Instructions For Form K-67
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1INSTRUCTIONS FOR FORM K-67
GENERAL INSTRUCTIONS
SCHEDULE II: The net operating loss must be carried to the 5th year
preceding the year of the loss (Column B). If any loss remains, it is
carried to the 4th year preceding the year of the loss (Column C) and then
Kansas tax laws regarding net operating losses are in conformity with
to the 3rd year prior to the loss year (Column D), etc. The computations
the Federal net operating loss tax laws, so you must have a net operating
for Schedule II are essentially the same as those for Schedule I, with a
loss at the Federal level in order to have one at the Kansas level. In order
few exceptions. The excess nonbusiness deductions are not added back.
to have a Kansas net operating loss, you must have all of the following: 1)
Line 7a If the allowable portion of the charitable contributions shown
a Federal net operating loss; 2) Kansas income tax return (K-40) and
on the Federal itemized deductions have been increased, show the same
supporting schedules on file for the loss year; and 3) had income or loss
adjustment as shown on the Federal net operating loss claim on line 7a.
from Kansas sources or was a Kansas resident for at least part of the
Line 7b Enter the amount of the standard deduction allowance from
year the loss was incurred.
the carry back year.
Generally, a Kansas net operating loss must be carried forward or
Line 9 Add lines 1 through 7 to determine the modified taxable
backward in the same manner as the Federal net operating loss. This
income and enter the total on line 9 (cannot be less than zero).
means if you claimed the option to forego the carry back on the Federal
Line 10 This is the unused portion of the net operating loss.
return, you cannot file a Kansas net operating loss carry back claim. If a
Column B: If the loss exceeds modified taxable income, show the
net operating loss was incurred in a taxable year beginning after
difference on line 10a. Column C: If the loss exceeds modified taxable
December 31, 1987, the loss may ONLY be carried forward 10 taxable
income, show the difference on 10b. Column D: If the loss exceeds
years. Form CRF, Kansas Net Operating Loss Carry Forward, must be
modified taxable income, show the difference on 10c. Column E: If the
completed.
loss exceeds modified taxable income, show the difference on 10d.
For net operating farm losses [as defined by 26 U.C.S. 172(i)] incurred
Column F: If the loss exceeds modified taxable income, show the
in taxable years beginning after December 31, 1999, a net operating loss
difference on 10e.
deduction is allowed under Kansas law in the same manner that it is
Line 11 If the loss in Column F exceeds the modified income, the
allowed under the Federal internal revenue code except that such net
remainder is shown on line 11 and must be carried forward (the carry
operating loss may be carried forward to each of the 10 taxable years
forward is limited to 10 years).
following the taxable year of the net operating loss. Furthermore, said net
operating farm losses (those incurred in taxable years beginning after
SCHEDULE III: Columns G, I, K, M and O are brought directly to
December 31, 1999) may be carried back five taxable years.
Schedule III from the carry back year returns UNLESS there has been a
If there was a change in marital status (divorce, marriage, or death of
prior amendment or adjustment, in which case the amounts entered
one of the spouses) between the year of the loss and any of the years to
should be those on the last amendment or adjustment. Columns H, J, L,
which the loss is carried, see instructions for Schedule IV.
N and P are designed to show how these items would change after the
loss is applied. The amounts on Schedule II, lines 10(a), 10(b), 10(c),
LINE-BY-LINE INSTRUCTIONS
10(d), and 10(e) will be the amounts used for the corresponding year on
Schedule III, line 13, Columns H, J, L, N and P.
There are three basic steps involved in a net operating loss carry back:
STEP 1 is computing the amount of the loss allowable for carry back;
SCHEDULE IV: This schedule is used when there is a change in marital
STEP 2 is determining how much of the allowable loss will be carried
status between year of the loss and any of the years to which the loss is
back to each year; and, STEP 3 is applying the correct amount of loss to
to be carried. The net operating loss of one spouse normally cannot be
each year to determine the resulting refund. Each step corresponds to a
applied to the income of the other spouse; therefore, it is necessary to
schedule on this form.
determine what portion of the jointly filed return applies to the spouse who
sustained the loss. There are two situations, which are exceptions to the
SCHEDULE I:
rule.
Column A
Line 1 Enter the Kansas taxable income from the loss year. This
Situation 1 The taxpayer was married in the loss year, one spouse
amount will be a negative figure (Line 7, K-40).
had net operating loss but the other spouse did not, and the prior years
Line 2 If you have any prior year net operating loss included in the
were filed on a single or married filing separate basis. In this situation,
adjusted gross income, enter this amount on line 2.
Since you are
the spouse who had no net operating loss may file jointly with the spouse
reducing the allowable loss shown on line 1 by the amounts shown on
who had a net operating loss, but the loss can only be carried back to the
succeeding lines, the amount entered will be a positive figure.
income of the spouse who sustained the loss.
In this situation, you
Line 3 Enter the same capital loss that was computed on your
should complete lines 36 through 48 to verify that both spouses do have a
Federal net operating loss claim as a positive figure.
loss.
Line 4 Enter the portion of the Federal long-term capital gains
Situation 2 A joint return is filed with the same spouse on both the
excluded from income.
Line 5 Enter the amount of the personal exemption allowance
loss year and all the years to which the loss is carried. In this situation do
claimed on the Kansas return.
not complete Schedule IV.
Line 6 Enter the amount of the Kansas nonbusiness deductions in
NONRESIDENTS: For years after December 31, 1977, a nonresident
excess of Kansas nonbusiness income. Note that although the same
must determine the net operating loss as though he were a Kansas
method is used to compute this as is used to compute Federal net
resident. The information shown on the nonresident allocation percentage
operating loss, income (i.e. municipal and Federal bonds, etc.) and
schedule is NOT used to determine a Kansas net operating loss. Please
deductions (i.e. itemized deductions or standard deductions, etc.) are not
read the general instructions and the instructions for completing the Form
the same on the Federal return as on the Kansas return, therefore, the
K-67 above before completing your nonresident Kansas return.
Kansas net operating loss in some cases will be a different amount.
Line 8 Reduce the loss on line 1 by the total of lines 2 through 6. If
REFUND CARRYOVER:
Net operating losses may be exhausted
the answer is a negative figure, this will be your Kansas net operating
before Taxpayers receive all tax refunds due to the $1,500 per year
loss. Carry the net operating loss from line 8 to line 10a, Column B,
refund limitation. Use Schedule III, Line 35, Columns G, I, K, M and O to
Schedule II and also, to line 13, Column H, Schedule III.
report these refund carryovers.
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