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Screen KYPAL - Kentucky Instate and Passive Amounts (1040)
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Overview
Use this screen to suppress or freeze basis and at-risk calculations and /or adjust the in-state amounts calculated as if the federal return was calculated using Kentucky source income, expenses and adjustments. If information transferred from UltraTax/1040 doesn't require additional data or coding, UltraTax/1040-KY shows it on the form only, not in the screen.
Nonresident and Part-Year Passive Activity Losses
Suppress at-risk and basis worksheet calculations
UltraTax CS calculates at-risk and basis when federal Form 8582 would have been required had only Kentucky source income, expense, and adjustments been used to calculate the federal return for Kentucky part-year and nonresident taxpayers. The federal return calculates using allocation data entered for Kentucky basis, at-risk and passive activity carryover information entered for Kentucky and MAGI purposes, and income amounts, regardless of basis, at-risk, or passive activity loss limitation impact. Selected amounts transferred to this screen result from that process. Enter
X
to suppress the calculation. Also, enter X
in Suppress instate or PAL results from appearing on Kentucky Post Allocation (AGI) Worksheet
if necessary.Freeze at-risk and basis worksheet calculation results
UltraTax CS calculates basis and at-risk amounts each time data transfers from UltraTax/1040. Enter
X
to suspend future calculation. Amounts on the Post Allocation Worksheet, Instate
and / or PAL Calculated Amounts
fields also freeze despite federal data change.Suppress instate or PAL results below from appearing on Kentucky Post Allocation (AGI) Worksheet
Enter
X
to use allocation amounts entered on Kentucky screens. If X
is entered, UltraTax CS updates the basis and at-risk calculations with changed federal data. However, the amounts generated from the calculation aren't used to complete the Kentucky Post Allocation Worksheet. UltraTax CS assumes that allocation data is entered in federal screens and calculates with federally entered allocation data.Post Allocation Worksheet - Instate Calculated Amounts
Business*
Kentucky part-year and nonresident business income is a component of income that falls within at-risk and passive activity loss limitation / instate calculations. Non-Kentucky business activities are removed and remaining units are used in a federal recalculation (unless a portion of the business activity is allocated to Kentucky via the state allocation spreadsheet available in the federal
C
screen). If a business unit is subject to at-risk limitations, enter Kentucky specific amounts in the federal 6198
screen or in the allocation spreadsheet related to the 6198
screen. If a business unit is further designated as passive in the federal C-2
screen, enter Kentucky passive carryover amounts within the state allocation spreadsheet or on the related StCO
screen. If at-risk or passive activity carryover amounts calculate this year, the amounts will proforma to next year’s StCO
screen (passive carryovers) or the 6198
screen (at-risk carryovers) for the business unit. If the taxpayer becomes a resident of Kentucky in the future, resident returns don't make provisions for at-risk or passive activity carryovers that differ from federal carryover amounts.Specific information for columns follows:
- Considering Only KY Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse:: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk never have an amount assigned to the spouse.
Capital gain (loss)
Kentucky part-year and nonresident capital gain (loss) is a component of income that falls within the at-risk, basis, and passive activity loss limitation / instate calculation. Non-Kentucky capital gains and losses are removed; remaining gains and losses are used in a federal recalculation. Short and long-term capital loss carryover amounts in the federal
CO
screen are disregarded. Enter an adjustment in this field to include these amounts. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s StCO
screen and/or the K1-St
screen for the federal unit. If at-risk carryover amounts calculate this year, the amounts will proforma to next year’s 6198
screen. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s K1-5
or K1-7
screen. If the taxpayer becomes a resident of Kentucky in the future, resident returns don't make provisions for basis, at-risk, or passive activity carryovers that differ from federal carryover amounts.Specific information for columns follows:
- Considering Only KY Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment:: Enter an amount to adjust the calculated amount, if necessary. An adjustment may be needed if a short or long-term capital loss carryover is sourced to Kentucky.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk never have an amount assigned to the spouse.
Other gain (loss)
Kentucky part-year and nonresident other gain (loss) is a component of income that falls within the at-risk, basis, and passive activity loss limitation / instate calculation. Non-Kentucky other gains and losses are removed and remaining gains and losses are used in a federal recalculation. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s
StCO
and/or K1-St
screen for the federal unit. If at-risk carryover amounts calculate this year, the amounts will proforma to next year’s 6198
screen. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s K1-5
or K1-7
screen. If the taxpayer becomes a resident of Kentucky in the future, resident returns don't make provisions for basis, at-risk, or passive activity carryovers that differ from federal carryover amounts.Specific information for columns follows:
- Considering Only KY Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary. An adjustment may be needed if a Section 1231 Nonrecaptured Loss carryover is sourced to Kentucky, for example.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk, never have an amount assigned to the spouse.
Rents*
Kentucky part-year and nonresident rent income (all federal Schedule E related income) is a component of income that falls within the at-risk, basis and passive activity loss limitation / instate calculation. Non-Kentucky rent, farm rent, K1 and K1-T activities are removed and remaining units are used in a federal recalculation (unless a portion of the rental activity is allocated to Kentucky via the state allocation spreadsheet available in the federal
Rent
, 4835
, K1
, and/or K1-T
screens). If a rental unit is further designated (or defaults to) as passive at the federal level, enter Kentucky passive carryover amounts within the state allocation spreadsheet or on the related StCO
or K1-St
screen. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s StCO
and/or K1-St
screen for the federal unit. If at-risk carryover amounts calculate this year, the amounts will proforma to next year’s 6198
screen. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s K1-5
or K1-7
screen. If the taxpayer becomes a resident of Kentucky in the future, resident returns don't make provisions for basis, at-risk, or passive activity carryovers that differ from federal carryover amounts.Specific information for columns follows:
- Considering Only KY Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk never have an amount assigned to the spouse.
Example:
Rental loss federal carryover due to MAGI, partially enabled for Kentucky part-year resident- Federal wages = 238,000 (138,000 KY W-2; 100,000 NJ W-2)
- Rental #1 = Loss 25,000 (sourced to Kentucky)
- Rental #2 = Income 10,000 (sourced to Kentucky)
- Federal rental income / loss = 0; suspended loss 15,000, unit 1
Recalculated rental income / loss Kentucky = -6000; suspended loss 9000, unit 1.
Example:
Rental loss permitted federal return, partially suspended for Kentucky nonresident- Federal wages = 100,000 (sourced to Kentucky)
- Rental #1 = Loss 30,000 (sourced to Kentucky)
- Rental #2 = Income 40,000 (sourced to New Jersey)
- Federal rental income/loss = 10,000; suspended loss 0; exception met.
Recalculated rental income/loss Kentucky = -25,000; suspended loss 5000, unit 1.
Farm*
Kentucky part-year and nonresident farm income is a component of income that falls within the at-risk and passive activity loss limitation / instate calculation. Non-Kentucky farm activities are removed and remaining units are used in a federal recalculation (unless a portion of the farm activity is allocated to Kentucky via the state allocation spreadsheet available in the federal
F
screen). If a farm unit is subject to at-risk limitations, enter Kentucky specific amounts in the federal 6198
screen or in the allocation spreadsheet related to the 6198
screen. If a farm unit is further designated as passive in the federal F-2
screen, enter Kentucky passive carryover amounts within the state allocation spreadsheet or on the related StCO
screen. If at-risk or passive activity carryover amounts calculate this year, the amounts will proforma to next year’s StCO
screen (passive carryovers) or 6198
screen (at-risk carryovers) for the farm unit. If the taxpayer becomes a resident of Kentucky in the future, resident returns don't make provisions for passive activity carryovers that differ from federal carryover amounts.Specific information for columns follows:
- Considering Only KY Sourced Activities:The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment:Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse:The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk, never have an amount assigned to the spouse.
Other income
Kentucky part-year and nonresident other income is a component of income that falls within the basis, at-risk and passive activity loss limitation / instate calculation. Non-Kentucky other income amounts are removed and remaining other income amounts are used in a federal recalculation. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s
K1-St
screen for the federal unit. If at-risk carryover amounts calculate this year, the amounts will proforma to next year’s 6198
screen. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s K1-5
or K1-7
screen. If the taxpayer becomes a resident of Kentucky in the future, resident returns don't make provisions for basis, at-risk, or passive activity carryovers that differ from federal carryover amounts.Specific information for columns follows:
- Considering Only KY Sourced Activities:The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry is not permitted.
- Adjustment:Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse:The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk, never have an amount assigned to the spouse.
Self-employment tax*
The self-employed tax adjustment to income is recalculated based in part on the income amounts that appear in the
Income
fields in this screen.Specific information for columns follows:
- Considering Only KY Sourced Activities:The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment:Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse:The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer / Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. This amount is a force field for the spouse.
SEP or qualified plan / Self-employed health / IRA deduction
SEP (or other qualified plan), self-employed health and IRA deductions are recalculated based in part on the income amounts included in income classified as self-employed net profit. The allocation for IRA deduction takes into consideration instate wages as they relate to worldwide wages combined with SE net profit.
Specific information for columns follows:
- Considering Only KY Sourced Activities:The amount that appears in this column is what the federal return would have calculated as SE net profit had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment:Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse:The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer / Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required, enter an amount in the field provided in theSpousecolumn. All adjustment to income amounts are force fields for the spouse.
Penalty on early withdrawal
Penalty on early withdrawal can be limited or enabled by at-risk and basis calculations.
Specific information for columns follows:
- Considering Only KY Sourced Activities:The amount that appears in this column is what the federal return would have calculated had all non-Kentucky activities been removed from the return. This is a calculating field, therefore data entry isn't permitted.
- Adjustment:Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse:The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer / Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required, enter an amount in the field provided in theSpousecolumn. All adjustment to income amounts are force fields for the spouse.