrower rules. Long-term gain on the sale of an investment in a qualified Wisconsin business held at least five uninterrupted years may qualify to be excluded (Schedule QI). A long-term gain may be deferred if you invest it in a qualified Wisconsin business within 180 days (Schedule CG). Wisconsin also provides a subtraction for an investment in a Wisconsin qualified opportunity fund, in addition to the federal exclusion. The federal exclusion for qualified small business stock sold after December 31, 2018 also applies for Wisconsin. Each has conditions we have not summarised; use the Department's forms and instructions.
The IRS says (Topic 701) you may qualify to exclude up to $250,000 of gain from your income on the sale of your main home, or up to $500,000 if you file a joint return with your spouse. We did not find a Wisconsin page that restates this exclusion, so confirm your case with the Department.
CountryTaxCalc.com is reader-supported. When you use our partner links, we may earn a commission at no cost to you. This helps us provide free tax calculators and comparison tools.Learn more about our affiliate partnerships
★ 4.8verified reviews · 3,758 reviews
Moving between states means a complex multi-state tax return. Taxhub matches you with a real CPA via video call — average cost $325. Rated 4.8★ by 3,700+ clients.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a CPA →Interested in reaching this audience? Advertise on CountryTaxCalc →