COFFEY, J.
This is a review of a decision of the court of appeals1 affirming an order of the circuit court dismissing the petition of the Wisconsin Department of Revenue (Department) to set aside a decision and order of the Wisconsin Tax Appeals Commission (WTAC). The WTAC had granted Romain A. Howick’s (taxpayer) petition for abatement of the Department’s assessment of additional income taxes for the years 1970 through 1973, inclusive.
This controversy involves the Department’s treatment of loss on the sale of corporate stock for income tax purposes when stock is sold by a Wisconsin resident who purchased it while a resident of the state of Iowa.
The taxpayer moved to Wisconsin on June 20, 1970, and immediately thereafter divested himself of certain shares of stock that he acquired while a nonresident. As a result of the stock sold in Wisconsin in 1970, he suffered a $10,043.82 loss, having purchased the same for $56,436.42. Thus, he reported the difference between $56,436.42 and the sale price of $46,392.60 or $10,043.82 on his 1970 federal income tax return as a net long-term capital loss. Howick also reported this loss on his 1970 Wisconsin tax return and deducted $1,000 each year [276]*276thereafter from ordinary income through 1972 (3 years).2
In 1973 Howick divested himself of more stock he acquired while a resident of Iowa. He purchased this stock for $13,317.40 and suffered a $4,875.57 loss at the time of sale. The taxpayer combined this 1973 loss ($4,875.57) with the balance of a loss carry over from 1970 and thus offset a long-term gain realized from other 1973 stock transactions. This netting process (offsetting long-term gains by long-term losses see: I.R.C. §1222) yielded a $516.10 loss that the taxpayer deducted from ordinary income in 1973.
On October 6, 1975, the Department of Revenue made an additional income tax assessment against Howick in the amount of $978.96 plus interest.3 The Department audited Howick and determined that he had erred in calculating his losses for the years 1970 and 1973 for sales of stock acquired while he was a nonresident. The Department’s determination was based on the following administrative rule set forth in a Revenue Department Memorandum dated April 1,1966:4
■ in determining the gain or loss on capital assets disposed of by a resident individual who had acquired such assets prior to the time such individual became a Wisconsin resident, the basis of the asset to be used would be: (1) if gain is realized, the difference between the selling price and the higher of the fair market value or the adjusted basis of the asset at the time Wisconsin [277]*277residency was established, or (2) if a loss was sustained, the difference between the selling price and the lower of the fair market value or adjusted cost basis of the asset at the time Wisconsin residency was established. If no gain is determined under (1) and no loss determined under (2), no gain or loss would be reportable on the Wisconsin income tax return in the year of sale.” See: Vol. 1, Wisconsin Tax Rep. (CCH) ¶10-414.20.
In essence, this rule provides for an adjustment in some circumstances to the federal cost basis of a capital asset (corporate stock). If applicable, the adjustment is based on the value of the asset on the date the taxpayer established residence in Wisconsin. Its net effect is to minimize both gains and losses recognized on the sale of stock purchased before the taxpayer became a resident of this state. Only subsec. two (2) of the Revenue Department’s Memorandum dated April 1, 1966, referred to above, is involved in this case.5 The Department explained its application of this rule to the taxpayer herein as follows:
“1. If the selling price after moving into Wisconsin was less than the original cost of the stock when purchased out of state and its fair market value on June 20, 1970, when the taxpayer first moved into Wisconsin, the loss recognized was the difference between the selling price and the lesser of either the original cost or its fair market value.” Pet.-App’s. br. at 7.
Thus, the application of the rule substitutes a fictitious basis for the cost of the asset, if the substitution will result in reducing the amount of the loss that the taxpayer is entitled to recognize on the sale of the asset.
The Department applied this rule to each of the taxpayer’s stock sales in 1970 and 1973. As a result, the Department reduced Howick’s reported net long-term loss for the 1970 stock transactions from $10,043.82 to [278]*278$596.806 and converted the $4,875.57 loss realized on the 1973 stock sales he acquired while a nonresident to a $123.18 gain.7 The Department disallowed the loss deductions from ordinary income in 1971 through 1973 and a portion of the loss offset for 1973 as well as $403.20 of the loss deduction taken in 1970. Therefore, the De[279]*279partment assessed the additional income taxes noted above.8
On November 8, 1975, Howick appealed to the WTAC for abatement of the Department’s income tax assessment against him. The WTAC granted the taxpayer’s application stating “The [Department’s] assessment. . . under review has the ultimate effect of creating an artificial gain where a loss was actually incurred. We can find no statuttory or case law that authorizes such a transformation [creating a gain from a loss] and thus must reject it.” The Department’s application for a rehearing was denied and it petitioned the circuit court for review of the WTAC’s decision, pursuant to secs. 73.015(2) and 227.16, Stats.9 The circuit court dismissed the Department’s petition stating that it was unaware of any Wisconsin law supporting the Department’s action and that this application of the Department’s rule “. . . is in danger of being contrary to the Constitutional rights of the taxpayer under the XIV Amendment to the U. S. Constitution to equal protection of the laws. It is obvious that the application of the Department’s theory could result in tremendous difference of tax liability upon identical Wisconsin taxpayer transactions if everything else were identical except that one was a nonresident of the state at the time of acquisition of the property sold.”'10
The court of appeals affirmed the circuit court’s decision upholding the action of WTAC in ruling that it could find no authority in the Wisconsin Statutes or case law [280]*280for the Revenue Department’s rule that had the “ultimate effect” of creating an artificial gain where a loss was actually incurred. We granted the Department’s petition for review of the appellate court’s decision.
Issue
Did the Department exceed its rule making power set forth in sec. 71.11 (24) (a), Stats., in establishing an administrative rule that provides for an adjustment to the basis of stock, in calculating a loss on the sale thereof where the taxpayer acquired the stock while a resident of another state, so as to reduce the loss to reflect a decrease in the value of the stock during the time the taxpayer resided out of state?
The legislature has delegated broad but not unqualified rule making powers to the Department of Revenue for the purposes of administering the Wisconsin income tax law.
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COFFEY, J.
This is a review of a decision of the court of appeals1 affirming an order of the circuit court dismissing the petition of the Wisconsin Department of Revenue (Department) to set aside a decision and order of the Wisconsin Tax Appeals Commission (WTAC). The WTAC had granted Romain A. Howick’s (taxpayer) petition for abatement of the Department’s assessment of additional income taxes for the years 1970 through 1973, inclusive.
This controversy involves the Department’s treatment of loss on the sale of corporate stock for income tax purposes when stock is sold by a Wisconsin resident who purchased it while a resident of the state of Iowa.
The taxpayer moved to Wisconsin on June 20, 1970, and immediately thereafter divested himself of certain shares of stock that he acquired while a nonresident. As a result of the stock sold in Wisconsin in 1970, he suffered a $10,043.82 loss, having purchased the same for $56,436.42. Thus, he reported the difference between $56,436.42 and the sale price of $46,392.60 or $10,043.82 on his 1970 federal income tax return as a net long-term capital loss. Howick also reported this loss on his 1970 Wisconsin tax return and deducted $1,000 each year [276]*276thereafter from ordinary income through 1972 (3 years).2
In 1973 Howick divested himself of more stock he acquired while a resident of Iowa. He purchased this stock for $13,317.40 and suffered a $4,875.57 loss at the time of sale. The taxpayer combined this 1973 loss ($4,875.57) with the balance of a loss carry over from 1970 and thus offset a long-term gain realized from other 1973 stock transactions. This netting process (offsetting long-term gains by long-term losses see: I.R.C. §1222) yielded a $516.10 loss that the taxpayer deducted from ordinary income in 1973.
On October 6, 1975, the Department of Revenue made an additional income tax assessment against Howick in the amount of $978.96 plus interest.3 The Department audited Howick and determined that he had erred in calculating his losses for the years 1970 and 1973 for sales of stock acquired while he was a nonresident. The Department’s determination was based on the following administrative rule set forth in a Revenue Department Memorandum dated April 1,1966:4
■ in determining the gain or loss on capital assets disposed of by a resident individual who had acquired such assets prior to the time such individual became a Wisconsin resident, the basis of the asset to be used would be: (1) if gain is realized, the difference between the selling price and the higher of the fair market value or the adjusted basis of the asset at the time Wisconsin [277]*277residency was established, or (2) if a loss was sustained, the difference between the selling price and the lower of the fair market value or adjusted cost basis of the asset at the time Wisconsin residency was established. If no gain is determined under (1) and no loss determined under (2), no gain or loss would be reportable on the Wisconsin income tax return in the year of sale.” See: Vol. 1, Wisconsin Tax Rep. (CCH) ¶10-414.20.
In essence, this rule provides for an adjustment in some circumstances to the federal cost basis of a capital asset (corporate stock). If applicable, the adjustment is based on the value of the asset on the date the taxpayer established residence in Wisconsin. Its net effect is to minimize both gains and losses recognized on the sale of stock purchased before the taxpayer became a resident of this state. Only subsec. two (2) of the Revenue Department’s Memorandum dated April 1, 1966, referred to above, is involved in this case.5 The Department explained its application of this rule to the taxpayer herein as follows:
“1. If the selling price after moving into Wisconsin was less than the original cost of the stock when purchased out of state and its fair market value on June 20, 1970, when the taxpayer first moved into Wisconsin, the loss recognized was the difference between the selling price and the lesser of either the original cost or its fair market value.” Pet.-App’s. br. at 7.
Thus, the application of the rule substitutes a fictitious basis for the cost of the asset, if the substitution will result in reducing the amount of the loss that the taxpayer is entitled to recognize on the sale of the asset.
The Department applied this rule to each of the taxpayer’s stock sales in 1970 and 1973. As a result, the Department reduced Howick’s reported net long-term loss for the 1970 stock transactions from $10,043.82 to [278]*278$596.806 and converted the $4,875.57 loss realized on the 1973 stock sales he acquired while a nonresident to a $123.18 gain.7 The Department disallowed the loss deductions from ordinary income in 1971 through 1973 and a portion of the loss offset for 1973 as well as $403.20 of the loss deduction taken in 1970. Therefore, the De[279]*279partment assessed the additional income taxes noted above.8
On November 8, 1975, Howick appealed to the WTAC for abatement of the Department’s income tax assessment against him. The WTAC granted the taxpayer’s application stating “The [Department’s] assessment. . . under review has the ultimate effect of creating an artificial gain where a loss was actually incurred. We can find no statuttory or case law that authorizes such a transformation [creating a gain from a loss] and thus must reject it.” The Department’s application for a rehearing was denied and it petitioned the circuit court for review of the WTAC’s decision, pursuant to secs. 73.015(2) and 227.16, Stats.9 The circuit court dismissed the Department’s petition stating that it was unaware of any Wisconsin law supporting the Department’s action and that this application of the Department’s rule “. . . is in danger of being contrary to the Constitutional rights of the taxpayer under the XIV Amendment to the U. S. Constitution to equal protection of the laws. It is obvious that the application of the Department’s theory could result in tremendous difference of tax liability upon identical Wisconsin taxpayer transactions if everything else were identical except that one was a nonresident of the state at the time of acquisition of the property sold.”'10
The court of appeals affirmed the circuit court’s decision upholding the action of WTAC in ruling that it could find no authority in the Wisconsin Statutes or case law [280]*280for the Revenue Department’s rule that had the “ultimate effect” of creating an artificial gain where a loss was actually incurred. We granted the Department’s petition for review of the appellate court’s decision.
Issue
Did the Department exceed its rule making power set forth in sec. 71.11 (24) (a), Stats., in establishing an administrative rule that provides for an adjustment to the basis of stock, in calculating a loss on the sale thereof where the taxpayer acquired the stock while a resident of another state, so as to reduce the loss to reflect a decrease in the value of the stock during the time the taxpayer resided out of state?
The legislature has delegated broad but not unqualified rule making powers to the Department of Revenue for the purposes of administering the Wisconsin income tax law. The Department’s rule making authority is found in sec. 71.11 (24) (a), Stats.,11 which provides:
“The department of revenue may make such rules and regulations as it shall deem necessary in order to carry out this chapter.”
Recognizing that the Department’s rule making power is not unqualified, this court in Plain v. Harder, 268 Wis. 507, 511, 68 N.W.2d 47 (1955), held that the Department cannot adopt a rule which amounts to independent legislation. Id. at 511. Thus:
“An administrative rule, even of long duration, may not stand at variance with an unambiguous statute. State [281]*281ex rel. Irany v. Milwaukee County Civil Service Comm. (1962), 18 Wis.2d 132, 135, 118 N.W.2d 137; Plain v. Harder (1955), 268 Wis. 507, 68 N.W. (2d) 47. In the latter case, at page 511, this court said:
“ ‘The rule-making power does not extend beyond the power to carry into effect the purpose as expressed in the enactment of the legislature. “A rule out of harmony with the statute is a mere nullity” ’ ” (emphasis supplied) Basic Products Corp. v. Department of Taxation, 19 Wis.2d 183, 186, 120 N.W.2d 161 (1963).
We believe that sec. 71.02 (2) (d) and (e), Stats., provide the key to the resolution of this controversy. See. 71.02(2) (d), Stats., defines Wisconsin taxable income for individuals as “. . . Wisconsin adjusted gross income less itemized deductions or less the Wisconsin standard deduction.” Wisconsin adjusted gross income means “. . . federal adjusted gross income, with the modifications prescribed in s. 71.05(1) and (4).” Sec. 71.02(2) (e), Stats. Thus, we must determine: (1) how federal adjusted gross income is calculated, and (2) whether any of the sec. 71.05(1) and (4), Stats., modifications are applicable in this case. We turn first to the issue of the computation of “federal adjusted gross income.”
The I.R.C. provides that the income tax basis of stock purchased by the taxpayer is its cost at the time of purchase. See: I.R.C. §§1011, 1012. The gain or loss from the sale of stock is the difference between the amount realized, i.e., selling price, and the taxpayer’s cost. I.R.C. §1001. Net long-term loss is computed by subtracting the long-term gains for the taxable year from the long-term losses. I.R.C. §1222(8). Given that Howick calculated the long-term losses resulting from his stock transactions for the years 1970 and 1973 according to these rules, and that the Department does not contest the taxpayer’s federal calculations, the question becomes whether the Wisconsin income tax statutes, specifically sec. 71.05(1) and (4), permit the Revenue [282]*282Department to modify and alter Howick’s federal adjusted gross income for taxing purposes by reducing the basis of the stock acquired before he became a resident.
The Department, in support of their rule, claims that it is authorized by sec. 71.05(1) (a) 8 and 71.07(1), Stats. Sec. 71.05(1) (a) 3, Stats., allows for an addition modification to the taxpayer’s federal adjusted gross income where he suffers a loss under the federal income tax provisions that is not allocable or apportionable to Wisconsin under the situs of income rules contained in sec. 71.07, Stats. Thus, we must look to sec. 71.07, Stats., to determine whether this statute provides for a basis reduction of the nature accomplished by the Department’s rule.
The Department is in essence claiming that where stock acquired in another state is sold at a loss in this state the decrease in the value of stock while the taxpayer is a resident of another state is not apportionable to this state. It contends that the portion of sec. 71.07(1), Stats., which provides that loss derived from the sale of stock shall follow the residence of the recipient supports its claim. The question here is whether sec. 71.07(1), Stats., is an apportionment provision.
Sec. 71.07(1) provides:
“71.07 Situs of income; allocation and apportionment. (1) For the purposes of taxation income or loss from business, not requiring apportionment under sub. (2), (3) or (5), shall follow the situs of the business from which derived. Income or loss derived from rentals and royalties from real estate or tangible personal property, or from the operation of any farm, mine or quarry, or from the sale of real property or tangible personal property shall follow the situs of the property from which derived. Corporation income from personal services performed by employes of corporations shall be deemed business income and shall follow the situs of the business. Income from personal services and from professions, shall follow the [283]*283situs of the services. All other income or loss, including royalties from patents, income or loss derived from land contracts, mortgages, stocks, bonds and securities or from the sale of similar intangible personal property, shall follow the residence of the recipient, except as provided in s. 71.07(7). For the purposes of taxation, interest received on state and federal tax refunds when the tax refunded was on business income or property shall be deemed income from business and shall follow the situs of the business from which derived.” (Emphasis supplied.)
Clearly, the language emphasized in the above quotation indicates that sec. 71.07(1) is a situs of income or loss provision and it does not speak to the question of apportionment of loss. Rather, it refers the reader to different subsections of sec. 71.07(1) for the rules on apportionment, i.e., apportionment of business income or loss is governed by sec. 71.07(2), (3) or (5). Thus, sec. 71.07 (1) does not support the Department’s claim. Indeed, insofar as it provides that the taxpayer’s loss on the sale of stock shall follow his residence, it requires that all loss suffered by Howick on his stock sales be recognized for Wisconsin tax purposes as he was a Wisconsin resident at the time of sale. Of course, the computation of the amount of loss is governed by the federal income tax provisions we have discussed above.
Thus, sec. 71.07, Stats., as the Department recognizes, is the only statute dealing with apportionment of income or loss. Sec. 71.07 (1) governs the tax treatment of stock sales. This statute does not authorize apportionment of any part of a loss sustained on a stock sale to a jurisdiction other than the residence of the taxpayer at the time of sale. Those subsections of sec. 71.07 which do authorize apportionment apply to business income or loss, not income or loss which follows the residence of the recipient. Therefore, we hold that the Department’s [284]*284rule is out of harmony with and contrary to the unambiguous statutory scheme.
The Department further contends that its rule is supported by the reasoning in three of this court’s decisions, to-wit: Appeal of Seisel, 217 Wis. 661, 259 N.W. 839 (1935); Falk v. Wisconsin Tax Comm., 201 Wis. 292, 230 N.W. 64 (1930), and State ex rel. Bundy v. Nygaard, 163 Wis. 307, 158 N.W. 87 (1916).
Appeal of Seisel, supra, and Bundy, supra, are not in point as those cases involved the calculation of a gain from a single transaction, the sale of corporate stock, whereas, in contrast, this case deals with the recognition of a loss arising from multiple transactions engaged in by the taxpayer during the 1970 and 1973 tax years.12 Falk involved sec. 71.02(2) (d), Stats. 1913, which provided in part “. . . for the purpose of ascertaining the gain or loss resulting from the sale ... of property, real or personal, acquired prior to January 1, 1911, the fair market value of such property as of January 1, 1911, shall be the basis for determining the amount of such gain or loss.”
In that case the taxpayer’s decedent13 purchased a number of shares of capital stock before January 1, 1911, the date the Wisconsin income tax law became effective. This stock was purchased at a cost of $471,310 and sold in 1924 for $339,408.96 or a $131,901.04 loss. The Wisconsin Tax Commission found that the value of the stock on January 1, 1911, was $300,000 or $39,408.36 less than the sales price and assessed a tax on the $39,-408.36 figure claiming that it represented a gain realized on the sale. The Commission’s authority for this assess[285]*285ment of additional income taxes was sec. 71.02(2) (d), Stats. 1913.
This court held that the legislature could not levy a tax on the $39,408.36 as it was not income, gain or profit within the common and ordinary meaning of those terms. It stated:
“The term ‘income’ as used in the constitution14 is to be interpreted in accordance with its common, ordinary meaning as understood in every-day life. ‘It must be gain or profit and it must be money or something equivalent thereto.’ State ex rel. Bundy v. Nygaard, 163 Wis. 307, 158 N.W. 87. Income does not arise from the ordinary fluctuations in the value of property. In order for property to give rise to income there must he a sale thereof in excess of its cost. Miller v. Tax Comm., 195 Wis. 219, 217 N.W. 568.” (Emphasis supplied.) Falk, supra at 294-95.
The court reasoned that the taxpayer had suffered an economic loss because the sale price was less than the purchase price and the statute could not be applied so as to convert this economic loss into a fictitious gain for tax purposes. Falk is not applicable, as the case herein does not present the question of whether the economic loss suffered on an individual stock transaction is converted into a fictitious gain by the application of any statutes. Thus, Falk does not support the Department’s rule insofar as it is applicable to the determination of losses at issue in this case.
Although we affirm the decision of the court of appeals, we express a reservation about that opinion. The court of appeals announced a rule that is applicable to the calculation of a gain on the sale of stock acquired while the taxpayer was a nonresident. This case is concerned with the proper treatment of a loss on the sale of such stock, and thus the appellate court’s analysis of [286]*286gains on the sale of such stock is obiter dicta. Therefore, we disavow this analysis and conclude that the dicta does not have any precedential value.
By the Court. — The decision of the court of appeals is affirmed and the order of the circuit court dismissing the Department of Revenue’s petition for review is modified to a judgment affirming the decision and order of the Wisconsin Tax Appeals Commission.