Instructions 2012 Kentucky Corporation Income Tax And Llet Return

Rico, any territory or possession of the United States or any

Line 19—For a mandatory nexus consolidated filer only, enter

foreign country or political subdivision thereof. Attach a

the amount from Schedule NOL (Form 720), Part I, Section A,

schedule itemizing the total taxes deducted on Form 1120. KRS

Line 7 or 8, as applicable. Line 7 is the current net operating

loss disallowed and is added to net income. Enter this amount

141.010(13)(d)

as a positive. Line 8 is the net operating loss carryforward

and is subtracted from net income. Enter this amount as a

Line 4—See instructions on page 3 regarding depreciation and

negative. Separate entity filers enter zero (–0–). If the affiliated

Section 179 deduction differences, and if applicable, include

group includes a member having a NOL carryforward that was

the total of depreciation amounts from Line 20 of Form 1120,

not a member of the affiliated group in the prior year, attach

Form 1125-A and elsewhere on the return. If federal Form 4562

Schedule NOL–CF.

is required to be filed for federal income tax purposes, a copy

must be attached.

Line 20—Add Line 18 and Line 19.

Line 5—Enter deductions attributable to income which is

Line 21—Enter the amount from Line 20 or the amount on

exempt from taxation. Any expense related directly or indirectly

Schedule A, Section II, Line 8, if applicable. A corporation that

to the acquisition, management or disposition of assets, the

is taxable in this state and taxable in another state must allocate

income from which is exempt, is not deductible. Attach a

and apportion income to Kentucky on Schedule A (Form 720),

schedule. KRS 141.010(13)(d) and 103 KAR 16:060

Apportionment and Allocation. See Schedule A instructions

for information on the apportionment fraction. KRS 141.010(14)

Line 6—Enter related party cost additions from Schedule RPC,

and KRS 141.120.

Part II, Section B, Line 1.

Line 22—If the corporation is filing a mandatory nexus

Line 7—Enter the amount of dividend–paid deduction of a

consolidated return, enter zero (–0–). For Kentucky purposes,

captive real estate investment trust. KRS 141.010(13)(d)

the same carryforward provisions allowed by IRC Section 172

are applicable for losses incurred in taxable years beginning

Line 8—Enter the amount of domestic production activities

after December 31, 1979, except that no loss may be carried to

deduction from Form 1120, Line 25. KRS 141.010(13)(d) and

a taxable year beginning before January 1, 1980. The amount

103 KAR 16:310

to be carried forward is the amount of loss determined by KRS

Chapter 141 and, in the case of a multistate corporation, it is the

Line 9—Enter the amount from Schedule O–720, Part I, Line

amount determined after apportionment and allocation. Attach

13.

a schedule showing the computation of the net operating loss

deduction but do not enter more than the corporation's taxable

Line 10— Enter Revenue Agent Report (RAR) (Form 4549)

income. For additional details on carryover rules, see federal

federal taxable income increase(s). Use this line only if

Publication 536, Net Operating Losses. Attach Schedule NOL.

amending Form 720 as a result of an RAR adjustment (attach

KRS 141.050

a copy of Form 4549 to the amended Form 720).

Line 23—Subtract Line 22 from Line 21.

Line 11—Enter the total of Lines 1 through 10.

Line 24—Enter the amount of Kentucky domestic production

Subtractions from Federal Taxable Income—Lines 12 through

activities deduction from Kentucky Form 8903–K, Line 21.

17 itemize items of income which are excluded or additional

deductions allowed which are differences between federal

Line 25—Subtract Line 24 from Line 23.

taxable income and Kentucky taxable net income.

Tax Payment Summary

Line 12—Enter the amount of interest income from U.S.

government bonds or from securities issued by a federal agency

The payment submitted with Form 720 must be itemized.

or other income exempt from state taxation by the Kentucky

Enter the amount of LLET payment from Part I, Line 16 and/

Constitution, the United States Constitution or the United

or corporation income tax payment from Part II, Line 15 on

States Code. Securities which are merely guaranteed by the

the applicable tax payment lines in addition to the respective

U.S. government are not tax-exempt. Attach a schedule listing

amount of penalties and interest. Subtotal each and enter the

the type of obligation and the amount of tax-exempt interest.

total payment on the Total Payment line.

KRS 141.010(12)(a)

✍

Signature—Form 720 must be signed by an authorized

Line 13—Enter the amount of dividend income from Form 1120.

corporate officer. Failure by corporate officers to sign

KRS 141.010(12)(b)

the return, to complete all applicable lines on any required

Kentucky form, to attach all applicable schedules including

Line 14—Enter the amount of the work opportunity credit

copies of federal forms, or to complete all information on the

reflected on federal Form 5884. For Kentucky purposes, the

questionnaire will delay the processing of tax returns and may

corporation may deduct the total amount of salaries and wages

result in the assessment of penalties.

paid or incurred for the taxable year. This adjustment does not

apply for other federal tax credits.

Line 15—See instructions on page 3 regarding depreciation and

Section 179 deduction differences, and if applicable, include

the amount from Line 22 of the Kentucky Form 4562. Kentucky

Form 4562 must be attached.

Line 16—Enter the amount from Schedule O–720, Part II, Line

19.

Line 17—Enter Revenue Agent Report (RAR) (Form 4549) federal

taxable income decrease(s). Use this line only if amending

Form 720 as a result of an RAR adjustment (attach a copy of

Form 4549 to the amended Form 720).

Line 18—Subtract Lines 12 through 17 from Line 11.

Instructions 2012 Kentucky Corporation Income Tax And Llet Return - 2012 Page 10

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