Instructions For Form K-130/130as (Page 2 of 4) in pdf

LINE 8—NET INCOME BEFORE APPORTIONMENT:

LINE 16—KANSAS NET INCOME BEFORE BAD DEBTS

Add line 1 to line 6 and subtract line 7.

DEDUCTION: Subtract line 15 from line 14, enter result in line 16.

This amount is to be used by savings and loan associations to

(Financial institutions with net income derived totally from

compute their Kansas bad debt deduction.

Kansas sources should omit lines 9 through 13.)

LINE 17—SAVINGS AND LOAN BAD DEBTS DEDUCTION FOR

APPORTIONMENT AND ALLOCATION

KANSAS: Savings and loan associations shall be allowed as a

LINE 9—NONBUSINESS INCOME-TOTAL COMPANY: Enter on

deduction from net income, a reserve established for the sole

line 9 the total amount of nonbusiness net income everywhere that

purpose of meeting or absorbing losses.

is to be directly allocated.

If all of your activity is wholly within Kansas:

Business income is defined in the privilege tax law as all income

a. Multiply the amount shown on line 16 by 5% and enter the result

to the extent that it may be treated as apportionable business

on line 17; OR,

income under the constitution of the United States.

b. Enter on line 17 the actual amount of bad debt; OR,

Any taxpayer that claims nonbusiness income on the Kansas

c. Enter on line 17 a reasonable addition to Kansas reserve based

return is required to clearly demonstrate that the asset which

on past experience.

generated the income is not used in the general operations of the

If you use the single entity apportionment method (K-130AS) to

company and is not managed or controlled by the same people

determine income from Kansas sources:

who control the operations of the company. The taxpayer must

a. Multiply the amount shown on line 16 by 5% and enter the result

also submit a schedule as required below. If the taxpayer does not

on line 17; OR,

demonstrate that the income is nonbusiness and does not submit

b. Enter on line 17 the actual amount of Kansas bad debt. If you

the required schedule(s), the income will be considered to be

use this method you must multiply the apportionment percentage

business income by the Department of Revenue and the

(line 11, Form K-130) times the total corporation actual bad debt

Department will apportion that income as business income.

and enter the result on line 17, Form K-130; OR,

From the items of income directly allocated, there shall be

c. Enter on line 17 a reasonable addition to Kansas reserve

deducted the expenses related thereto. The term “expenses related

based on past experience. If you use this method you must

thereto”, as used in this paragraph, means any allowable deduction

determine the addition to reserve based upon total company.

or portion thereof directly attributable to such income and a ratable

You must then multiply the apportionment percentage (line

part of any other allowable deductions which cannot definitely be

11, Form K-130) times the total company amount and enter

allocated to some item or a class of income.

the result on line 17, Form K-130.

A schedule must be submitted with the return showing (1) the

gross income from each class of income being specifically allocated,

If you use the combined income method (K-131) to determine

(2) the amount of each class of related expenses together with an

income from Kansas sources:

explanation or computations showing how amounts were arrived

a. Multiply each individual corporation’s “Kansas net income before

at, (3) the total amount of the related expense for each income

bad debt deduction” (line 17, Schedule K-131) by 5% and enter

class, and (4) the net income for each income class. The schedules

each corporation’s result on line 18, Schedule K-131; OR,

should provide appropriate columns as set forth above for items

b. Enter on line 18 the actual amount of Kansas bad debt. If you use

specifically assigned to Kansas and also for items specifically

this method you must determine the actual bad debt of all entities

assigned outside Kansas. An explanation must also be attached

included in the combined group prior to apportionment. You must

to explain specifically why each item of income does not arise from

then multiply the apportionment percentage for each combined

transactions and activity in the regular course of the financial

entity (line 12, Schedule K-131) times the total bad debt of all entities

institution’s trade or business.

and enter the result on line 18, Schedule K-131; OR,

c. Enter on line 18 a reasonable addition to reserve based on past

LINE 10—APPORTIONABLE BUSINESS INCOME: Subtract line

experience. If you use this method you must determine the

9 from line 8. Enter result on line 10.

addition to reserve of all entities included in the combined group

LINE 11—AVERAGE PERCENT TO KANSAS: Enter the

prior to apportionment. You must then multiply the apportionment

applicable percentages in spaces A, B & C. Enter on line 11 the

percentage for each combined entity (line 12, Schedule K-131)

average percent from Form K-130AS, Part IV, line E.

times the total addition to reserve and enter the result on line

18, Schedule K-131.

LINE 12—AMOUNT TO KANSAS: Multiply line 10 by line 11. Enter

Corporations are reminded that if they are required to file a

result on line 12.

combined income method return in Kansas, all corporations in the

LINE 13—NONBUSINESS INCOME—KANSAS: Enter on line 13

group are required to use the same method to determine Kansas

the total amount of nonbusiness net income directly allocated to

bad debt deductions.

Kansas. Submit a schedule to support the amount shown.

LINE 18—COMBINED REPORT OR ALTERNATIVE/SEPARATE

NET INCOME

ACCOUNTING INCOME: If you are filing a combined report (Schedule

LINE 14—KANSAS NET INCOME BEFORE NOL DEDUCTION: Enter

K-131) or you are authorized to file using the alternative or separate

on line 14 the appropriate amount of Kansas net income as follows:

accounting method, enter on line 18 the:

If income was derived wholly within this state, enter the amount

Kansas Taxable Income from line 19 of Schedule K-131

from line 8 above; OR

(Combined Income Method of Reporting); OR,

If income was derived both within and without this state and the

Kansas taxable income from a separate schedule prepared by

corporation is allocating and apportioning income based on

you (Separate/Alternative method of reporting).

separate company factors, add lines 12 and 13. Enter result on

LINE 19—KANSAS TAXABLE INCOME: Subtract line 17 from

line 14.

line 16. Enter result on line 19 or enter line 18, as applicable.

LINE 15—KANSAS NET OPERATING LOSS DEDUCTION: Enter

the amount of your Kansas net operating loss carry forward.

LINE 20—NORMAL TAX: Multiply the amount shown on line 19

(Schedule required.)

by 2.25% and enter result on line 20.

Page 5

Instructions For Form K-130/130as Page 2

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