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Category: Kentucky

Kentucky Additions to Income

Interest Income from Bonds Issued by Other States and Their Political Subdivisions

Interest on securities issued by other states and their political subdivisions is taxed by Kentucky and must be reported. Also report dividends received from regulated investment companies (mutual funds) that are taxable for Kentucky income tax purposes. Note: Interest from securities of Kentucky and its political subdivisions is exempt.

Self-employed Health Insurance Deduction from Federal 1040

Enter the self-employed health insurance deduction from federal Form 1040, Line 29.

Resident Adjustment from Partnerships, Fiduciaries and S Corpl Schedule K-1

Enter resident adjustment from Kentucky Schedule K-1. Partners, beneficiaries of estates and trusts and S corporation shareholders, see Kentucky Schedule K-1 instructions.

Federal Depreciation from Form 4562

Enter total depreciation from federal Form 4562 if you have elected to take the 30 percent or 50 percent special depreciation allowance or the increased Section 179 deduction for property placed in service after September 10, 2001.

Other Additions —Enter other additions to federal adjusted gross income not listed above which include:

  • the portion of a lump-sum distribution on which you have elected the 20 percent capital gains rate for federal income tax purposes (Schedule P and Form 4972-K required);
  • any mortgage debt forgiven under the Mortgage Forgiveness Debt Relief Act of 2007;
  • the passive activity loss adjustment (see Form 8582-K and instructions);
  • differences in pension (3-year recovery rule) and IRA bases;
  • differences in gains (losses) from the sale of intangible assets amortized under the provisions of the Revenue Reconciliation Act of 1993; and
  • differences in gains (losses) from the sale of depreciable property placed in service after September 10, 2001.

Note: Before entering the difference in Other Additions you must take into account any addition or subtraction affecting the at–risk limitations.

For additional information, please refer to the Schedule M instructions.