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41A720RC-R (10-08)

Page 2

Commonwealth of Kentucky

DEPARTMENT OF REVENUE

INSTRUCTIONS FOR SCHEDULE RC-R

Kentucky Disposition of Recycling or Composting Equipment

applicable form. Using this information, the partner,

Purpose of Schedule—This schedule is used by taxpayers

member or shareholder will ﬁ le its own Schedule RC-R

that dispose of qualified recycling or composting

based upon its Schedule K-1 and its tax information.

equipment before the end of the recapture period. The

tax credit shall be redetermined under KRS 141.390(5). If

Tax Credit/Recaptured (Corporations, Limited

the redetermined credit exceeds the total credit taken in

Liability Pass-through Entities, Individuals and Sole

prior taxable years, the taxpayer shall be entitled to use

Proprietorships)

the difference to reduce the taxpayer’s tax liability for

Line 8—Enter the amount of credit taken for the property.

the taxable year in which the sale, transfer or disposition

Add the amounts on Line 8 in columns A, B and C and

occurs. It is a nonrefundable credit.

enter on the total line. If the approved credit was for

If the credit previously taken exceeds the redetermined

more than one asset it shall be prorated.

amount, the additional amount is disallowed and shall

Line 9— For a corporation, combine with other recycling

be added to the tax liability in the disposition year. The

credit from Schedule RC and enter the amount on

taxpayer that has taken the credit is responsible for the

Schedule TCS, Columns E and F subject to the limitations

additional liability when the total credit taken in prior

imposed by KRS 141.390. For an S corporation, combine

taxable years exceeds the redetermined credit of the

with other recycling credit from Schedule RC and enter

entity.

the amount on Schedule TCS, Column E subject to the

General Instructions—If the useful life as determined

limitations imposed by KRS 141.390 and on Form 720S,

under Section 168 of the Internal Revenue Code is less

Schedule K, Line 15. For a limited liability pass-through

than ﬁ ve years and the property is disposed of within

entity ﬁ ling Form 725, combine with other recycling

three years of the purchase date or the useful life is ﬁ ve

credit from Schedule RC and enter the amount on

years or more and the property is disposed of within

Schedule TCS, Column E subject to the limitations

ﬁ ve years of the purchase date, the tax credit shall be

imposed by KRS 141.390. For a limited liability pass-

redetermined.

through entity ﬁ ling Form 765, combine with other

Identiﬁ cation Number—For a corporation or a limited

recycling credit from Schedule RC and enter the amount

liability pass-through entity, enter the Kentuck y

on Schedule TCS, Column E subject to the limitations

Corporation/LLET Account Number; a general

imposed by KRS 141.390 and on Form 765, Schedule K,

partnership, enter the FEIN; an individual, enter the

Line 16. For a general partnership, combine with other

Social Security number.

recycling credit from Schedule RC and enter the amount

on Form 765, Schedule K, Line 16. For an individual,

Type of Property—Enter the description of the property

combine with other recycling credit from Schedule RC

disposed. If additional lines are needed attach a

and enter the amount on Form 740 or Form 740-NP , page

schedule.

2, Section A, Line 6.

Useful Life—Check the applicable box for each type of

property.

Line 10—For a corporation, enter this amount on Form

720, Part I, Line 2; and Form 720, Part III, Line 2. There

Recycling or Composting Equipment Tax Credit

is no recapture of the recycling/composting equipment

Line 1—Enter the date the property was purchased. This

credit for LLET purposes if the credit was not taken

is not the date the property was placed in service.

against LLET in a prior year. For an S corporation, enter

Line 2—Enter the date the property was sold, transferred

the amount on Form 720S, Part II, Line 2; and on Form

or otherwise disposed.

720S, Schedule K, Line 33. There is no recapture of

Line 3—Enter the difference in full years between the

the recycling/composting equipment credit for LLET

purchase date and the disposed date.

purposes if the credit was not taken against LLET in a

Line 4—Enter the year the property was approved by the

prior year. For a limited liability pass-through entity

Department of Revenue for the recycling credit.

ﬁ ling Form 725, enter this amount on Form 725, Part II,

Redetermined Amount Computation

Line 2. There is no recapture of the recycling/composting

Line 5—See the table on Schedule RC-R. Enter the

equipment credit for LLET purposes if the credit was not

applicable percentage based on the useful life and

taken against LLET in a prior year. For a limited liability

the number of years in use from Line 3. This percent

pass-through entity ﬁ ling Form 765, enter this amount

represents the percentage of allowable credit.

on Form 765, Part II, Line 2; and on Form 765, Schedule

Line 6—Enter the approved amount. This is the amount

K, Line 33. There is no recapture of the recycling/

from the Schedule RC that was previously approved by

composting equipment credit for LLET purposes if the

the Department of Revenue. See Column F or Column G,

credit was not taken against LLET in a prior year. For a

depending upon the version of the approved schedule.

general partnership, enter this amount on Form 765-GP ,

Schedule K, Line 33. For an individual, enter this amount

Line 7—Add the amounts on Line 7 in columns A, B and

on Form 740, page 1, Line 13; or on Form 740-NP , combine

C and enter on the total line.

with the tax to be entered on page 1, Line 14.

Caution: If the additional credit allowed or credit

recaptured is taken at the partner, member or

Information Purposes—Line 11 is the amount of credit

shareholder level, enter the total on Schedule K of the

lost due to the disposition.

Form 41a720rc-R - Schedule Rc-R Disposition Of Recycling Or Composting Equipment Schedule Page 2

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