Kentucky Kentucky Itemized Deductions

Kentucky Itemized Deductions
Schedule A (740)
FORM

740

SCHEDULE A
Commonwealth of Kentucky
Department of Revenue

KENTUCKY ITEMIZED DEDUCTIONS
FULL-YEAR RESIDENTS ONLY
  Enclose with Form 740

Enter name(s) as shown on Form 740, page 1.	

Interest
Expense

2023

Your Social Security Number	

	  1	 Home mortgage interest and points reported to you on
		

federal Form 1098.......................................................................................................	 1	

00

	  2	 Home mortgage interest not reported to you on federal
		

Form 1098 (if paid to an individual, provide that person’s

		

name, identifying number and address)

					 2	

00

	  3	 Points not reported to you on federal Form 1098.......................................................	 3	

00

	 4	 RESERVED................................................................................................................	 4	

00

	  5	 Investment interest (enclose federal Form 4952 if required)......................................	 5	

00

	 6	 Total Interest. Add lines 1 through 5. Enter here....................................................................................	 	 6	
	  7	 Contributions by cash or check...................................................................................	 7	

00

	  8	 Other than cash or check (enclose federal Form 8283
Contributions
		
if over $500)................................................................................................................	 8	
Note:

00

For any contribution of $250 	  9	 Artistic charitable contributions deduction
or more, see
instructions.	 		
(enclose copy of appraisal).........................................................................................	 9	
	
	
	 10	 Carryover from prior year............................................................................................	10	

00
00

	11	Total Contributions. Add lines 7 through 10. Enter here........................................................................	 	11	
	 12	 Gambling losses........................................................................................................ 	12	
Other
Miscellaneous	 13	 Other (see instructions)			 13	
Deductions
	14	Total Other Miscellaneous Deductions. Add lines 12 and 13. Enter here	

00

00

00
00

........................................	14	

00

Total
Itemized
Deductions 	 15	 Add lines 6, 11, and 14. Enter here............................................................................................................	15	

00

DIVIDING DEDUCTIONS BETWEEN SPOUSES
Use this schedule if married filing separately on a combined return.
16	

Total itemized deductions, line 15........................................................................................................................................	.00

17	

Percent of income (Form 740, line 9, Column A) to total income (Form 740, total of line 9, Columns A and B).................. 	%

18	

Percent of income (Form 740, line 9, Column B) to total income (Form 740, total of line 9, Columns A and B).................. 	%

19	

Percent on line 17 times total deductions entered on line 16 (enter here and on Form 740, line 10, Column A)................ 	.00

20	

Percent on line 18 times total deductions entered on line 16 (enter here and on Form 740, line 10, Column B)................ 	.00

230012 42A740-A (10-23)	

Page 1 of 4

Form 740 (2023)
Schedule A

	

Instructions for Schedule A

Page 2 of 4

Do not include on Schedule A items deducted elsewhere, such as on Schedule C, E, F or Kentucky Schedule M.
You may itemize your deductions for Kentucky even if you do not
itemize for federal purposes. Generally, if your deductions exceed
$2,980, it will benefit you to itemize. If you do not itemize, you
may elect to take the standard deduction of $2,980.

Funds provided by you include down payments, escrow
deposits, earnest money applied at closing, and other amounts
actually paid at closing. They do not include amounts you
borrowed as part of the overall transaction.

Special Rules for Married Couples—If one spouse itemizes
deductions, the other must also itemize. Married couples filing
a joint federal return and who wish to file separate returns or a
combined return for Kentucky may: (a) file separate Schedules A
showing the specific deductions claimed by each, or (b) file one
Schedule A and divide the total deductions between them based
on the percentage of each spouse’s income to total income.

Seller-Paid Points—If you are the buyer, you may be able to
deduct points the seller paid in 2023.  You can do this if the loan
was used to buy your main home and the points meet item 2
above. You must reduce your basis in the home by those points,
even if you do not deduct them.

Lines 1 through 6—Interest Expense
You may deduct interest that you have paid during the taxable year
on a home mortgage. You may not deduct interest paid on credit
or charge card accounts, a life insurance loan, an automobile or
other consumer loan, delinquent taxes or on a personal note held
by a bank or individual.
Interest paid on business debts should be deducted as a business
expense on the appropriate business income schedule.
You may not deduct interest on an indebtedness of another person
when you are not legally liable for payment of the interest. Nor
may you deduct interest paid on a gambling debt or any other
nonenforceable obligation. Interest paid on money borrowed to
buy tax-exempt securities or single premium life insurance is
not deductible.
Line 1—List the interest and points (including “seller-paid points”)
paid on your home mortgage to financial institutions and reported
to you on federal Form 1098.
Line 2—List other interest paid on your home mortgage and not
reported to you on federal Form 1098. Show name and address
of individual to whom interest was paid.
Line 3—List points (including “seller-paid points”) not reported to
you on federal Form 1098. Points (including loan origination fees)
charged only for the use of money and paid with funds other than
those obtained from the lender are deductible over the life of the
mortgage. However, points may be deducted in the year paid if all
three of the following apply: (1) the loan was used to buy, build
or improve your main home, and was secured by that home, (2)
the points did not exceed the points usually charged in the area
where the loan was made, and were figured as a percentage of
the loan amount, and (3) if the loan was used to buy or build
the home, you must have provided funds (see below) at least
equal to the points charged. If the loan was used to improve the
home, you must have paid the points with funds other than those
obtained from the lender.

If you are the seller, you cannot deduct the points as interest.
Instead, include them as an expense of the sale.
This generally does not apply to points paid to refinance your
mortgage. Federal rules apply. See federal Publication 936 for
more information.
Line 4—RESERVED.
Line 5, Interest on Investment Property—Investment interest
is interest paid on money you borrowed that is allocable to
property held for investment. It does not include any interest
allocable to a passive activity or to securities that generate taxexempt income.
Complete and enclose federal Form 4952, Investment Interest
Expense Deduction, to figure your deduction.
Exception. You do not have to file federal Form 4952 if all three
of the following apply:
(a)	 your investment interest is not more than your investment
income from interest and ordinary dividends,
(b)	 you have no other deductible investment expenses, and
(c)	 you have no disallowed investment interest expense from
2022.

	

Page 3 of 4

Lines 7 through 11—Contributions

	

your total deduction for gifts of property is over $500,

You may deduct what you actually gave to organizations that are
religious, charitable, educational, scientific or literary in purpose.
You may also deduct what you gave to organizations that work to
prevent cruelty to children or animals. In general, contributions
deductible for federal income tax purposes are also deductible
for Kentucky.

	

you gave less than your entire interest in the property,

	 your cash contributions or contributions of ordinary income
property are more than 30 percent of your Kentucky Adjusted
Gross Income,

Examples of qualifying organizations are:

	 your gifts of capital gain property to certain organizations
are more than 20 percent of your Kentucky Adjusted Gross
Income, or

	

Churches, temples, synagogues, Salvation Army, Red Cross,
CARE, Goodwill Industries, United Way, Boy Scouts, Girl
Scouts, Boys and Girls Clubs of America, etc.

	

	

Fraternal orders if the gifts will be used for the purposes listed
above.

	

Veterans’ and certain cultural groups.

	

Nonprofit schools, nonprofit hospitals and medical research
organizations.

	

Federal, state and local governments if the gifts are solely for
public purposes.

If you contributed to a qualifying charitable organization and also
received a benefit from it, you may deduct only the amount that
is more than the value of the benefit you received.
Contributions You MAY Deduct
Contributions may be in cash, property or out-of-pocket expenses
you paid to do volunteer work for the kinds of organizations
described above. If you drove to and from the volunteer work, you
may take 14 cents a mile or the actual cost of gas and oil. Add
parking and tolls to the amount you claim under either method.
(Do not deduct any amounts that were repaid to you.)
Note: You are required to maintain receipts, cancelled checks
or other reliable written documentation showing the name of the
organization and the date and amount given to support claimed
deductions for charitable contributions.
Separate contributions of $250 or more require written
substantiation from the donee organization in addition to your
proof of payment. It is your responsibility to secure substantiation.
A letter or other documentation from the qualifying charitable
organization that acknowledges receipt of the contribution
and shows the date and amount constitutes a receipt. This
substantiation should be kept in your files. Do not send it
with your return.
See federal Publication 526 for special rules that apply if:
	 your total contributions exceed 60 percent of Kentucky
Adjusted Gross Income,
	 If a Kentucky Net Operating Loss Deduction (KNOLD) is
present, you must figure your Kentucky Adjusted Gross
income without the KNOLD before applying the 60%
limitation. 740, line 7 less Schedule M, line 15 equals your
Kentucky Adjusted Gross Income without KNOLD.

you gave gifts of property that increased in value, made bargain
sales to charity, or gave gifts of the use of property,

	 you expect to receive any state or local tax credit for a
contribution made.
You MAY NOT Deduct as Contributions
	

Travel expenses (including meals and lodging) while away from
home unless there was no significant element of personal
pleasure, recreation or vacation in the travel.

	

Political contributions.

	 Dues, fees or bills paid to country clubs, lodges, fraternal
orders or similar groups.
	 Value of any benefit, such as food, entertainment or
merchandise that you received in connection with a
contribution to a charitable organization.
	

Cost of raffle, bingo or lottery tickets.

	

Cost of tuition.

	

Value of your time or service.

	

Value of blood given to a blood bank.

	

The transfer of a future interest in tangible personal property
(generally, until the entire interest has been transferred).

	

Gifts to:

		Individuals.
		 Foreign organizations.
		 Groups that are run for personal profit.
		 Groups whose purpose is to lobby for changes in the laws.
		 Civic leagues, social and sports clubs, labor unions and
chambers of commerce.
		 Contributions for which you receive any state or local tax
credit of more than 15% of the contribution.
Line 7—Enter all of your contributions paid by cash or check
(including out-of-pocket expenses).
Line 8—Enter your contributions of property. If you gave used
items, such as clothing or furniture, deduct their fair market
value at the time you gave them. Fair market value is what a
willing buyer would pay a willing seller when neither has to buy
or sell and both are aware of the conditions of the sale. If your
total deduction for gifts of property is more than $500, you must
complete and enclose federal Form 8283, Noncash Charitable
Contributions. If your total deduction is over $5,000, you may also
have to obtain appraisals of the values of the donated property.
See federal Form 8283 and its instructions for details.

	

Also include the value of a leasehold interest property contributed
to a charitable organization to provide temporary housing for the
homeless. Enclose Schedule HH.
Recordkeeping—If you gave property, you should keep a receipt
or written statement from the organization you gave the property
to, or a reliable written record, that shows the organization’s name
and address, the date and location of the gift and a description
of the property. You should also keep reliable written records for
each gift of property that include the following information:
(a)	 How you figured the property’s value at the time you gave
it. (If the value was determined by an appraisal, you should
also keep a signed copy of the appraisal.)
(b)	 The cost or other basis of the property if you must reduce it by
any ordinary income or capital gain that would have resulted
if the property had been sold at its fair market value.
(c)	 How you figured your deduction if you chose to reduce your
deduction for gifts of capital gain property.
(d)	 Any conditions attached to the gift.
(e)	 If the gift was a “qualified conservation contribution” under
IRC Section 170(h), the fair market value of the underlying
property before and after the gift, the type of legal interest
donated and the conservation purpose furthered by the gift.
Line 9—Enter artistic charitable contributions. A deduction is
allowed for “qualified artistic charitable contributions” of any
literary, musical, artistic or scholarly composition, letter or
memorandum, or similar property.
An amount equal to the fair market value of the property on
the date contributed is allowable as a deduction. However,
the deduction is limited to the amount of the taxpayer’s artistic
adjusted gross income for the taxable year.
The following requirements for a deduction must be met:
(a)	 The property must have been created by the personal
efforts of the taxpayer at least one year prior to the date
contributed. The creation of this property cannot be related
to the performance of duties while an officer or employee of
the United States, any state or political subdivision thereof.
(b)	 A written appraisal of the fair market value of the contributed
property must be made by a qualified independent appraiser
within one year of the date of the contribution. A copy of the
appraisal must be enclosed with the tax return.
(c)	 The contribution must be made to a qualified organization
as described in this section.

Page 4 of 4

Line 10—Enter any carryover of contributions that you were not
able to deduct in an earlier year because they exceeded your
adjusted gross income limit. See federal Publication 526 for
details on how to figure your carryover.
Line 12, Gambling Losses—You may deduct gambling losses to
the extent of your winnings reported on Form 1040 or 1040-SR,
Schedule 1, line 8(b).
Line 13—Other Miscellaneous Deductions
Use this line to report miscellaneous deductions. Only the
expenses listed below can be deducted on line 13.
	

Federal estate tax on income in respect of a decedent.

	

Amortizable bond premium on bonds acquired before October
23, 1986.

	

Deduction for repayment of amounts under a claim of right if
more than $3,000. See federal Publication 525.

	

Unrecovered investment in a pension.

List the type and amount of each expense. Enter one total on
line 13. For more information on these expenses, see federal
Publication 529.
Line 15—Total Itemized Deductions
Dividing Deductions Between Spouses—Married taxpayers
who are filing separate returns or a combined return but using
only one Schedule A must divide the itemized deductions.
Complete lines 16 through 20. If one spouse is not required to
file a Kentucky return, total deductions may be divided between
them based on the percentage of each spouse’s income to total
income or separate Schedules A may be filed.