Instructions For Form K-67
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1INSTRUCTIONS FOR FORM K-67
SCHEDULE II: Enter the Carry Back years in Columns B, C, D, E & F
GENERAL INSTRUCTIONS
(if the Loss Year is 2001 IN Column A, Column B will be 1996,
Kansas tax laws regarding net operating losses are in conformity
Column C will be 1997, Column D will be 1996, etc.)
The net
with the Federal net operating loss tax laws, so you must have a net
operating loss must be carried to the 5th year preceding the year of
operating loss at the Federal level in order to have one at the Kansas
the loss (Column B). If any loss remains, it is carried to the 4th year
level. In order to have a Kansas net operating loss, you must have all
preceding the year of the loss (Column C) and then to the 3rd year
of the following: 1) a Federal net operating loss; 2) Kansas income tax
prior to the loss year (Column D), etc. The computations for Schedule
return (K-40) and supporting schedules on file for the loss year; and 3)
II are essentially the same as those for Schedule I, with a few
had income or loss from Kansas sources or was a Kansas resident for
exceptions. The excess nonbusiness deductions are not added back.
Line 7a If the allowable portion of the charitable contributions
at least part of the year the loss was incurred.
shown on the Federal itemized deductions have been increased,
Generally, a Kansas net operating loss must be carried forward or
show the same adjustment as shown on the Federal net operating
backward in the same manner as the Federal net operating loss. This
loss claim on line 7a.
means if you claimed the option to forego the carry back on the
Line 9 Add lines 1 through 7 to determine the modified taxable
Federal return, you cannot file a Kansas net operating loss carry back
income and enter the total on line 9 (cannot be less than zero).
claim. If a net operating loss was incurred in a taxable year beginning
Line 10 This is the unused portion of the net operating loss.
after December 31, 1987, the loss may ONLY be carried forward 10
taxable years.
Form CRF, Kansas Net Operating Loss Carry
Column B: If the loss exceeds modified taxable income, show the
Forward, must be completed.
difference on line 10a. Column C: If the loss exceeds modified
For net operating farm losses [as defined by 26 U.C.S. 172(i)]
taxable income, show the difference on 10b. Column D: If the loss
incurred in taxable years beginning after December 31, 1999, a net
exceeds modified taxable income, show the difference on 10c.
operating loss deduction is allowed under Kansas law in the same
Column E: If the loss exceeds modified taxable income, show the
manner that it is allowed under the Federal internal revenue code
difference on 10d. Column F: If the loss exceeds modified taxable
except that such net operating loss may be carried forward to each of
income, show the difference on 10e.
the 10 taxable years following the taxable year of the net operating
Line 11 If the loss in Column F exceeds the modified income,
loss. Furthermore, said net operating farm losses (those incurred in
the remainder is shown on line 11 and must be carried forward (the
taxable years beginning after December 31, 1999) may be carried
carry forward is limited to 10 years).
back five taxable years.
SCHEDULE III: Columns G, I, K, M and O are brought directly to
If there was a change in marital status (divorce, marriage, or death
of one of the spouses) between the year of the loss and any of the
Schedule III from the carry back year returns UNLESS there has been
years to which the loss is carried, see instructions for Schedule IV.
a prior amendment or adjustment, in which case the amounts entered
should be those on the last amendment or adjustment. Columns H, J,
L, N and P are designed to show how these items would change after
LINE-BY-LINE INSTRUCTIONS
the loss is applied. The amounts on Schedule II, lines 10(a), 10(b),
There are three basic steps involved in a net operating loss carry
10(c), 10(d), and 10(e) will be the amounts used for the corresponding
back: STEP 1 is computing the amount of the loss allowable for carry
year on Schedule III, line 13, Columns H, J, L, N and P.
back; STEP 2 is determining how much of the allowable loss will be
carried back to each year; and, STEP 3 is applying the correct amount
SCHEDULE IV: This schedule is used when there is a change in
of loss to each year to determine the resulting refund. Each step
marital status between year of the loss and any of the years to which
corresponds to a schedule on this form.
the loss is to be carried.
The net operating loss of one spouse
normally cannot be applied to the income of the other spouse;
SCHEDULE I:
therefore, it is necessary to determine what portion of the jointly filed
return applies to the spouse who sustained the loss. There are two
Column A
situations, which are exceptions to the rule.
Line 1 Enter the loss year (2001 if the loss occurred in tax year
Situation 1 The taxpayer was married in the loss year, one
2001) in Column A. Enter the Kansas taxable income from the loss
year. This amount will be a negative figure (Line 7, K-40).
spouse had net operating loss but the other spouse did not, and the
Line 2 If you have any prior year net operating loss included in
prior years were filed on a single or married filing separate basis. In
the adjusted gross income, enter this amount on line 2. Since you are
this situation, the spouse who had no net operating loss may file
reducing the allowable loss shown on line 1 by the amounts shown on
jointly with the spouse who had a net operating loss, but the loss can
succeeding lines, the amount entered will be a positive figure.
only be carried back to the income of the spouse who sustained the
Line 3 Enter the same capital loss that was computed on your
loss. In this situation, you should complete lines 36 through 48 to
Federal net operating loss claim as a positive figure.
verify that both spouses do have a 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
excluded from income.
the loss year and all the years to which the loss is carried. In this
Line 5 Enter the amount of the personal exemption allowance
situation do not complete Schedule IV.
claimed on the Kansas return.
Line 6 Enter the amount of the Kansas nonbusiness deductions
NONRESIDENTS: For years after December 31, 1977, a
in excess of Kansas nonbusiness income. Note that although the
nonresident must determine the net operating loss as though he were
same method is used to compute this as is used to compute Federal
a Kansas resident. The information shown on the nonresident
net operating loss, income (i.e. municipal and Federal bonds, etc.)
allocation percentage schedule is NOT used to determine a Kansas
and deductions (i.e. itemized deductions or standard deductions, etc.)
net operating loss. Please read the general instructions and the
are not the same on the Federal return as on the Kansas return,
instructions for completing the Form K-67 above before completing
therefore, the Kansas net operating loss in some cases will be a
your nonresident Kansas return.
different amount.
Line 8 Reduce the loss on line 1 by the total of lines 2 through 6.
REFUND CARRYOVER: Net operating losses may be exhausted
before Taxpayers receive all tax refunds due to the $1,500 per year
If the answer is a negative figure, this will be your Kansas net
refund limitation. Use Schedule III, Line 35, Columns G, I, K, M and O
operating loss. Carry the net operating loss from line 8 to line 10a,
Column B, Schedule II and also, to line 13, Column H, Schedule III.
to report these refund carryovers.
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