Instructions - Form 741 Kentucky Fiduciary Income Tax Return printable pdf download

INSTRUCTIONS—FORM 741

42A741(I)

10-98

KENTUCKY FIDUCIARY INCOME TAX RETURN

WHO MUST FILE

BENEFICIARIES’ SHARES OF INCOME AND

DEDUCTIONS

Every fiduciary must file a return for the following even

though all income may be distributed or distributable:

Each beneficiary’s share of income, deductions,

(1) every estate with gross income for the taxable year

credits, etc., must be reported on a separate Schedule

of $1,200 or over; (2) every trust with gross income for

K-1 (Form 741) and filed with Form 741. A copy must be

the taxable year of $100 or over.

given to the beneficiary and a copy retained by the

fiduciary.

WHEN AND WHERE TO FILE

The income distributed or distributable to beneficiaries

Taxpayers must file within three months and 15 days

is the amount on page 1, Line 18. Each beneficiary is

after the close of their taxable year.

required to include the distributed or distributable

share of income, as shown on Schedule K-1, on the

Mail the return to the Kentucky Revenue Cabinet,

individual income tax return. The name and

Frankfort, KY 40618-0006.

identification number of each beneficiary should be

entered as it appears on the individual return.

FIDUCIARY INCOME

Generally, federal rules and regulations apply but

Kentucky income tax law is based on the federal

amounts reported may be different due to differences in

income tax law in effect on December 31, 1997. The

Kentucky and federal laws, i.e., statutorily exempt

Revenue Cabinet generally follows the administrative

income, U.S. government bonds, municipal interest, etc.

regulations and rulings of the Internal Revenue Service

in those areas where no specific Kentucky law exists.

FEDERAL ESTATE TAX DEDUCTION

Kentucky law requires taxpayers to report income on

the same calendar or fiscal year and to use the same

Refer to federal Form 1041 for the definition of the

methods of accounting as required for federal income

federal estate tax deduction.

tax purposes. See Form 740 instructions or contact the

Revenue Cabinet for more information.

The federal estate tax deduction does not include

fiduciary income tax paid on federal Form 1041. A copy

All taxable income received by the fiduciary must be

of the computation for the deduction must be attached

reported on Lines 1 through 8, page 1, and the

to Form 741.

applicable schedules completed on page 2. Use

Kentucky amounts for reporting all income and

NONRESIDENT BENEFICIARIES

deductions.

A nonresident beneficiary is subject to tax only on

Pension Income Exclusion—The amount of the pen-

income received from real or tangible personal

sion income exclusion has been increased to $35,000

property located in Kentucky. If the income is

for 1998. You may exclude the amount of pension in-

distributed or distributable to a nonresident benefi-

come or $35,000, whichever is less. Reduce the amount

ciary, complete Schedule K-1 (Form 741).

of pension or retirement income reported on line 8 by

the exclusion amount. Refer to Schedule P for addi-

TAX COMPUTATION

tional information if the pension income is more than

$35,000 and is from a retirement system of the federal

Any tax shown to be due in the computation of tax on

government, Commonwealth of Kentucky or a Ken-

page 1 of the return must be paid in full at time of filing.

tucky local government.

Attach check payable to the Kentucky State Treasurer.

If the fiduciary has business income (loss) or farm

To claim credit(s) from Schedule UTC, Unemployment

income (loss), complete and attach federal Schedule C,

Tax Credit, and/or Schedule RC, Application for

C-EZ or F, using Kentucky amounts.

Income Tax Credit for Recycling and/or Composting

Equipment, add the credit to the amount on Line 31 and

ADMINISTRATION EXPENSES (KRS 140.090(h))

identify as "UTC or RC credit."

In the case of a decedent’s estate, if the election was

Enter on Line 31 all estimated tax payments, credit

made not to deduct costs of administration, including

from the previous year’s return and/or extension

attorney’s fees actually allowed and paid, on a

payments.

Kentucky inheritance tax return (92A101, 92A120,

92A120-S, 92A120-X), these expenses may be

Also, if Kentucky income tax was erroneously withheld

deducted on Form 741. A statement waiving the right

on income in respect of a decedent, attach a copy of the

to deduct these expenses for inheritance tax purposes

wage and tax statement of the deceased to Form 741.

must also be filed with Form 741.

Enter on Line 31 the amount of withholding.

Instructions - Form 741 Kentucky Fiduciary Income Tax Return

Related Articles

Related forms

Related Categories