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Screen KYD - Kentucky Capital Gain (Loss) and Built-in Gains (1120)
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Overview
Use this screen to complete Schedule D.
Capital Gains and Losses
UltraTax CS uses the information entered in this section to complete Schedule D.
Detail schedule
Enter the sale of capital assets that aren't sold on installment in the
Detail schedule
statement window. UltraTax CS automatically transfers information from the federal Schedule D to this statement window. If the Kentucky cost / basis is different from the federal cost / basis, enter the state basis in the Cost or Basis
column in the statement window. UltraTax CS defaults to the federal cost / basis amount unless the Cost or Basis
column is changed. UltraTax CS reports this information on Form 8949, based on the following transaction types:- Box A - Reported on Form 1099-B with basis reported to the IRS
- Box B - Reported on Form 1099-B but basis not reported to the IRS
- Box C - Not reported on Form 1099-B
The
Detail schedule
statement window includes the following boxes.- Form 1099B:Use this box to determine which unit of Form 8949 to report the transaction.
Code | Description | ||
|---|---|---|---|
1 | Box A - Reported on 1099-B showing basis was reported to the IRS | ||
2 | Box B - Reported on 1099-B showing basis wasn't reported to the IRS | ||
3 | Box C - Not reported on 1099-B (default) | ||
- 1099B Errors:Use this box to identify 1099B errors that were reported to the IRS.
Code | Description | Form 8949 Adj Code |
|---|---|---|
1 | 1099- Box 1c Type of gain (loss) is incorrect | T |
2 | 1099-Box 3 Cost or other basis is incorrect | B |
3 | 1099-Box 1c and 3 are incorrect | T; B |
It's not necessary to enter
T
or B
in the Adj Code
column. UltraTax/1120 automatically prints the adjustment code in the Form 8949 (f) Code(s) from instructions
column. Use the Adj to Gain (Loss)
and Adj Code
columns to report any other adjustments that may apply to the transaction. See Adj Code
for a full list of codes.- S Corp Type:For S Corporations, enter1or2to transfer the gain or loss to Schedule K, Other income. If you leave theS Corp Type columnblank, the transaction defaults to portfolio and transfers the gain or loss to Schedule K, Net short-term capital gain (loss) or Net long-term capital gain (loss).
- Date Acquired / Date Sold:Enter acquired and sold dates in MM/DD/YY format. The following text is also available to print in the date boxes on the form.
- VARIOUS - EnterV.
- INHERIT - EnterI.
- WORTHLSS - EnterW.
note
- If you leave the date boxes blank, UltraTax CS defaults to short-term holding period.
- VARIOUS dates are treated as short-term holding period.
- INHERIT in Date Acquired is treated as long-term holding period.
- WORTHLSS in Date Sold is treated as short-term holding period.
- Force: To force the holding period of the sale, select a code from the dropdown list. For S Corporations, enter3to designate the asset as collectible. The gain or loss is included on Schedule K, Net long-term capital gain (loss), and Schedule K, Collectibles (28%) gain (loss). UltraTax/1120 automatically prints code C in the Form 8949 (f) Code(s) from instructions column. S Corporations can also use code4or5to designate the asset as qualified small business stock (section 1202 stock). Enter4if the sale is subject to the 50-percent exclusion at the shareholder level. Enter5to designate the sale is subject to the 60-percent exclusion at the shareholder level. The section 1202 gain transfers to Schedule K, Other income.
- Adj to Gain (Loss): Use this box to adjust the amounts reported to the IRS on a 1099-B, 1099-S (or substitute statement) is incorrect, to exclude or postpone a capital gain, report a disallowed loss, among others.
note
- You'll need to enter a code inAdj Codefor every amount you enter inAdj to Gain (Loss).
- Gain (Loss)includes the amount you enter inAdj to Gain (Loss).
- Adj Code: Use this box to enter a code for the adjustment amount you entered inAdj to Gain (Loss). All adjustment amounts are required to have an adjustment code. The codes you can enter in this box are listed in the following table and in the dropdown list.
Code | Description |
|---|---|
B* | 1099-B basis shown in box 3 is incorrect. *See the following note regarding multiple codes. |
T* | 1099-B type of gain / loss shown in box 1c is incorrect. *See the following note regarding multiple codes. |
N | Received 1099-B or 1099-S as a nominee for the actual owner. |
Q | Sold or exchanged qualified small business stock. |
X | Excluded gain on DC Zone assets or qualified community assets. |
R | Postponed gain (such as QSB rollover or empowerment zone). |
W | Nondeductible loss from a wash sale. |
L | Nondeductible loss other than wash sale. |
E | Selling expenses or option premiums not on 1099-B or 1099-S. |
C* | Disposed of collectibles. *See the following note regarding multiple codes. |
M | Multiple transactions reported on a single row. |
O | Adjustment not explained with any other code. |
note
You may use the
1099B Errors
, Force
, and Adj Code
boxes to report multiple codes for a transaction. For example, an excluded gain will need to be reported for a transaction that received a Form 1099-B with an incorrect Basis and Holding period. The following data entry results in codes B, T, X reported in Form 8949 column (h).- 1099B Errors= 3 - 1099-Box 1c and 3 are incorrect
- Adj to Gain (Loss)= amount to be excluded (enter as a negative amount)
- Adj Code= X- Excluded gain on DC Zone assets, or qualified community assets
- Gain (Loss):UltraTax CS automatically calculates the gain or loss for the sale based on the information you enter in the Sales Price, Cost or Basis, and Adj to Gain (Loss) boxes.
note
The Gain (Loss) column calculates before you enter information in
Adj to Gain (Loss)
, so you may use the calculation to determine the adjustment amount needed for the correct taxable gain or loss.- FMV at S Election Date and Adj Basis at S Election Date:If the capital asset is subject to the S Corporation built-in gains tax, enter the fair market value at the S election date and the adjusted basis at the S election date. UltraTax/1120 calculates the amount of recognized built-in gain or loss on that asset. The built-in gains tax allocated to short-term and long-term items transfers to the respective Tax on capital gains lines on Form 1120S, Schedule D.
- Form / Unit:Enter the form and unit number related to this activity if the sale is related to a passive activity. The forms and schedules that you can enter in Form are listed in the following table and in the dropdown list.
Code | Activity |
|---|---|
Built-In Gains (S Corp)
UltraTax CS uses the information entered in this section to complete Schedule D.
Were assets acquired in a Section 1374(d)(8) transaction
Enter
1
if the S Corporation acquired transferred (substituted) basis property from a C Corporation, the property was owned by the S Corporation less than five years, and the property was disposed of during the current tax year. A separate built-in gain tax recognition period applies to transferred basis assets. The recognition period is measured from the date the property is acquired by the S Corporation rather than the date of election of S Corporation status.Code
1
should also be entered in this box if the S Corporation acquired property from another S Corporation that is subject to the built-in gains tax, and the built-in gain recognition period for that asset hasn't yet ended. The recognition period is the remainder of the original recognition period during which the transferor S Corporation was subject to the built-in gains tax with respect to that property.Enter
2
if the S Corporation hasn't acquired transferred basis property from a C Corporation, or from an S Corporation that is subject to the built-in gains tax.UltraTax/1120-KY continues to calculate any built-in gain carryover when code
1
is entered, and the S Corporation’s recognition period has been met. UltraTax/1120-KY doesn't calculate any carryover when code 2
is entered, and the S Corporation’s built-in gain recognition period has been met.