“Adjusted basis” of a liability or reserve account created by accruals or other charges deducted from income for federal or Wisconsin income tax purposes is the current balance of such account on the transitional date.

“Changing basis assets” means inventories and assets or accounts, including liability and reserve accounts created by accruals or other charges deducted from income, other than annuity contracts or constant basis assets. “Changing basis assets” include property subject to depreciation, depletion or amortization of cost, premium or discount; capitalized intangible expenses such as trademark expense, research and development expense and loan expense if the same are being amortized for federal income tax purposes; and accruals, reserves and deferrals of either income or expense.

“Constant basis assets” means assets, other than inventories, the federal adjusted basis of which does not affect and is not affected by the computation of the taxpayer’s federal taxable income except when such asset is sold, exchanged, abandoned or otherwise disposed of.

“Federal adjusted basis” means the adjusted basis of the asset or account for the purpose of determining gain on the sale or other disposition thereof computed as of the transitional date for federal income tax purposes.

“Owner” means successively the owner of changing basis assets or constant basis assets as of the transitional date and any subsequent owner whose basis for such assets is found by reference to the basis therefor of another person.

“Transitional date” means the first day of the taxpayer’s 1965 taxable year.

“Wisconsin adjusted basis” means the adjusted basis of the asset or account which would have been applicable in determining gain on the sale or other disposition thereof on the day preceding the transitional date.