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Kentucky Limitation on Business Losses
Extracted from PDF file 2023-kentucky-form-461-k.pdf, last modified September 2023Limitation on Business Losses
FORM 461-K Commonwealth of Kentucky Department of Revenue Enter name(s) as shown on Form 740 or 740-NP, page 1. KENTUCKY LIMITATION ON BUSINESS LOSSES Enclose with Form 740 or 740-NP 2023 Your Social Security Number Part I—Total Income/Loss Items—Enter income/loss modified for Kentucky/federal differences 1 RESERVED........................................................................................................................................................................... 1 2 740 Filers enter amount from Schedule 1 (Form 1040), line 3 or 740-NP Filers enter from Form 740-NP, page 4, line 7, Column B....................................................................................... 2 3 740 Filers enter amount from Form 1040 or 1040-SR, line 7 or 740-NP Filers enter from Form 740-NP, page 4, line 8, Column B....................................................................................... 3 4 740 Filers enter amount from Schedule 1 (Form 1040), line 4 or 740-NP Filers enter from Form 740-NP, page 4, line 9, Column B....................................................................................... 4 5 740 Filers enter amount from Schedule 1 (Form 1040), line 5 or 740-NP Filers enter from Form 740-NP, page 4, line 11, Column B...................................................................................... 5 6 740 Filers enter amount from Schedule 1 (Form 1040), line 6 or 740-NP Filers enter from Form 740-NP, page 4, line 12, Column B..................................................................................... 6 7 RESERVED........................................................................................................................................................................... 7 8 Enter other income, gain, or losses from a trade or business not reported on lines 1 through 7........................................... 8 9 Combine lines 1 through 8..................................................................................................................................................... 9 Part II—Adjustments for Amounts Not Attributable to Trade or Business 10 Enter any income or gain reported on lines 1 through 8 that is not attributable to a trade or business................................. 10 11 Enter any losses or deductions reported on lines 1 through 8 that are not attributable to a trade or business. (See instructions)................................................................................................................................................................... 11 12 Subtract line 11 from line 10................................................................................................................................................... 12 Part III—Limitation on Losses 13 If line 12 is a negative number, enter it here as a positive number. If line 12 is a positive number, enter it here as a negative number.................................................................................................................................................... 13 14 Add lines 9 and 13................................................................................................................................................................. 14 15 Enter $289,000 (or $578,000 for married taxpayers filing jointly or married filing separately on a combined return)............... 15 16 Add lines 14 and 15. If less than zero, enter the amount from line 16 as a positive number on Form 740, Schedule M, line 5 or Form 740-NP, page 4, line 16, Column B............................................................................................ 16 230205 42A461-K (10-23) Page 1 of 2 FORM 461-K (2023) Instructions for Form 461-K Purpose of Schedule—Form 461-K is used to calculate excess business loss. Excess business loss is the amount of the total deductions from your trade or business that exceeds your total gross income or gains, plus the threshold amount. The threshold amount for 2023 is $289,000 ($578,000 for married taxpayers filing jointly or married filing separately on a combined return). Form 461-K should be used if you are an individual taxpayer and your net losses from your trades or businesses are more than $289,000 ($578,000 for married taxpayers filing jointly or married filing separately on a combined return). PART I—TOTAL INCOME/LOSS ITEMS Use Part I to report all Kentucky income and losses. For full year Kentucky residents, enter the amount from the federal return modified for Kentucky/federal differences adjusted. For nonresidents or part-year residents, enter the amounts from the applicable lines on the 740-NP. Line 1—RESERVED Line 2—740 Filers enter any business income or loss reported on Schedule 1 (Form 1040) line 3, or Form 1041, line 3 modified for any Kentucky/federal differences. 740-NP Filers enter amount from 740-NP, page 4, line 7, Column B. Lines 3—740 Filers enter any capital gains or losses reported on Form 1040 or 1040-SR, line 7; Form 1040-NR, line 7; or Form 1041 line 4 modified for any Kentucky/federal differences. 740-NP Filers enter amount from 740-NP, page 4, line 8, Column B. Page 2 of 2 Line 9—Add lines 1 through 8 and enter on line 9. The resulting figure can be a positive or negative number. PART II—Adjustment for Amounts not Attributable to Trade or Business Use Part II to report the income, gain, or loss from your tax return that’s not from a trade or business. Line 10—Enter the combined amount of income or gain you reported on lines 1 through 8 above that is not from a trade or business. Line 11—Enter the combined amount of losses or deductions you reported on lines 1 through 8 above that is not from a trade or business. See the definition for trade or business below. Enter as a positive number. Trade or business—An activity qualifies as a trade or business if your primary purpose for engaging in the activity is for income or profit and you’re involved in the activity with continuity and regularity. The facts and circumstances of each case determine if an activity is a trade or business. The regularity of activities and transactions and the production of income are important elements. You don’t need to actually make a profit to be in a trade or business as long as you have a profit motive. However, you do need to make ongoing efforts to further the interests of your business. Line 12—Subtract line 11 from line 10. The resulting figure is your gain or loss that is not from a trade or business. Use this amount in Part III to figure your excess business loss. Line 4—740 Filers enter any other gains or losses reported on Schedule 1 (Form 1040), line 4, or Form 1041, line 7 modified for any Kentucky/federal differences. 740-NP Filers enter amount from 740-NP, page 4, line 9, Column B. Part III—Limitation on Losses Line 5—740 Filers enter any supplemental income or loss reported on Schedule E, such as income from rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc. This is reported on Schedule 1 (Form 1040), line 5, or Form 1041, line 5 modified for any Kentucky/federal differences. 740-NP Filers enter amount from 740-NP, page 4, line 11, Column B. Line 14—Add lines 9 and 13. The resulting figure can be a positive or negative number. Line 6—740 Filers enter any farm income or loss reported on Schedule 1 (Form 1040), line 6, or Form 1041, line 6 modified for any Kentucky/federal differences. 740-NP Filers enter amount from 740-NP, page 4, line 12, Column B. Line 7—RESERVED Line 8—740 Filers enter any other trade or business income, gain or loss not reported on lines 1 through 7 that you reported on your tax return modified for Kentucky/federal differences. 42A461-K (10-23) Use Part III to apply the threshold limitation and figure the excess business loss. Line 16—If the resulting figure on this line is a negative amount, then it is your excess business loss. Although it is a loss, you will report the excess business loss adjustment as a positive number. 740 Filers will enter this amount on Schedule M, line 5 and 740-NP filers will enter this amount on the 740-NP, page 4, line 16. Enter as excess business loss. Your excess business loss from each year will be treated as a net operating loss carryover. This amount will be entered on the Schedule KNOL.
Form 461-K
More about the Kentucky Form 461-K Individual Income Tax TY 2023
We last updated the Limitation on Business Losses in February 2024, so this is the latest version of Form 461-K, fully updated for tax year 2023. You can download or print current or past-year PDFs of Form 461-K directly from TaxFormFinder. You can print other Kentucky tax forms here.
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| Form Code | Form Name |
|---|---|
| Form 740 | Kentucky Individual Income Tax Return |
| Income Tax Instructions | Form 740 Individual Full Year Resident Income Tax Instructions Packet |
| Schedule M (740) | Kentucky Federal Adjusted Gross Income Modifications |
| Form 740-ES | Estimated Income Tax Return |
| Schedule KW-2 | Kentucky Income Tax Withheld |
View all 130 Kentucky Income Tax Forms
Form Sources:
Kentucky usually releases forms for the current tax year between January and April. We last updated Kentucky Form 461-K from the Department of Revenue in February 2024.
About the Individual Income Tax
The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.
Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!
Historical Past-Year Versions of Kentucky Form 461-K
We have a total of three past-year versions of Form 461-K in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
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