Form 720s - Kentucky S Corporation Income And License Tax Return - 1998 Page 3
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3Form 720S (1998)
Page 3
SCHEDULE K—SHAREHOLDERS' SHARES OF INCOME, CREDITS, DEDUCTIONS, ETC. (See Specific Instructions for Each Line Item)
SECTION I
(a) Pro Rata Share Items
(b) Total Amount
Income (Loss) and Deductions
1. Ordinary income (loss) from trade or business activities (page 1, line 7) ..................................................
1
2. Net income (loss) from rental real estate activities (attach federal Form 8825) ........................................
2
3. (a) Gross income from other rental activities ...................................................... 3(a)
(b) Less expenses (attach schedule) ..................................................................... (b)
(c) Net income (loss) from other rental activities ....................................................................................... (c)
4. Portfolio income (loss):
(a) Interest income ........................................................................................................................................ 4(a)
(b) Dividend income ......................................................................................................................................
(b)
(c) Royalty income ........................................................................................................................................
(c)
(d) Net short-term capital gain (loss) (attach federal Schedule D (Form 1120S)) ...................................
(d)
(e) Net long-term capital gain (loss) (attach federal Schedule D (Form 1120S)) .....................................
(e)
(f)
Other portfolio income (loss) (attach schedule) ...................................................................................
(f)
5. Net gain (loss) under Section 1231 (other than due to casualty or theft) (attach federal Form 4797) .....
5
6. Other income (loss) (attach schedule) ............................................................................................................
6
7. Charitable contributions (attach schedule) and housing for homeless deduction (attach Schedule HH)
7
8. Section 179 expense deduction (attach federal Form 4562) ........................................................................
8
9. Deductions related to portfolio income (loss) (attach schedule) .................................................................
9
10. Other deductions (attach schedule) ................................................................................................................ 10
Investment Interest
11. (a) Interest expense on investment debts .................................................................................................. 11(a)
(b) (1) Investment income included on lines 4(a), 4(b), 4(c) and 4(f) above ......................................... (b)(1)
(2) Investment expenses included on line 9 above ...........................................................................
(2)
Credits
12. Kentucky Unemployment Tax Credit (attach Schedule UTC) ......................................................................
12
13. Recycling and Composting Equipment Tax Credit (attach approved Schedule RC) .................................. 13
Other Items
14. (a) Type of Section 59(e)(2) expenditures
14(a)
(b) Amount of Section 59(e)(2) expenditures ............................................................................................
(b)
15. Tax-exempt interest income ............................................................................................................................ 15
16. Other tax-exempt income ................................................................................................................................ 16
17. Nondeductible expenses ................................................................................................................................. 17
18. Total property distributions (including cash) other than dividends reported on line 20 below ............... 18
19. Other items and amounts required to be reported separately to shareholders (attach schedule) ........... 19
20. Total dividend distributions paid from accumulated earnings and profits ................................................. 20
SECTION II—Computation of Nonresident Shareholders' Taxable Percentage
1. S corporation's Kentucky gross receipts ........................................................................................................
1
2. S corporation's total gross receipts ................................................................................................................
2
3. Nonresident shareholders' taxable percentage (line 1 divided by line 2) ...................................................
3
%
SCHEDULE K INSTRUCTIONS
General Instructions—Schedule K, Form 720S, is a summary
shareholder does not materially participate and any rental ac-
schedule of all the shareholders' shares of the S corporation's
tivity even if the shareholder materially participates. The pas-
income, deductions, credits, etc. Shareholders are liable for in-
sive activity rules provide that losses from passive activities can
come tax on their share of the corporation’s income (reduced
generally be applied only against income from passive activi-
by any federal tax paid by the S corporation on the income).
ties. Thus, passive losses cannot be applied against income from
Complete all applicable lines entering the total pro rata share
salaries, wages, professional fees, or a business in which the
amount for each item listed. Federal instructions for Form 1120S
shareholder materially participates; or against portfolio income.
and federal Schedule K provide additional information which
Generally, portfolio income includes all gross income, other than
will assist the S corporation in completing Schedule K, Form
income derived in the ordinary and regular course of a trade or
720S.
business, that is attributable to interest; dividends; royalties; in-
come from a real estate investment trust, a regulated invest-
Passive Activity Limitations—IRC Section 469 provides for limi-
ment company, a real estate mortgage investment conduit, a
tations on losses and deductions that shareholders may claim
common trust fund, a controlled foreign corporation, a quali-
from "passive activities." The limitations apply to the share-
fied electing fund, or a cooperative; income from the disposi-
holders of the S corporation and not the S corporation itself.
tion of property that produces income of a type defined as
Generally, a passive activity is any activity of the S corporation
portfolio income; and income from the disposition of property
which involves the conduct of any trade or business in which a
held for investment.
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