Partnership Or S Corporation Income Return K 120S (Rev. 8 10) 120s10
User Manual: 120S
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File Electronically! See page 2.
2010
KANSAS Partnership
or
SCorporation Tax
WAIT! Before you file a paper return,
consider this ...
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electronically because the system does the math for you.
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return than to process a return filed electronically.
¡ If you are expecting a refund, you will can it much faster with
electronic filing.
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that the department received your return because you get
immediate confirmation when it’s filed.
Join the 86% of taxpayers that filed their Kansas income taxes
electronically last year – it improves processing, saves time, and
reduces costs.
See back cover
for your electronic
filing options.
Visit us at
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the most up-to-date
electronic filing
information.
In This Tax Booklet
General Information ....................... 2 Form K-120S AS ..........................14
Line Instructions (K-120S) ............ 6 Form K-121S .................................16
Line Instructions (K-120S AS) ....... 9 File Electronically!............ back cover
Form K-120S .................................12 Taxpayer Assistance .......
back cover
GENERAL INFORMATION
If any due date falls on a Saturday, Sunday, or legal holiday, substitute the next regular workday.
Who Must
File a
Return
A Kansas corporation return must be filed by all corporations doing business within or deriving income from
sources within Kansas who are required to file a federal income tax return, whether or not a tax is due. Corporations
which elect under subchapter S of the Internal Revenue Code not to be taxed as a corporation must file a Kansas
Partnership or S Corporation Return (Form K-120S). All other corporations must file a Form K-120.
Banks and savings and loan associations allowed to file as small business corporations at the federal level
are not allowed to file as small business corporations at the Kansas level. Those entities are required to file a
Privilege Tax return (K-130) to report any income or loss. The federal level shareholders income or loss which is
included in their individual federal income tax return is to be subtracted from federal adjusted gross income so as
to not allow that income.
A partnership return (Form K-120S) must be completed by any business partnership, syndicate, pool, joint
venture or other such joint enterprise to report income from operations. The Kansas partnership return must be
completed by every enterprise that has income or loss derived from Kansas sources regardless of the amount of
income or loss. Income or loss derived from Kansas sources includes income or loss attributed to:
a. Any ownership interest in real property or tangible personal property located in Kansas and intangible
property to the extent it is used in a trade, business, profession or occupation carried on in Kansas; and,
b. A trade, business, profession or occupation carried on in Kansas.
Any partnership, joint venture, syndicate, etc., required to file a partnership return of income for federal purposes
is required to file a Kansas partnership return if such enterprise receives income or loss from Kansas sources.
When to
File
The due date
for filing 2010
calendar year returns
is April 18, 2011.
Kansas follows the
IRS for income tax
deadlines.
Calendar Year: If your return is based on a calendar year, it must be filed no later than April 18, 2011.
Fiscal Year: If your return is based on a tax year other than a calendar year, it must be filed no later than the 15th
day of the fourth month following the end of your tax year.
Conformity to Federal Due Dates: Kansas small business returns are due on or before the 15th day of the
fourth month following the close of the taxable year. The close of the taxable year is the same as the close of the
taxable year for federal income tax purposes. If the federal original due date is not the 15th day of the third month
after the close of a taxable year for corporations or the 15th day of the fourth month after the close of a taxable year
for partnerships, complete item “J” on the front of Form K-120S, and enclose a letter indicating the authorizing
federal statute. Do not enter your extended due date.
Amended Returns: If the amended return will result in a refund, then it must be filed within three (3) years from
the date the original return was due including any extension allowed pursuant to law, or two (2) years from the
date the tax claimed to be refunded or against which the credit claimed was paid, whichever of such periods
expires later.
Where to Mail your return to: KANSAS S CORPORATION TAX, KANSAS DEPARTMENT OF REVENUE, 915 SW HARRISON
STREET, TOPEKA, KS 66699-4000.
File
Page 2
Income tax information disclosed to KDOR, either on returns or through department investigation, is held
Confidential in strict confidence by law. KDOR, the Internal Revenue Service, the Multi-state Tax Commission, and
Information several other states have an agreement under which some tax information is exchanged. This is to verify
accuracy and consistency of information reported on federal and Kansas tax returns.
A taxpayer’s taxable year is the same as the taxable year for federal tax purposes. If a taxpayer’s taxable
Accounting year is changed, or the method of accounting is changed for federal tax purposes, then the taxable year and
Period method of accounting shall be similarly changed for Kansas tax purposes.
Federal Return
and Other
Enclosures
Enclose with Form K-120S:
Pages 1 through 4 of the Federal Form 1120S or pages 1 through 5 of the Federal Form 1065, as
filed with the Internal Revenue Service.
Federal schedules to support any Kansas modifications claimed on page 1.
Credit schedules and the required attachments to support pass-through activities.
An organizational chart showing all partnerships/S Corps and taxable entities that have income
that flows into this entity or flows from this entity.
Be sure to keep copies of all tax documents associated with your return as KDOR reserves the right to
request additional information as necessary.
Extension of
Time to File
If you are unable to complete your return by the filing deadline, you may request an extension of time to file.
If you filed federal form 7004 with the Internal Revenue Service for an extension of time, enclose a copy of that
form with your completed K-120S to
automatically
receive a five-month extension (for Partnerships) or a
six-month extension (for S-Corporations) to file your Kansas return. Kansas does not have a separate
extension request form. If you are entitled to a refund, an extension is not required in order to file the return
after the original due date.
Important: An extension of time to file Form K-120S does not extend the time for filing a partner’s or
shareholder’s Kansas Individual Income Tax return (Form K-40).
Business
Income
Election
Taxpayers may elect to have all income derived from the acquisition, management, use, or disposition of
tangible and intangible property treated as business income. The election is effective and irrevocable for the
taxable year of the election and the following nine taxable years. The election is binding on all members of
a unitary group of corporations. To make this election, an entity must file Form K-120EL with KDOR within the
time limits established by law for its filing situation.
An entity not previously doing business in Kansas that intends to make this election for its initial
year of business must file Form K-120EL within 60 days after filing the articles of incorporation or
application for authority to engage in business with the Kansas Secretary of State.
For an entity currently doing business in Kansas, the election must be filed on or before the last day
of the tax year immediately preceding the tax year for which the election is made.
Form K-120EL must be sent separately from the K-120S return.
Partnership
Adjustments
and Other
Information
to Partners
Kansas income tax law provides that partners receiving income from a partnership or corporation may be
required to make certain adjustments to their share of the entity’s income included in their individual federal
income tax return in order to properly determine their individual Kansas adjusted gross income. This
modification can only be made from information available to the partnership, thus it is necessary that each
partnership notify each partner of his share of the adjustments. In addition to the adjustments, information
regarding income not included in ordinary partnership income must be given to each partner.
NOTE: Each partner or shareholder should be notified of the gross of such income received by the
partnership or corporation, each partner’s or shareholder’s share of such income, the total adjustments
applicable and each partner’s or shareholder’s share of such adjustment.
Information given to the partners receiving income should also include the partner’s share of the Kansas
and everywhere property, payroll and sales factors of the partnership making the distribution. This information
is necessary so the partner receiving the distribution can include those factors with their Kansas and
everywhere property, payroll and sales factors in order to properly apportion income to Kansas in their
returns when filed.
You must file an amended Kansas return when an error was made on your Kansas return or there is a
Amended change (error or adjustment) on another state’s return or on your federal return.
Returns To amend your Kansas Partnership or S Corporation return, mark the “Amended Return” checkbox on the
front of the K-120S and insert the changes on the return. Include a copy of the other state’s amended return or
a copy of the IRS amended return or Revenue Agent’s Report or adjustment letter showing the adjustments.
AMENDED FEDERAL RETURN: If you are filing an amended federal income tax return for the same taxable
Page 3
Amended
Returns
(continued)
year as your Kansas amended return, enclose a complete copy of the amended federal return and full
explanations of all changes made on your amended Kansas return. If your amended federal return is adjusted
or disallowed, you must provide the department with a copy of the adjustment or denial letter.
If you did not file a Kansas return when you filed your original federal return, and the federal return has since
been amended or adjusted, use the information on the amended or adjusted federal return to complete your
original Kansas return. A copy of both the original and amended federal returns should be enclosed with the
Kansas return along with an explanation of the changes.
FEDERAL AUDIT: Any taxpayer whose income has been adjusted by the Internal Revenue Service must file an
amended return with Kansas and include a copy of the Revenue Agent’s Report or adjustment letter showing
and explaining the adjustments. These adjustments must be submitted within 180 days of the date the federal
adjustments are paid, agreed to, or become final, whichever is earlier. Failure by the taxpayer to notify KDOR
within the 180 day period shall not bar KDOR from assessing additional taxes or proceeding in court to collect
such taxes. Failure by the taxpayer to comply with the requirements for filing returns shall toll the periods of
limitation for KDOR to assess or collect taxes.
Any adjustment, provided by Kansas law, which applies to a capital gain received by the partnership or
Capital corporation and reported by the individual partners or shareholders on their individual federal income tax return,
Gains is to be made by each partner or shareholder on his Kansas individual income tax return.
If, during the taxable year, the partnership or corporation received a gain from the sale of property or other
capital assets for which the tax basis for Kansas is higher than the tax basis for federal, each partner or
shareholder must be notified of his share of the difference in basis and whether the gain qualified as a long or
short term capital gain.
Any partnership or corporation which has a partner or shareholder who is a nonresident of Kansas must
advise such partner of those capital gains and losses incurred from assets located in Kansas because the
nonresident partner or shareholder is subject to tax on gains realized from the sale or exchange of property
located in Kansas.
If such computations result in a net capital loss to Kansas, the loss is limited to $3,000 ($1,500 for married
individuals filing separate returns) on the partner’s or shareholder’s Kansas individual income tax return.
Capital transactions from Kansas sources to which the above instructions apply include: a) Capital gains or
losses derived from real or personal property having an actual situs within Kansas whether or not connected
with the trade or business; b) capital gains or losses from stocks, bonds and other intangible property used in
or connected with a business, trade or occupation that is carried on within Kansas; and, c) respective portion
of the partnership or corporate capital gain or loss from a partnership or corporation of which the partnership or
shareholder is a member, partner or shareholder, or an estate or trust of which the partnership or corporation is
a beneficiary. See instructions for
Part III - Apportionment Formula
.
Nonresident
Owner
Withholding
Partnerships, S corporations and limited liability companies with nonresident owners are required to withhold
Kansas income tax at the rate of 6.45% on the Kansas taxable income (whether distributed or undistributed) of
their nonresident partners, members or shareholders. Pass-through entities with nonresident owners must
complete Form KW-7/KW-7S and pay the withheld funds on or before the due date of the income tax return for the
pass-through entity, including extensions. These forms and additional information about this requirement are
available from our web site at ksrevenue.org.
Business Income. For tax years commencing after December 31, 2007, “business income” means: 1)
Definitions Income arising from transactions and activity in the regular course of the taxpayer’s trade or business; 2)
income arising from transactions and activity involving tangible and intangible property or assets used in the
operation of the taxpayer’s trade or business; or 3) income of the taxpayer that may be apportioned to this state
under the provisions of the Constitution of the United States and laws thereof, except that a taxpayer may elect
that all income constitutes business income. Business income is apportioned to Kansas generally using the
average of the three factors of property, payroll, and sales. For instance, business income received from another
partnership is included in your apportionable income and your share of that partnership is multiplied times the
property, payroll and sales both in Kansas and everywhere of that partnership to add to your entity’s property,
payroll and sales both in Kansas and everywhere. The apportionable income is then multiplied by the resulting
factor. Any deviation from using the three factor method requires alternative qualifications. All the apportionment
methods are listed in this section.
K.S.A. 79-3279 provides that the use of the three-factor method formula of property, payroll, and sales be
used to apportion income to Kansas. Direct or segregated accounting methods will not be allowed unless the
taxpayer has petitioned the Secretary of Revenue for use of direct or segregated accounting, and the petition is
approved. Direct or segregated accounting will not be allowed only because that is the method used in another
state or because partnership income is received from other entity.
Unitary Business. A multistate business is unitary when the operations conducted in one state benefit or are
benefited by the operations conducted in another state or states. The essential test to be applied is whether or not
the operation of the portion of the business within the state is dependent upon or contributory to the operation of
the business outside the state. If there is such a relationship, the business is unitary. Stated another way, the test
Page 4
Definitions
(continued)
All small business
corporations filing
a combined return
(single or multiple)
must complete lines
1 through 18 of Form
K-120S using the
total combined
income column from
Schedule K-121S.
is whether various parts of a business are interdependent and of mutual benefit so as to form one business rather
than several business entities and not whether the operating experience of the parts are the same at all places.
Activity Wholly Within Kansas. If a particular trade or business is carried on exclusively within Kansas or if
the activities outside of Kansas are such that federal Public Law 86-272 prohibits another state from imposing
a tax, then the entire net income is subject to the Kansas Income Tax. If two or more corporations file Federal
Income Tax returns on a consolidated basis, and if each of such corporations derive all of their income and
expenses from sources within Kansas, they must file a consolidated return for Kansas Income Tax purposes.
Single Entity Apportionment Method. Any taxpayer having income from business activity which is taxable
both within and without this state, other than activity as a financial organization or the rendering of purely
personal services by an individual, shall allocate and apportion net income as provided in the Uniform Division
of Income for Tax Purposes Act.
Combined Income Method—Single Corporate Filing. When a group of corporations conduct a unitary business
both within and outside of Kansas, the source of income shall be determined by the “combined income approach.”
This approach is the computation by formula apportionment of the business income of a unitary trade or
business properly reportable to Kansas by members of a unitary group. The property, payroll, or sales factor for
each member of a unitary business shall be determined by dividing the property, payroll, or sales figure for
Kansas by the total property, payroll, or sales figure of the entire group. The average is multiplied by the income
of the unitary group to determine the income of the company derived from sources in Kansas.
The Kansas S Corporation return filed on the combined income approach must include Schedule K-121S,
which can be found in this booklet.
Any small business corporation which files a consolidated return for federal purposes and a combined
report for Kansas purposes must submit a copy of the consolidated federal Form 1120S and all other schedules
and statements necessary to support the federal ordinary income reported on the Kansas return. Schedule
K-121S must be used to determine income of the small business corporation. Schedule K-121S single entity
Kansas income is then shown on line 18, Form K-120S.
Combined Income Method—Multiple Corporation Filing. This method is the same as ‘Combined Income
Method—Single Corporation Filing’ except that any corporation filing using the combined income method with
more than one entity doing business in Kansas may file the Kansas return reporting the total combined income
on that return. Schedule K-121S must be used to determine the Kansas taxable income of each separate
corporation. Schedule K-121S combined Kansas income is then entered on line 18 of Form K-120S.
Qualified Elective Two-Factor Method. This method may be used by any taxpayer who qualifies and elects to
utilize the two-factor formula of property and sales. A qualified taxpayer is any taxpayer whose payroll factor for
a taxable year exceeds 200% of the average of the property factor and the sales factor. An election must be made
by including a statement with the original tax return indicating the taxpayer elects to utilize this apportionment
method. It will be effective and irrevocable for the taxable year of the election and the following nine taxable years.
Common Carrier Method. All business income of railroads and interstate motor carriers of persons or
property for-hire shall be apportioned to this state on the basis of mileage. For railroads, multiply the business
income by a fraction, the numerator of which is the freight car miles in this state and the denominator of which
is the freight car miles everywhere. For interstate motor carriers, multiply the business income by a fraction, the
numerator of which is the total number of miles operated in this state and the denominator of which is the total
number of miles operated everywhere.
Alternative Accounting Method. If the uniform allocation and apportionment provisions do not represent
fairly the extent of the taxpayer’s business activity in this state, the taxpayer may petition for, or the Secretary of
Revenue may require, in respect to all or any part of the taxpayer’s business activity, if reasonable: (a) Separate
accounting; (b) the exclusion of one or more of the factors; (c) the inclusion of one or more additional factors; or
(d) the employment of any other method to effect an equitable allocation and apportionment of the taxpayer’s
income. A copy of the letter from KDOR granting the use of an alternative method must be enclosed with the
return when filed. Enter the amount determined on your separate schedule on line 18, Form K-120S.
Separate Accounting Method. The separate accounting method of reporting income to Kansas is allowable
only in unusual circumstances and with the permission of KDOR where the use of the three-factor formula does
not fairly represent the taxpayer’s business activity. Before a taxpayer engaged in a multistate business may
use the separate accounting method, the following requirements shall be satisfied:
The books and records are kept by recognized accounting standards to reflect accurately the amount of
income of the multistate business which was realized in Kansas during the taxable period;
The management functions of the business operations within Kansas are separate and distinct so that
in conducting the Kansas business operations the management within Kansas did not utilize or incur
centralized management services consisting of operational supervision, advertising, accounting,
insurance, financing, personnel, physical facilities, technical and research, sales and servicing or
purchasing during the taxable period;
The business operations within Kansas are separate and distinct and do not contribute to or depend
upon the overall operations of the company, and there are no interstate, intercompany, or interdivisional
purchases, sales or transfers during the taxable period.
If all three requirements are not satisfied, the taxpayer shall determine Kansas taxable income by use of the
apportionment formula. Enter the amount determined on your separate schedule on line 18, Form K-120S.
Page 5
LINE INSTRUCTIONS FOR FORM K-120S, PAGE 1
TAXPAYER INFORMATION
Beginning and Ending Dates: Enter beginning and ending
dates of the tax year, even if it is a calendar year.
Name and Address: PRINT or TYPE the name and address of
the entity.
EIN: Enter the Employer’s Identification Number.
Information for Items A through M: Complete all requested
information.
• A - Indicate whether the return is for a partnership or S
corporation. If federal form 1065 was filed, indicate a
partnership, if a federal form 1120S or other federal form
was filed, indicate an S corporation.
• B - Select a method to report income to Kansas. The methods
are described in the Definitions section on page 4.
• C - Enter the NAICS code from Publication KS-1500, available
from our web site: ksrevenue.org
• D - Enter the date the business began in Kansas.
• E - Enter the date the business was discontinued in Kansas,
if applicable. If a final return is being filed due to liquidation,
enter the date and also enclose a copy of the federal form
that states the applicable federal code section.
• F - Enter the two-letter abbreviation for the state of
incorporation and the date of that incorporation.
• G - Enter the two-letter abbreviation for the state of
commercial domicile.
• H - Enter the number of partners/shareholders that are listed
on Part II.
• I- Mark this box if there are any tax credit schedules or supporting
documentation enclosed with this return. If the credit is initiated
by this entity, enclose one credit schedule showing the total
amount of credit claimed for all partners/shareholders. If the
credit is passed to this entity from another entity, enclose one
credit schedule showing the proportionment share of credit
passed to this entity.
• J - Enter the original federal due date if other than the 15th day
of the 3rd month after the end of the tax year.
• K - Mark this box if any taxpayer information has changed
since the last return was filed in any boxes in this section
except for boxes H, I, L, or M.
• L - Mark this box if a K-40C (composite schedule) is filed for
this entity.
• M - Mark this box if a K-120EL is filed.
INCOME
LINE 1—FEDERAL ORDINARY INCOME: Enter the federal
ordinary income from federal Schedule K. A copy of certain pages
of the federal return must be enclosed in all cases. See
instructions on page 3. For partners using Federal Form 1065-B,
enter Line 1a from Form 1065-B, Schedule K.
LINE 2a—TOTAL OTHER INCOME FROM FEDERAL SCHEDULE
K: Enter the total of all other income listed on federal Schedule K.
For partners, this is the total of the amounts entered on lines 2,
3c, 4, 5, 6a, 7, 8, 9a, 10, and 11 of federal Schedule K. For partners
using federal Form 1065-B, this is the total of the amounts entered
on lines 1a, 2, 7 and 8 from Form 1065-B, Schedule K. For
S corporations it is the total of amounts entered on lines 2, 3c, 4,
5a, 6, 7, 8a, 9, and 10 of federal Schedule K. Also include any gain
from the sale of assets subject to section 179 that is not reported
on Schedule K.
LINE 2b—TOTAL DEDUCTIONS FROM SCHEDULE K: Enter the
allowable deductions listed on federal Schedule K. For
partnerships, this is the total of lines 12, 13b, 13c(2), and 13d of
federal Schedule K. For partners using Federal Form 1065-B, the
deductions are included in Line 2a above. For S corporations, this
is the total of lines 11, 12b, 12c(2), and 12d of federal Schedule K.
Contributions from Schedule K (Partnership, line 13a; or S
Corporation, line 12a) may be deducted on line 2b unless the
partner or shareholder is an individual. If the partner or shareholder
is an individual, and if they are itemizing deductions at the federal
level, the contribution deductions should already be in their federal
itemized deductions and no adjustment is necessary on the Kansas
individual return. If the partner or shareholder is included in a
composite return for Kansas (Schedule K-40C), they are required
to use a standard deduction and not entitled to their share of the
partnership or S corporation contribution deduction or their credits.
LINE 3—TOTAL: Add line 1 to line 2a and subtract line 2b. Enter
the result on line 3.
LINE 4—TOTAL STATE AND MUNICIPAL INTEREST: Enter interest
income received, credited, or earned by you during the taxable
year from any state or municipal obligations such as bonds and
mutual funds. Reduce the income amount by any related expenses
(such as management or trustee fees) directly incurred in
purchasing these state or political subdivision obligations.
DO NOT include interest income on obligations of the state of
Kansas or any Kansas political subdivision issued after December
31, 1987, or the following bonds exempted by Kansas law: Board
of Regents Bonds for Kansas Colleges and Universities, Electrical
Generation Revenue Bonds, Industrial Revenue Bonds, Kansas
Highway Bonds, Kansas Turnpike Authority Bonds and Urban
Renewal Bonds.
If you are a partner or shareholder in a fund that invests in both
Kansas and other states’ bonds, only the Kansas bonds are
exempt. Use the information provided by your fund administrator
to determine the amount of taxable (non-Kansas) bond interest to
enter here.
LINE 5—TAXES ON OR MEASURED BY INCOME OR FEES OR
PAYMENTS IN LIEU OF INCOME TAXES: Enter the taxes on or
measured by income or fees or payments in lieu of income taxes
which you deducted on your federal return in arriving at your federal
ordinary income.
LINE 6—OTHER ADDITIONS TO FEDERAL INCOME: Enter on
line 6 the following additions to your federal ordinary income:
• Learning Quest Education Savings Program. Enter the amount
of any “nonqualified withdrawal” from the Learning Quest
Savings Program.
A tax credit for the additions below may be claimed on your tax
return (schedule required):
• Community Service Contribution Credit. Enter the amount of
any charitable contribution claimed on your federal return used
to compute this credit on Schedule K-60.
• Disabled Access Credit. Enter the amount of any depreciation
deduction or business expense deduction claimed on your
federal return that was used to determine this credit on
Schedule K-37.
Page 6
• Regional Foundation Contribution Credit. Enter the amount
of any contribution claimed on your federal return used to
compute this credit on Schedule K-32.
• Small Employer Healthcare Credit. Reduce the amount of
expense deduction that is included in federal ordinary income
by the dollar amount of the credit claimed on Schedule K-57.
• Swine Facility Improvement Credit. Enter the amount of any
costs claimed on your federal return and used as the basis
for this credit on Schedule K-38.
• Expenditures - Energy Credits. Enter amount of any
expenditures claimed to the extent the same is claimed as
the basis for any credit allowed on Credit Schedule K-73, K-
77, K-78, K-79, K-80, K-81, K-82, or K-83.
• Amortization - Energy Credits. Enter the amount of any
amortization deduction claimed, to the extent the same is
claimed on the federal income tax form for deduction, with
regard to Credit Schedule K-73, K-77, K-78, K-79, K-82 or K-
83 and any amount claimed in determining federal adjusted
gross income on carbon dioxide recapture, sequestration or
utilization machinery and equipment, or waste heat utilization
system property.
LINE 7 — TOTALADDITIONS TO FEDERAL INCOME: Add lines
4 through 6 and enter the result on line 7.
LINE 8 — INTEREST ON U.S. GOVERNMENT OBLIGATIONS:
Enter any interest or dividend income received from obligations
or securities of any authority, commission or instrumentality of
the United States and/or its possessions that was included in
your federal ordinary income. This includes U.S. Savings Bonds,
U.S. Treasury Bills, and the Federal Land Bank. You must reduce
the interest amount by any related expenses (such as
management or trustee fees) directly incurred in the purchase of
these securities.
If you are a shareholder in a mutual fund that invests in both
exempt and taxable federal obligations, only that portion of the
distribution attributable to the exempt federal obligations may be
subtracted here. Enclose a schedule showing the name of each
U.S. Government obligation interest deduction claimed.
Interest from the following are taxable to Kansas and may
NOT be entered on this line:
Federal National Mortgage Association (FNMA)
Government National Mortgage Association (GNMA)
Federal Home Loan Mortgage Corporation (FHLMC)
LINE 9–IRC SECTION 78 AND 80% OF FOREIGN DIVIDENDS:
Enter the amount included in federal ordinary income pursuant to
the provisions of Section 78 of the Internal Revenue Code and
80% of dividends from corporations incorporated outside of the
United States or the District of Columbia which are included in
federal ordinary income.
LINE 10–OTHER SUBTRACTIONS FROM FEDERAL INCOME:
Enter a total of the following subtractions from your federal ordinary
income (schedule required):
• Refunds or Credits. Any refund or credit for overpayment of
taxes on or measured by income or fees or payments in lieu
of income taxes imposed by this state, or any taxing
jurisdiction, to the extent included in federal ordinary income.
• Jobs and WIN Tax Credit. The amount of federal targeted
jobs and WIN credit.
• Kansas Venture Capital, Inc. Dividends. Dividend income
received as a result of investing in stock issued by Kansas
Venture Capital, Inc.
• Electrical Generation Revenue Bonds. Enter the gain from
the sale of Electrical Generation Revenue Bonds that was
included in your federal ordinary income.
• Learning Quest Education Savings Program. Enter the
amount of contributions deposited in the Learning Quest
Education Savings Program, or a qualified 529 tuition program
established by another state, up to a maximum of $3,000 per
student (beneficiary).
• Sale of Kansas Turnpike Bonds. Enter the gain from the sale
of Kansas Turnpike Bonds that was included in your federal
ordinary income.
• Amortization – Energy Credits. The amount of amortization
deduction allowed relating to Credit Schedule K-73, K-77,
K-78, K-79, K-82 or K-83, and the amount of amortization
deduction allowed for carbon dioxide capture, sequestration
or utilization machinery and equipment, or waste heat utilization
system property.
LINE 11–TOTAL SUBTRACTIONS FROM FEDERAL INCOME: Add
lines 8 through 10, and enter the result on line 11.
LINE 12–NET INCOME BEFORE APPORTIONMENT:Add lines 3
and 7, then subtract line 11. Enter result on line 12.
APPORTIONMENT AND ALLOCATION
LINE 13–NONBUSINESS INCOME - TOTAL COMPANY: Enter on
line 13 the total amount of nonbusiness net income everywhere
that is to be directly allocated.
Nonbusiness Income Claimed: Any taxpayer that claims
nonbusiness income on the Kansas return is required to clearly
demonstrate that the transaction or activity which gave rise to the
income was unusual in nature and infrequent in occurrence or
that the income was earned in the course of activities unrelated
to the taxpayer’s regular business operations; or that the income
did not arise from transactions and activities involving tangible
and intangible property or assets used in the operation of the
taxpayer’s trade or business.
The taxpayer must also submit a schedule as required below.
If the taxpayer does not demonstrate that the income is
nonbusiness and does not submit the required schedule(s), the
income will be considered to be business income by the
Department of Revenue and the department will apportion that
income as business income.
From the items of income directly allocated, there shall be
deducted the expenses related thereto. As used in this paragraph,
“expenses related thereto,” means any allowable deduction or
portion thereof attributable to such income and a ratable part of
any other allowable deductions which cannot definitely be
allocated to some item or class of income.
A schedule must be submitted with the return showing: 1) the
gross income from each class of income being specifically
allocated, 2) the amount of each class of related expenses together
with an explanation or computations showing how amounts were
arrived at, 3) the total amount of the related expense for each
income class, and 4) the net income for each income class. The
schedules should provide appropriate columns as set forth above
for items specifically assigned to Kansas and for nonbusiness
items specifically assigned outside Kansas. An explanation must
also be enclosed to explain specifically why the income should
be classified as nonbusiness income.
Page 7
LINE 14–APPORTIONABLE BUSINESS INCOME: Subtract line
13 from line 12 and enter the result on line 14.
LINE 15–AVERAGE PERCENT TO KANSAS: Enter the applicable
percentages in spaces A, B, and C. If you are qualified and utilizing
the elective two-factor formula, do not enter a percentage figure in
space B. Enter on line 15 the average percent from Form K-120S
AS, Part III, line E. Note: Round the percentage to the fourth decimal
point only. If your business is wholly within Kansas enter 100.0000.
LINE 16–AMOUNT TO KANSAS: Multiply line 14 by line 15 and
enter the result on line 16.
LINE 17–NONBUSINESS INCOME-KANSAS: Enter the total
amount of nonbusiness net income directly allocated to Kansas.
Submit a schedule to support the amount shown.
LINE 18–TOTAL KANSAS INCOME: If you are filing a combined
report (Schedule K-121S) or you are authorized to file using the
alternative or separate accounting method, enter on line 18 the:
1) Kansas income from line 18 of Schedule K-121S; or, 2) Kansas
income from a separate schedule prepared by you (Separate/
Alternative Method of Reporting).
LINE 19–ESTIMATED TAX PAID AND AMOUNT CREDITED
FORWARD: If you filed a Form K-120 last year, enter the total of
your 2010 estimated tax payments plus any 2009 overpayment
you had credited forward to 2010.
LINE 20–OTHER TAX PAYMENTS: Enter on line 20 any amount
of prepaid tax not entered above. Do NOT enter KW-7 or KW-7S
withholding on this line.
LINE 21–REFUND: Add lines 19 and 20 and enter the result on
line 21. Amounts less than $5.00 will not be refunded. Before
mailing, mark an “X” in the refund box on the front of the envelope.
SIGNATURE AND VERIFICATION: The return must be signed
and sworn to by a member, partner, president, vice-president,
or other principal officer. If the return is prepared by a firm or
corporation, the return should be signed in the name of the
firm or corporation. Any person or persons who prepare the
return for compensation must also sign the return and provide
their EIN (Employer Identification Number) or SSN (Social
Security Number).
LINE INSTRUCTIONS FOR FORM K-120S, PAGE 2
PART I – ADDITIONAL INFORMATION
All entities must answer all questions in Part I.
PART II – PARTNER’S OR SHAREHOLDER’S
DISTRIBUTION OF INCOME
Part II must be completed for all partners or shareholders.
COLUMN 1—Name and address of partner or shareholder.
List the name and permanent address of each person who was
a partner of the partnership or shareholder of the corporation
during the taxable year. Check the box on the right side of column
1 if the respective partner or shareholder was a nonresident of
Kansas during the year.
COLUMN 2—Social Security Number (SSN) or Employer
Identification Number (EIN). Enter in column 2 the Social
Security or Employer Identification Number of each partner or
shareholder listed.
COLUMN 3—Partner’s or Shareholder’s Percent of Ownership.
Enter in column 3 the partner’s or shareholder’s percent of
ownership in the partnership or corporation.
COLUMN 4—Partner’s Profit Percent or Shareholder’s
Applicable Percentage. Enter in column 4 the partner’s profit
percentage or shareholder’s applicable percentage.
COLUMN 5—Income from Kansas sources.
Kansas Resident
Individuals:
Multiply column 4 by line 12, page 1.
Nonresidents
Individuals:
If income is earned only from Kansas sources multiply
column 4 by line 12, page 1. If income is earned from inside and
outside of Kansas, multiply column 4 by line 18, page 1.
All Other
Partners or Shareholders:
Multiply column 4 by line 18, page 1.
Enclose a schedule showing adjustments due to any
guaranteed payments.
COLUMN 6—Partner’s or Shareholder’s portion of federal
ordinary and other income (losses) and deductions. Multiply the
partner’s profit percent or applicable shareholder’s percentage in
column 4 by line 3, page 1.
COLUMN 7—Partner’s or Shareholder’s portion of total
Kansas income. Multiply the partner’s or shareholder’s percentage
in column 4 by line 12, page 1.
COLUMN 8—Partners or Shareholder’s modification. Subtract
column 7 from column 6 and enter the result in column 8. This
is the Kansas adjustment to be entered on Schedule S of the
Kansas Individual Income Tax return, Form K-40, as a partnership
or S corporation adjustment. If the amount in column 7 is greater
than column 6, the amount in column 8 should be shown as an
addition modification and entered on line A5 of Schedule S. If
the amount in column 7 is less than column 6, the amount in
column 8 should be shown as a subtraction modification and
entered on line A17 of Schedule S.
Nonresident Partner’s or Shareholders’ Computation
Nonresident partners or shareholders must use the following
method to determine the amounts that will be entered in Part B
of Supplemental Schedule S, Form K-40.
The taxpayer’s share of income to be entered on line B10
(Amount from Kansas Sources) is determined by multiplying
column 4, Part II, page 2, Form K-120S by line 12, page 1, Form
K-120S, if income is derived totally within Kansas; or line 18, if
income is derived within and outside of Kansas.
Since modifications for nonresident income are included in
line 18, Form K-120S, a modification relative to the S corporation
or partnership income is not to be entered on line B20, Part B
of Schedule S, Form K-40.
NOTE—Any difference in the basis of property sold which
has a higher basis for Kansas income tax purposes than for
federal income tax purposes and which is reported as a long-
term capital gain for Kansas purposes, should be computed
and reported to the respective shareholder or partner for
adjustment of this item on the individual income tax return. If
the basis of property sold has a lower basis for Kansas income
tax purposes than for federal income tax purposes, no
adjustment is necessary.
Page 8
INSTRUCTIONS FOR FORM K-120S AS
You must complete and enclose Part III, of Form 120S AS with
your Kansas return if the taxpayer is doing business within and
outside of Kansas and utilizing the apportionment formula to
determine Kansas income.
PART III—APPORTIONMENT FORMULA
Part III is to be used by corporations which derive income from
sources both within and without Kansas for the purpose of
allocating and apportioning income. All business income is
apportionable to Kansas by one of the following methods:
• The majority of taxpayers will multiply business income by a
fraction, the numerator of which is the property factor plus
the payroll factor plus the sales factor, and the denominator
of which is three.
• Railroads will multiply business income by a fraction, the
numerator of which is the freight car miles in this state and
the denominator of which is the freight car miles everywhere.
• Interstate motor carriers will multiply business income by a
fraction, the numerator of which is the total number of miles
operated in this state and the denominator of which is the
total number of miles operated everywhere.
• A qualifying taxpayer may elect to multiply business income
by a fraction, the numerator of which is the property factor
plus the sales factor, and the denominator of which is two. A
qualifying taxpayer is any taxpayer whose payroll factor for a
taxable year exceeds 200% of the average of the property
factor and the sales factor. For additional information relating
to this method and to determine if you are qualified, you may
review K.S.A. 79-3279. If you qualify to use this method you
are required to complete, for the first year, the payroll
information on Form 120S AS, Part III, line B or Form K-121S,
Part II, Section 2.
• Single Factor Apportionment – all years beginning after
12/31/01, and at the election of the taxpayer made at the
time of filing of the original return, the qualifying business
income of any investment funds service corporation
organized as a corporation or S corporation which maintains
its primary headquarters and operations or is a branch facility
that employs at least 100 individuals on a full-time equivalent
basis in this state and has any investment company fund
shareholders residenced in this state shall be apportioned
to this state as provided in this subsection, as follows:
By multiplying the investment funds service corporation’s
qualifying business income from administration, distribution
and management services provided to each investment
company by a fraction, the numerator of which shall be the
average of the number of shares owned by the investment
company’s fund shareholders residenced in this state at
the beginning of and at the end of the investment company’s
taxable year that ends with or within the investment funds
service corporation’s taxable year, and the denominator of
which shall be the average of the number of shares owned
by the investment company’s fund shareholders everywhere
at the beginning of and at the end of the investment
company’s taxable year that ends with or within the
investment funds service corporation’s taxable year.
Descriptions of each of the factors in the three-factor formula
follow. The laws applicable to these factors are contained in K.S.A.
79-3280 through K.S.A. 79-3287. The applicable regulations are
contained in K.A.R. 92-12-84 through K.A.R. 92-12-103. These
laws and regulations are the Policy Information Library at:
ksrevenue.org
LINE A—Property Factor. The property factor shall include all
real and tangible personal property owned or rented and used
during the income year to produce business income. Property
used in connection with the production of nonbusiness income
shall be excluded from the factor. Property shall be included in
the property factor if it is actually used or is available for or capable
of being used during the income year for the production of
business income. Property used in the production of business
income shall remain in the property factor until its permanent
withdrawal is established by an identifiable event such as its
sale or conversion to the production of nonbusiness income.
The numerator of the property factor shall include the average
value of the taxpayer’s real and tangible personal property owned
and used in Kansas during the income year for the production of
income, plus the value of rented real and tangible personal
property so used. Property owned by the taxpayer in transit between
locations of the taxpayer shall be considered to be at the
destination for purposes of the property factor. Property in transit
between a buyer and seller which is included by a taxpayer in the
denominator of its property factor in accordance with its regular
accounting practices shall be included in the numerator according
to the state of destination. The value of mobile or movable property,
such as construction equipment, trucks and/or leased electronic
equipment which are located within and without Kansas during
the income year, shall be determined for purposes of the
numerator of the factor on the basis of total time within Kansas
during the income year. Property owned by the taxpayer shall be
valued at its original cost. As a general rule, “original cost” is
deemed to be the basis of the property for federal income tax
purposes at the time of acquisition by the taxpayer and adjusted
by subsequent capital additions or improvements thereto and
partial disposition thereof, by reason of sale, exchange,
abandonment, etc. Property rented by the taxpayer is valued at
eight times the net annual rental rate. As a general rule, the
average value of property owned by the taxpayer shall be
determined by averaging the values at the beginning and ending
of the income year. However, the Director of Taxation may require
or allow averaging by monthly values if such method of averaging
is required to properly reflect the average value of the taxpayer’s
property for the income year.
LINE B—Payroll Factor. The payroll factor shall include the
total amount paid by the taxpayer for compensation during the tax
period. The total amount “paid” to the employees is determined
upon the basis of the taxpayer’s accounting method. If the
taxpayer has adopted the accrual method of accounting, all
compensation properly accrued shall be deemed to have been
paid. Notwithstanding the taxpayer’s method of accounting, at
the election of the taxpayer, compensation paid to employees
may be included in the payroll factor by use of the cash method if
the taxpayer is required to report such compensation under such
method for unemployment compensation purposes. The term
“compensation” means wages, salaries, commissions and any
other form of remuneration paid to employees for personal
services. Payments made to an independent contractor or any
other person not properly classifiable as an employee are
excluded. Only amounts paid directly to employees are included
in the payroll factor. The compensation of any employee on account
of activities which are connected with the production of
nonbusiness income shall be excluded from the factor. The
denominator of the payroll factor is the total compensation paid
everywhere during the income year.
The numerator of the payroll factor is the total amount paid in
Kansas during the income year by the taxpayer for compensation.
Page 9
Compensation is paid in Kansas if any one of the following tests,
applied consecutively, are met: (a) The employee’s service is
performed entirely within Kansas; (b) The employee’s service is
performed both inside and outside of Kansas, but the service
performed without this State is “incidental” to the employee’s
service in Kansas (the word “incidental” means any service which
is temporary or transitory in nature, or which is rendered in
connection with an isolated transaction); (c) If the employee’s
services are performed both inside and outside of Kansas, the
employee’s compensation will be attributed to Kansas if: (1) the
employee’s base of operations is in Kansas; or (2) there is no
base of operations in any state in which some part of the service
is performed, but the place from which the service is directed or
controlled is in Kansas; or (3) the base of operations or the place
from which the service is directed or controlled is not in any state
in which some part of the service is performed, but the employee’s
residence is in Kansas. The term “base of operation” is the place
from where employees begin work and to which they customarily
return in order to receive instructions from the taxpayer or
communications from his customers or other persons, or to
replenish stock or other materials, repair equipment, or perform
any other functions necessary to the exercise of their trade or
profession at some other point or points.
LINE C—Sales Factor. For purposes of the sales factor of the
apportionment formula, the term “sales” means all gross receipts
derived by the taxpayer from transactions and activity in the regular
course of such trade or business. The following are rules for
determining “sales” in various situations:
In the case of a taxpayer engaged in manufacturing and
selling or purchasing and reselling goods or products, “sales”
includes all gross receipts from the sales of such goods or
products (or other property of a kind which would properly be
included in the inventory of the taxpayer if on hand at the
close of the income year) held by the taxpayer primarily for
sale to customers in the ordinary course of its trade or
business. “Gross receipts” for this purpose means gross
sales, less returns and allowances, and includes all interest
income, service charges, carrying charges, or time-price
differential charges incidental to such sales. Federal and
state excise taxes (including sales taxes) shall be included
as part of such receipts if such taxes are passed on to the
buyer or included as part of the selling price of the product.
In the case of cost plus fixed fee contracts, such as the
operation of a government-owned plant for a fee, “sale”
includes the entire reimbursed cost, plus the fee.
In the case of a taxpayer engaged in providing services, such
as the operation of an advertising agency, or the performance
of equipment service contracts, or research and development
contracts, “sales” includes the gross receipts from the
performance of such services, including fees, commissions,
and similar items.
In the case of a taxpayer engaged in renting real or tangible
property, “sales” includes the gross receipts from the rental,
lease, or licensing the use of the property.
In the case of a taxpayer engaged in the disposition of non-
inventory assets and property used or purchased in the
regular course of business, “sales” includes the capital gain
or ordinary gain realized from such disposition. The term
“sales” does not include the return of capital or recovery of
basis with respect to non-inventory capital assets.
For all taxable years beginning after December 31, 2007, in
the case of sales of intangible business assets, only the net
gains from the sale shall be included in the sales factor.
The numerator of the sales factor shall include gross receipts
attributable to Kansas and derived by the taxpayer from
transactions and activity in the regular course of its trade or
business. All interest income, service charges, carrying charges,
or time-priced differential charges incidental to such gross
receipts shall be included regardless of the place where the
accounting records are maintained or the location of the contract
or other evidence of indebtedness.
Sale of Tangible Personal Property in this State
Gross receipts from sales of tangible personal property
(except sales to the United States Government) are in this
state if:
ythe property is delivered or shipped to a purchaser within
this state regardless of the f.o.b. point or other conditions
of sale;
ythe property is shipped from an office, store, warehouse,
factory, or other place of storage in this state and the
taxpayer is not taxable in the state of the purchaser.
Property shall be deemed to be delivered or shipped to a
purchaser within this state if the recipient is located in this
state, even though the property is ordered from outside this
state.
Property is delivered or shipped to a purchaser within this
state if the shipment terminates in this state, even though
the property is subsequently transferred by the purchaser to
another state.
The term “purchaser within this state” shall include the
ultimate recipient of the property if the taxpayer in this state,
at the designation of the purchaser, delivers to or has the
property shipped to the ultimate recipient within this state.
When property being shipped by a seller from the state of
origin to a consignee in another state is diverted while enroute
to a purchaser in this state, the sales are in this state.
If a taxpayer whose salesman operates from an office located
in this state makes a sale to a purchaser in another state in
which the taxpayer is not taxable and the property is shipped
directly by a third party to the purchaser, the following rules
apply:
yif the taxpayer is taxable in the state from which the third
party ships the property, then the sale is in such state;
yif the taxpayer is not taxable in the state from which the
property is shipped, then the sale is in this state.
Sales to the United States Government: Gross receipts from
the sales of tangible personal property to the United States
Government are to be included in Kansas if the property is shipped
from an office, store, warehouse, factory, or other place of storage
in this state. Only sales for which the United States Government
makes direct payment to the seller pursuant to the terms of its
contract constitute sales to the United States Government. Thus,
as a general rule, sales by a subcontractor to the prime contractor,
the party to the contract with the United States Government, does
not constitute sales to the United States Government.
Sales Other Than Sales of Tangible Personal Property: K.S.A.
79-3287 provides for the inclusion in the numerator of the sales
factor of gross receipts from transactions other than sales of
tangible personal property (including transactions with the United
States Government). Under this section gross receipts are
attributed to Kansas if the income-producing activity which gave
rise to the receipts is performed within Kansas or if property
producing the receipts is located within Kansas.
Page 10
Gross receipts are attributed to Kansas if, with respect to a
single item of income, the income-producing activity is performed
within and without Kansas but the greater proportion of the
income-producing activity is performed in Kansas, based on costs
of performance. In cases where services are performed partly
within and partly without Kansas, the services performed in each
state will usually constitute a separate income-producing activity;
in such case, the gross receipts for the performance of services
attributable to Kansas shall be measured by the ratio which the
time spent in performing such services in this state bears to the
total time spent in performing such services everywhere. Time
spent in performing services includes the amount of time
expended in the performance of a contract or other obligation
which gives rise to such gross receipts. Personal service not
directly connected with the performance of the contract or other
obligation, such as time expended in negotiating the contract, is
excluded from the computation.
LINE D(1)—TOTAL PERCENT. If you are utilizing the three-factor
formula to apportion income to Kansas, add lines A, B and C.
LINE D(2)—TOTAL PERCENT. If you are qualified and are
utilizing the elective two-factor formula to apportion income to
Kansas, add lines A and C.
LINE E—AVERAGE PERCENT. Divide line D(1) or D(2), whichever
is applicable, by the number of factors used in the formula. For
instance, if you are using the three-factor formula and the
corporation does not have payroll anywhere, divide by 2.
Consistency in Reporting
In completing Form K-120S, K-120S AS and K-121S, if, with
respect to prior tax years and to filing other states’ tax returns, the
taxpayer departs from or modifies the manner in which income
has been classified as business income from nonbusiness
income, in valuing property or of excluding or including property in
the property factor, in the treatment of compensation paid in the
payroll factor, or in excluding or including gross receipts in the
sales factor, the taxpayer shall disclose by separate enclosed
schedule the nature and extent of the variance or modification.
Only inconsistencies in the denominators of the property, payroll,
and sales factors which materially affect the amount of business
income apportioned to Kansas need to be disclosed.
Inconsistencies in the determination of nonbusiness income and
in the denominators of the factors due to a difference in state
laws or regulations must be identified by that state’s statute or
regulation section number and shown on the separate schedule.
The amount of each inconsistency by state is to be shown.
When a taxpayer makes sales of tangible personal property
which are shipped from Kansas and assigned to a state in which
the taxpayer does not file a return or report, the taxpayer shall
identify the state to which the property is shipped, report the total
amount of sales assigned to such state, and furnish the facts
upon which the taxpayer relies as establishing jurisdiction to tax
by such state.
PART IV—KANSAS PASS-THROUGH SCHEDULE
Complete this schedule if this entity receives passed through
distributions from another entity. For instance, if you own a 50%
interest in Partnership A and are required to report income and/or
expenses on your tax return, disclose the name, address, EIN,
principal product or service and whether or not Partnership A has
Kansas activity.
PART V—KANSAS QSUB/DISREGARDED ENTITY SCHEDULE
Complete this schedule if Qsub or disregarded entities are
included in this return
.
Page 11
K-121S KANSAS
(8/06) COMBINED INCOME METHOD OF REPORTING
For the taxable year beginning ________________ 20____ , ending _____________________, 20____
Employer Identification Number (EIN)
Name As Shown on Form K-120S
PART I KANSAS COMBINED NET INCOME
Enter separate corporate names and federal
identification numbers
Corporation A Corporation B Eliminations
(Explain Below) Combined Income
1. Federal ordinary income ..................................................................
2. Total other income (loss) and deductions from federal Schedule K
3. Total (Add lines 1 and 2) ..................................................................
4. Total state and municipal interest .....................................................
5. Taxes on or measured by income or fees or payments in lieu of
income taxes ...................................................................................
6. Other additions to federal taxable income (Enclose schedule) .....
7. Total (Add lines 3 through 6) ...........................................................
8. Interest on U.S. government obligations .........................................
9. IRC Section 78 and 80% of foreign dividends (Enclose schedule)
10. Other subtractions from federal taxable income (Enclose schedule)
11. Total subtractions (Add lines 8, 9, & 10) ........................................
12. Net income before apportionment (Subtract line 11 from line 7) ....
13. Nonbusiness income—Total company (Enclose schedule) ...........
14. Apportionable business income (Subtract line 13 from line 12) ....
15. Percent to Kansas (From line 6, Part II) ..........................................
16. Amount to Kansas (Line 15, Corp. A & B multiplied by line 14
combined income) ............................................................................
17. Nonbusiness income—Kansas (Enclose schedule) ......................
18. Combined report income (Add lines 16 and 17 and enter the result
on line 18, page 1, Form K-120S) ...................................................
EXPLANATION OF ELIMINATIONS:
(Any corporation filing using the combined income method with more than one entity doing business in Kansas may
file one Kansas return reporting the total Kansas combined income on that return.)
Page 16
PART II APPORTIONMENT FORMULA
(Form K-121S)
Corporation A
Within Kansas Corporation B
Within Kansas Total
Company Percent
Within
Kansas
Beg. of Year End of Year Beg. of Year End of Year Beg. of Year End of Year
1a.Value of owned real and tangible personal
property used in the business at original cost.
Inventory ............................................................
Depreciable Assets ...........................................
Land ....................................................................
Other Tangible Assets (Enclose schedule) ....
Less: Construction in Progress .......................
Total Property to be Averaged ...........................
Average Owned Property (Beg. + End ÷ 2)
1b. Net annual rental property. Multiplied by 8 ......
TOTAL PROPERTY .............................................
Percentage: Corporation A (Divide Corp. A by Total Co.)
Percentage: Corporation B (Divide Corp. B by Total Co.)
2. Wages, salaries, commissions and other compensation of
employees related to business income included in return.
TOTAL PAYROLL ..........................................................................
Percentage: Corporation A (Divide Corp. A by Total Co.)
Percentage: Corporation B (Divide Corp. B by Total Co.)
3. Sales (Gross receipts, less returns and allowances) .............
a. Sales delivered or shipped to purchasers in Kansas:
(1) Shipped from outside Kansas ........................................
(2) Shipped from within Kansas ...........................................
b. Sales shipped from Kansas to:
(1) The United States Government .......................................
(2) Purchasers in a state where the taxpayer would not be
taxable (e.g., under Public Law 86-272) .......................
c. Dividends .................................................................................
Interest ......................................................................................
Rents ........................................................................................
Royalties ..................................................................................
Gains/losses from intangible asset sales ...........................
Gross proceeds from tangible asset sales .........................
Other income (Enclose schedule) .......................................
TOTAL SALES ...............................................................................
Percentage: Corporation A (Divide Corp. A by Total Co.)
Percentage: Corporation B (Divide Corp. B by Total Co.)
1A
1B
2A
2B
3A
3B
4A
4B
5A
5B
6A
6B
4. Total Percent: Corporation A (Add lines 1A, 2A, & 3A)
Corporation B (Add lines 1B, 2B, & 3B) If utilizing three factor formula
5. Total Percent: Corporation A (Add lines 1A & 3A)
Corporation B (Add lines 1B & 3B) If qualified and utilizing two factor formula
6. Average Percent: Corporation A (To Part I, Line 15, Form K-121S)
Corporation B (To Part I, Line 15, Form K-121S) Average percent of line 4 or 5, whichever is applicable
Page 17
Page 18
PRSRT STD
U.S. POSTAGE
PAID
KANSAS DEPT.
OF REVENUE
File
Electronically!
Form K-120S for partnerships and
small business corporations can be
filed electronically through
IRS e-File. With IRS e-File, your return
is electronically submitted to the IRS
and KDOR (Kansas Department of
Revenue) using an authorized
provider.
Your Form K-120S can also be
electronically filed by using KDOR
approved commercial tax filing web
sites or software products.
Visit our web site at webtax.org
for a list of authorized IRS e-File
providers and software products.
Electronic filing is quick and easy and
within 48 hours of transmission you
will receive confirmation that KDOR
has accepted your return.
webtax.org
State of Kansas
Department of Revenue
Docking State Office Building, 915 SW Harrison St.
Topeka, KS 66612-1588
– TAX ASSISTANCE –
FILING ASSISTANCE. For assistance in completing your
Kansas Partnership or S Corporation Tax return, contact our
Taxpayer Assistance Center. Office hours are 8:00 a.m. to 4:45
p.m., Monday through Friday.
Taxpayer Assistance Center
Docking State Office Building - 1st floor
915 SW Harrison Street
Topeka, KS 66625-2007
Phone: (785) 368-8222
Fax: (785)291-3614
REQUEST FOR FORMS. If you choose to use paper to file
your return, be sure to use an original form printed by the Kansas
Department of Revenue (KDOR) or a form from an approved
software package (see our web site at ksrevenue.org). To obtain
a KDOR printed form, call the Taxpayer Assistance Center.
K-120S 2010 155010
(Rev. 8/10) KANSAS PARTNERSHIP or S CORPORATION INCOME
DO NOT STAPLE
20 10
; ending For the taxable year beginning ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___
1
2a
2b
3
7
11
12
13
14
15
16
17
18
21
IF THIS IS AN AMENDED RETURN, MARK THIS BOX
4
5
6
8
9
10
19
20
B. Method Used to Determine Income of Corporation in Kansas G. State of Commercial Domicile
Name
___ ___ ___ ___ ___ ___ ___ ___
1. OrdinaryincomefromfederalScheduleK.............................................................................
2a.TotalofallotherincomefromfederalScheduleK(seeinstructions)........................................................
2b.TotalofallowabledeductionsfromfederalScheduleK(seeinstructions)....................................................
3. Totalfederalincome(addline1toline2aandsubtractline2b)............................................................
4. Totalstateandmunicipalinterest(schedulerequired)...................................
5. Taxes on or measured by income or fees or payments in lieu of income taxes (schedule required)
6. Otheradditionstofederalincome(schedulerequired)...................................
7. Totaladditionstofederalincome(addlines4,5&6)....................................................................
8. InterestonU.S.governmentobligations(schedulerequired)..............................
9. IRCSection78and80%offoreigndividends(schedulerequired).........................
10. Othersubtractionsfromfederalincome(schedulerequired)..............................
11. Totalsubtractionsfromfederalincome(addlines8,9&10)..............................................................
12. Netincomebeforeapportionment(addline3toline7andsubtractline11)..................................................
13. Nonbusinessincome-Totalcompany(schedulerequired)...............................................................
14. Apportionablebusinessincome(subtractline13fromline12).............................................................
15. AveragepercenttoKansas(PartIII,linesA,B,C&E)..........
16. AmounttoKansas(multiplyline14byline15).........................................................................
17. Nonbusinessincome-Kansas(schedulerequired).....................................................................
18. TotalKansasincome(addlines16&17).............................................................................
19. Estimated tax paid and amount credited forward (separate schedule) ..........................
20. Other tax payments (separate schedule). (Do not enter KW-7 or KW-7S withholding on this line). . . . .
21. Refund(addlines19&20) ........................................................................................
C. Business Activity Code (NAICS)
TAXPAYER INFORMATION
___ ___ ___ ___ ___ ___
Mark this box if any taxpayer
information has changed since
the last return was filed.
___ ___
J.
Employer's Identification Number (EIN)
Mark this box if you submitted
a Kansas Form K-120EL is filed.
K.
__ __ __ __ __ __ __ __
___ ___ ___ ___ ___ ___ ___ ___
Number and Street of Principal Office
City State Zip Code
D. Date Business Began in KS (mm/dd/yyyy)
___ ___ ___ ___ ___ ___ ___ ___
E. Date Business Discontinued in KS (mm/dd/yyyy)
Mark this box if a K-40C (Composite
Sch.) is being filed to report income.
___ ___ ___ ___ ___ ___ ___ ___ ___
L.
M.
Enter the original federal due date if
other than the 15th day of the 3rd month
after the end of the tax year.
A. This return is being filed for (check one):
1. PARTNERSHIP 2. S CORPORATION
F. State and Month/Year of Incorporation (mm/yyyy)
I. Mark this box if any tax credit schedules
areenclosedwiththisreturn
and enclose letter of authorization & schedule)
5. Qualified elective two-factor Year qualified:
1. Activity wholly within Kansas or single entity apportionment method
2. Combined income method (Enclose Schedule K-121S)
3. Common carrier mileage (Enclose mileage apportionment schedule)
4. Alternative or separate accounting (See instructions under "Definitions"
H. Enter number of shareholders/partners
included in Part II.
__ __ __ __
__ __ __ __ __ __ __ __ __ __ __ __ __ __
A B __ __ __ __ __ __ __ C ___ ___ ___ ___ ___ ___ ___
I declare under the penalties of perjury that to the best of my knowledge this is a true, correct, and complete return. I authorize the Director of Taxation or their designee
to discuss my K-120S and enclosures with my preparer.
Individual or Firm Signature of Preparer Address and Phone Number Date Tax Preparer's EIN or SSN
Signature of Officer Title Date
Enclose a copy of page 1 through 4 (page 5 if Partnership) of your federal return, Schedule M-1, Schedule M-2, and any federal schedules that support Kansas
modifications. Also include an organizational chart showing all partnerships/S Corps and taxable entities. If additional information is needed, we will request it at a later date.
MAIL TO: KANSAS S CORPORATION INCOME
KANSAS DEPARTMENT OF REVENUE
915 SW HARRISON ST
TOPEKA, KS 66612-1588
FOR OFFICE USE ONLY
PART I - ADDITIONAL INFORMATION
1. Did the corporation file a Kansas Income return under the same
name for the preceding year? _____ Yes _____ No
If "no", enter previous name and EIN.
2. Enter the address of the corporation's principal location in Kansas.
3. The corporation's books are in care of:
Name
Address
Telephone
4. Has your corporation been involved in any reorganization during the
period covered by this return? _____ Yes _____ No If "yes",
enclose a detailed explanation.
5. If your federal taxable income has been redetermined for any prior
years that have not previously been reported to Kansas, check the
applicable box(es) below and state the calendar, fiscal, or short
period year ending date. You are required to submit, under separate
cover, the federal forms or Revenue Agent's Report along with the
Kansas amended return (Form K-120S).
Revenue Agent's Report
Net Operating Loss
Amended Return
Years ended
PART II - PARTNER'S OR SHAREHOLDER'S DISTRIBUTION OF INCOME
This schedule is to be completed for all partners or shareholders. If you have nonresident partners or shareholders, complete Form KW-7S. If there are
more than 12 partners or shareholders, you must complete a schedule similar to the schedule below and submit it with your return. Individual partners or
shareholders complete columns 1 through 8. All other partners and shareholders complete columns 1 through 5.
(1)
Name and address of partner or shareholder Check box if
nonresident
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(2)
Social Security Number
or
Employer Identification
Number (EIN)
(3)
Partner's or
shareholder's percent
of ownership
(4)
Partner's profit percent
or shareholder's
applicable percentage
PART II (continued) See instructions for Nonresident Partner's or Shareholder's Computation of Columns 6, 7 and 8.
(5)
Income from Kansas sources.
Kansas resident individuals: Multiply column 4 by line 12, page 1.
Nonresident individuals: If income is earned only from Kansas
sources multiply column 4 by line 12, page 1. If earned from inside
and outside of Kansas, multiply column 4 by line 18, page 1.
All other partners or shareholders: Multiply column 4 by line 18.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(6)
Partner's or shareholder's portion
of federal ordinary and other
income (losses) and deductions.
Multiply the percentage in column 4 by
line3, page1.
(7)
Partner's or shareholder's portion
of total Kansas income.
Multiply the percentage in column 4 by
line 12, page 1.
(8)
Partner's or shareholder's
modification.
See instructions. Enter result in
Part A of Schedule S, Form K-40.
K-120S AS KANSAS
Corporation Apportionment Schedule
FOR USE BY CORPORATIONS APPORTIONING INCOME
(Corporations using the combined income method must use Schedule K-121S)
2010
For the taxable year beginning ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ; ending ___ ___ ___ ___ ___ ___ ___ ___ ___ ___
Name as shown on Form K-120 Employer Identification Number (EIN)
PART III - APPORTIONMENT FORMULA
A. Property
(1) Value of owned real and tangible personal
property used in the business at original cost
Inventory....................................
Depreciableassets............................
Land . ......................................
Other tangible assets (Enclose schedule) . . . ........
Less:Constructioninprogress...................
Total property to be averaged . . ..................
.
Average owned property (Beg. + End . 2) . .........
(2) Net annual rented property. Multiplied by 8 . ........
TOTAL PROPERTY (Enter on line 15, Block A, page 1)
B. Payroll (Those corporations qualified and utilizing the elective two-factor formula must complete
this area only during the first year of qualifying)
(1) Compensation of officers . . . .................................................
(2) Wages, salaries and commissions .............................................
(3) Payroll expense included in cost of goods sold . . .................................
(4) Payroll expense included in repairs . . ..........................................
(5) Other wages and salaries ....................................................
TOTAL PAYROLL (Enter on line 15, Block B, page 1) (If qualified and utilizing the elective
two-factor formula, do not carry this percentage to page 1)
WITHIN KANSAS
Beginning
of Year
TOTAL COMPANY
B
End
of Year Beginning
of Year End
of Year
A %
PERCENT
WITHIN
KANSAS
Within Kansas Total Company
%
C. Sales(Grossreceipts,lessreturnsandallowances)...................................
(1) Sales delivered or shipped to purchasers in Kansas:
(a) ShippedfromoutsideKansas..............................................
(b) ShippedfromwithinKansas...............................................
(2) Sales shipped from Kansas to:
(a) TheUnitedStatesGovernment............................................
(b) Purchasers in a state where the taxpayer would not be taxable (e.g., under federal
Public Law 86-272) . ................................. ...................
(3) Dividends................................................................
Interest..................................................................
Rents...................................................................
Royalties.................................................................
Gains/losses from intangible asset sales . . ......................................
Gross proceeds from tangible asset sales . ......................................
Other income (Enclose schedule) ..............................................
TOTAL SALES (Enter on line 15, Block C, page 1) C%
D(1) %
D(1). Totalpercent(SumoflinesA,B&Cifutilizingthree-factorformula)............................................. ....
D(2) %
D(2). Totalpercent(SumoflinesA&Cifqualifiedandutilizingtwo-factorformula).......................................... %
E
E. Average percent of either D(1) or D(2), whichever is applicable (Enter on line 15, page 1) . ...............................
PART IV - KANSAS PASS-THROUGH SCHEDULE
The distributions from the entities listed below have been passed-through and are included in your entity.
Entity Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Entity Address
(Number and Street, City, State, Zip) EIN Principal Product
or Services
Kansas
Operations
(Y / N)
PART V - KANSAS QSUB / DISREGARDED ENTITY SCHEDULE
The QSub or Disregarded entities listed below are included in this return.
QSub or Disregarded Entity Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Entity Address
(Number and Street, City, State, Zip) EIN Principal Product
or Services
Kansas
Operations
(Y / N)
