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Principal Business Activity in KY—Enter the entity’s principal

adjusted to reflect differences in federal and Kentucky tax laws,

business activity in Kentucky.

such as depreciation. Attach Schedule E (Form 1040), Form 1065

or other applicable forms to return. If Schedule E, Form 1065 or

North American Industrial Classification System (NAICS)—Enter

other applicable forms contain activity of both the individual

your six–digit NAICS code. To view a complete listing of

and single member LLC, prepare a pro forma schedule which

NAICS codes, visit the United States Census Bureau at

contains only activity of the single member LLC.

Line 7—Enter the short–term and long–term capital gain (loss)

Item D—Check the applicable boxes:

from Form 1040, 1041 or 1065, adjusted to reflect differences

in federal and Kentucky tax laws. If a net (loss), do not include

(a) Qualified Investment Pass–through Entity—Check this

more than $3,000. Attach Schedule D (Form 1040), Schedule

box if the single member LLC is a qualified investment

D (Form 1041), Schedule D (Form 1065) or other applicable

pass–through entity as provided by KRS 141.206(15).

forms to return. If Schedule D or other applicable forms contain

(b) Initial Return—Check this box if this is the single member

activity of both the individual and single member LLC, prepare

LLC’s first time filing a single member LLC return in

a pro forma schedule which contains only activity of the single

Kentucky.

member LLC.

LLC’s final return. If the organization has dissolved or

Line 8—Enter the Section 1231 gain or (loss) from Form 4797 or

withdrawn, attach an explanation.

Form 1065 adjusted to reflect differences in federal and Kentucky

(d) Amended Return—Check this box if this is an amended

tax laws. Attach Form 4797, Form 1065 or other applicable forms

return. Attach statement giving explanation of changes to

to return. If Form 4797, Form 1065 or other applicable forms

income and LLET.

contain activity of both the individual and single member LLC,

(e) Short–period Return—Check this box and submit an

prepare a pro forma schedule which contains only activity of

explanation for a short–period that is not an initial return.

the single member LLC.

(f)

Change of Name—Check this box if the single member LLC

has changed its name.

Line 9—Enter the total of any other income (attach schedule).

(g) Change of Address—Check this box if the single member

Line 10—Enter the total of deductions not included on Lines 1

LLC has changed its address.

through 9, if any (attach schedule).

(h) Change of Accounting Period—Check this box if the single

member LLC has changed its accounting period.

Line 11—Enter the total of Lines 1 through 9 less Line 10.

Item E—Check applicable box to indicate whether the single

Line 12—Enter 100 percent if the single member limited liability

member is filing a composite return or a single return.

company is doing business only in Kentucky or the percentage

from Schedule A (Form 41A720A), Section I, Line 12 if the single

PART I—KENTUCKY NET DISTRIBUTABLE INCOME

member limited liability company is doing business within and

Line 1—Enter the ordinary income from Form 1040, 1041 or

without Kentucky. Attach Schedule A to Form 725 filed with the

1065, adjusted to reflect differences in federal and Kentucky

department.

tax laws, such as depreciation. Attach Schedule C (Form 1040),

For purposes of determining the income to enter on Line 2 of the

Schedule F (Form 1040), Schedule E (Form 1040), Form 1065

Kentucky Limited Liability Entity Tax Credit Worksheet included

or other applicable forms to return. If Schedule C, Schedule F ,

in the instructions for Forms 740, 740–NP or 741, multiply Line

Schedule E, Form 1065 or other applicable forms contain activity

11 by the percentage on Line 12.

of both the individual and single member LLC, prepare a pro

forma schedule which contains only the activity of the single

Note: If Form 8582–K is required, adjust the amount entered

member LLC.

on Line 11 to exclude any income, loss, deduction or expense

related to a passive activity. If the amount on Line 7 (Net

Line 2—Enter the net income (loss) from rental real estate

short–term and long–term capital loss) is subject to a capital

activities from Form 1040, 1041 or 1065, adjusted to reflect

loss limitation, adjust the amount entered on Line 11 to exclude

differences in federal and Kentuck y tax laws, such as

the loss not allowed.

depreciation. Attach Schedule E (Form 1040), 4835, 1065 or

other applicable forms to return. If Schedule E, 4835, 1065 or

PART II—LLET COMPUTATION

other applicable forms contain activity of both the individual

Line 1—Enter the amount from Schedule LLET, Section D, Line

and single member LLC, prepare a pro forma schedule which

1. A single member LLC must use Schedule LLET(K), Limited

contains only activity of the single member LLC.

Liability Entity Tax (For a Limited Liability Pass–through Entity

with Economic Development Project(s)), if the single member

Line 3—Enter the net income (loss) from other rental activities

from Form 1040, 1041 or 1065, adjusted to reflect differences

LLC has one or more projects under the Kentucky Rural Economic

in federal and Kentucky tax laws, such as depreciation. Attach

Development Act (KREDA), Kentucky Industrial Development

Schedule C (Form 1040), Form 1065 or other applicable forms

Act (KIDA), Kentucky Economic Opportunity Zone Act (KEOZ),

Kentucky Jobs Retention Agreement (KJRA), Kentucky Industrial

to return. If Schedule C, Form 1065 or other applicable forms

contain activity of both the individual and single member LLC,

Revitalization Act (KIRA), Kentucky Jobs Development Act

prepare a pro forma schedule which contains only activity of

(KJDA), Kentucky Business Investment Program (KBI), Kentucky

Reinvestment Act (KRA) and Incentives for Energy Independence

the single member LLC.

Act (IEIA).

Line 4—Enter the interest income earned by the single member

Line 2—Enter the recycling/composting equipment LLET

LLC (attach schedule).

credit recapture amount from Schedule RC–R, Line 12. Attach

Line 5—Enter the dividend income earned by the single member

Schedule RC–R, Recycling or Composting Equipment Tax Credit

LLC (attach schedule).

Recapture.

Line 6—Enter the royalty income from Form 1040, 1041 or 1065,

Line 3—Enter the total of Lines 1 and 2.

Instructions For Form 725 - Kentucky Single Member Llc Individually Owned Llet Return - 2011 Page 7

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