Form 740-Np - Kentucky Income Tax Return Nonresident Or Part-Year Resident - 2012 Page 49
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60Line 14, Interest on Investment Property—Investment interest
Special rules apply if you had both gains and losses from
is interest paid on money you borrowed that is allocable to
nonbusiness casualties or thefts. See federal Form 4684 for
property held for investment. It does not include any interest
details.
allocable to a passive activity.
Losses You MAY NOT Deduct
Attach federal Form 4952, Investment Interest Expense
Deduction.
Money or property misplaced or lost.
Exception. You do not have to file federal Form 4952 if all three
Breakage of china, glassware, furniture and similar items
of the following apply:
under normal conditions.
(a) your investment interest is not more than your investment
Progressive damage to property (buildings, clothes, trees,
income from interest and ordinary dividends,
etc.) caused by termites, moths, other insects or disease.
(b) you have no other deductible investment expenses, and
Deduct the costs of proving you had a property loss as a mis-
(c) you have no disallowed investment interest expense from
cellaneous deduction on Line 26. (Examples of these costs are
2011.
appraisal fees and photographs used to establish the amount
of your loss.)
For more details, see federal Publication 550, Investment
Income and Expenses.
For more details, see federal Publication 547, Nonbusiness
Disasters, Casualties, and Thefts. It also gives information
CONTRIBUTIONS
about federal disaster area losses.
You may deduct what you actually gave to organizations that
are religious, charitable, educational, scientific or literary in
MISCELLANEOUS DEDUCTIONS
purpose. You may also deduct what you gave to organizations
that work to prevent cruelty to children or animals. In general,
Most miscellaneous deductions cannot be deducted in full. You
contributions deductible for federal income tax purposes are
must subtract 2 percent of your adjusted gross income from
also deductible for Kentucky.
the total. Compute the 2 percent limit on Line 29.
You are required to maintain receipts, cancelled checks or
Note: Married taxpayers filing separate Forms 740-NP who
other reliable written documentation showing the name of
choose to file one Schedule A and prorate the total must com-
the organization and the date and amount given to support
bine the Line 8 amounts from both returns.
claimed deductions for charitable contributions.
Generally, the 2 percent limit applies to job expenses you paid
Separate contributions of $250 or more require written sub-
for which you were not reimbursed (Line 24). The limit also ap-
stantiation from the donee organization in addition to your
plies to certain expenses you paid to produce or collect taxable
proof of payment. It is your responsibility to secure substan-
income (Line 26). See the instructions for Lines 24, 25 and 26
tiation. A letter or other documentation from the qualifying
for examples of expenses to claim on these lines.
charitable organization that acknowledges receipt of the con-
tribution and shows the date and amount constitutes a receipt.
The 2 percent limit does not apply to certain other miscella-
This substantiation should be kept in your files. Do not send
neous expenses that you may deduct. These expenses can be
deducted in full on Line 31. The Line 31 instructions describe
it with your return.
these expenses. Included are deductible gambling losses
In addition, enter on Line 17 the value of a leasehold interest
(to the extent of winnings) and certain job expenses of dis-
property contributed to a charitable organization to provide
abled employees. See federal Publication 529, Miscellaneous
temporary housing for the homeless. Attach Schedule HH.
Deductions, for more information.
CASUALTY AND THEFT LOSSES
Expenses Subject to the 2 Percent Limit
Use Line 20 to report casualty or theft losses of property that
Important: The increase in first-year luxury automobile
is not trade, business, rent or royalty property. Attach federal
depreciation caps, the 30 percent and the 50 percent special
Form 4684, Casualties and Thefts, or a similar statement to
depreciation allowance, the additional New York Liberty Zone
figure your loss. Enter on Line 20 the amount of loss from
Section 179 deduction for property placed in service after
federal Form 4684.
September 10, 2001, and the increased Section 179 deduc-
tion limits and thresholds for property placed in service
Losses You MAY Deduct
after December 31, 2002, are not allowable for Kentucky
tax purposes. For passenger automobiles purchased after
You may be able to deduct all or part of each loss caused by
September 10, 2001, you must compute Kentucky depreciation
theft, vandalism, fire, storm, and car, boat and other accidents
in accordance with the IRC in effect on December 31, 2001.
or similar causes. You may also be able to deduct money you
had in a financial institution but lost because of the insolvency
Create a Kentucky Form 2106 by entering Kentucky at the top
or bankruptcy of the institution.
center of a federal Form 2106, Employee Business Expenses.
Complete Section D—Depreciation of Vehicles in accordance
You may deduct nonbusiness casualty or theft losses only to
with the IRC in effect on December 31, 2001. Attach a copy of
the extent that:
the federal Form 2106 filed for federal income tax purposes if
(a) the amount of each separate casualty or theft loss is more
no adjustments are required.
than $100, and
Line 24—Use this line to report job-related expenses you
(b) the total amount of all losses during the year is more than
paid for which you were not reimbursed. In some cases you
10 percent of Form 740-NP, page 1, Line 8.
MUST first fill out Form 2106, Employee Business Expenses,
Note: Married taxpayers filing separate Forms 740-NP who
or Form 2106-EZ, Unreimbursed Employee Business Expenses.
choose to file one Schedule A and prorate the total must com-
Fill out Form 2106-EZ if you claim any unreimbursed travel,
bine the Line 8 amounts from both returns.
transportation, meal or entertainment expenses for your job.
15
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