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Kentucky Free Printable  for 2020 Kentucky Corporation and Pass-Through Entity Related Party Expense Questionnaire

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Corporation and Pass-Through Entity Related Party Expense Questionnaire
Form 41A802

41A802 (06-16) Commonwealth of Kentucky DEPARTMENT OF REVENUE Taxable Year Ending CORPORATION AND PASS-THROUGH ENTITY RELATED PARTY EXPENSE QUESTIONNAIRE __ __/__ __ Mo.  Yr. KRS 141.205 and 103 KAR 16:230 Name of Entity Federal Identification Number __ __ __ __ __ __ __ __ __ Kentucky Corporation/LLET Account Number (if applicable) __ __ __ __ __ __ The information included in this questionnaire will be used by the Department of Revenue in determining whether intangible expense, intangible interest expense or management fees have been properly deducted from or added back to federal taxable (ordinary) income in your Kentucky tax return for the above taxable year. PART I – REQUIRED ADD BACK All intangible expenses, intangible interest expenses and management fees that are paid, accrued or incurred to a related member must be added back to income unless one or more of the statutory exceptions are met. Section A — Intangible Expenses 1. Total intangible expenses paid to a related member: Do not include any interest expense or costs related to intangible interest expense...................................................... 1 00 Section B — Intangible Interest Expenses 1. Total intangible interest expenses paid to a related member............................................. 1 00 Section C — Management Fees 1. Total management fees paid to a related member............................................................... 1 00 Section D — Total Required Add Back 1. Add Section A, line 1, Section B, line 1 and Section C, line 1. Enter here........................... 1 00 PART II – EXCEPTIONS TO ADD BACK Section A — Exceptions to Expenses 1. Enter amount from Part III, Section A, line 6.......................................................................... 1 2. Enter amount from Part III, Section B, line 5.......................................................................... 2 3. Enter amount from Part III, Section C, line 5.......................................................................... 3 4. Enter amount from Part III, Section D, line 1.......................................................................... 4 5. Enter amount from Part III, Section E, line 1.......................................................................... 5 6. Total Exceptions: Add lines 1 through 5 and enter here....................................................... 6 00 00 00 00 00 00 Section B — Total Related Party Cost Add Back After Exceptions 1. Total: Part I, Section D, line 1 less Part II, Section A, line 6................................................... 1 00 41A802 (06-16) Page 2 Commonwealth of Kentucky DEPARTMENT OF REVENUE PART III – DETAIL OF EXCEPTIONS TO ADD BACK Section A — Exception for intangible expenses, intangible interest expenses and management fees paid to related members that are included in the same consolidated Kentucky corporation income tax return for this taxable year. Name of Related Member Federal Identification Number Amount Deducted Kentucky Corp./LLET Account Number 1. 2. 3. 4. 5. 6. Total of lines 1 through 5. Enter here and on PART II, Section A, line 1 00 00 00 00 00 00 Section B — Exception for intangible expenses, intangible interest expenses and management fees paid to related members who are subject to tax in their state of domicile. A. B. C. Were any intangible expenses, intangible interest expenses or management fees paid, accrued or incurred to a recipient where the expense or payment was subject to, in the related member’s state of commercial domicile, a net income tax, or a franchise tax measured by, in whole or in part, net income? Is the recipient engaged in substantial business activities separate and apart from the acquisition, use, licensing, management, ownership, sale, exchange, or any other disposition of intangible property, or in the financing of related members, as evidenced by the maintenance of permanent office space and full-time employees dedicated to the maintenance and protection of intangible property? Is the transaction giving rise to the intangible expenses, intangible interest expenses or management fees between the taxpayer and the recipient made at a commercially reasonable rate and at terms comparable to an arm’s length transaction? ¨ Yes  ¨ No ¨ Yes  ¨ No ¨ Yes  ¨ No If the answers to Questions A, B and C above are all “Yes,” attach a copy of recipient’s tax return filed in its state of commercial domicile (proprietary information may be redacted), and a copy of pertinent parts of the contract or other documentation that support this exception. Failure to provide the tax return and pertinent parts of the contract or other documentation that support this exception will result in a denial of the exception. If any of the answers are “No,” the taxpayer does not qualify for the exception. Also, to qualify for this exception, all parts of the following schedule must be completed. Name of Related Member Federal Identification Number State of Commercial Domicile Name of Tax 1. 2. 3. 4. 5. Total of lines 1 through 4. Enter here and on PART II, Section A, line 2 Amount Deducted 00 00 00 00 00 41A802 (06-16) Page 3 Commonwealth of Kentucky DEPARTMENT OF REVENUE Section C — Exception for intangible expenses, intangible interest expenses and management fees paid to related members located in a country or countries with which the United States has a comprehensive income tax treaty(ies). A. B. C. Were any intangible expenses, intangible interest expenses or management fees paid, accrued or incurred to a related member in a foreign nation which has in force a comprehensive income tax treaty with the United States? Is the recipient engaged in substantial business activities separate and apart from the acquisition, use, licensing, management, ownership, sale, exchange, or any other disposition of intangible property, or in the financing of related members, as evidenced by the maintenance of permanent office space and full-time employees dedicated to the maintenance and protection of intangible property? Is the transaction giving rise to the intangible expenses, intangible interest expenses or management fees between the taxpayer and the recipient made at a commercially reasonable rate and at terms comparable to an arm’s length transaction? ¨ Yes  ¨ No ¨ Yes  ¨ No ¨ Yes  ¨ No If the answers to Questions A, B and C above are all “Yes,” attach a copy of recipient’s tax return (proprietary information may be redacted), and a copy of pertinent parts of the contract or other documentation that support this exception. Failure to provide the tax return and pertinent parts of the contract or other documentation that support this exception will result in a denial of the exception. If any of the answers are “No,” the taxpayer does not qualify for the exception. Also, to qualify for this exception, all parts of the following schedule must be completed. Name of Related Member Name of Foreign Nation Description of Treaty 1. 2. 3. 4. 5. Total of lines 1 through 4. Enter here and on PART II, Section A, line 3 Amount Deducted 00 00 00 00 00 Section D — Exception for intangible expenses, intangible interest expenses and management fees where the recipient regularly engages in transactions with one (1) or more unrelated parties on terms identical to that of the subject transaction. A. Has the recipient regularly engaged in transactions with one (1) or more unrelated parties on terms identical to that of the subject transaction (giving rise to the intangible expense, intangible interest expense or management fee)? ¨ Yes  ¨ No If the answer to Question A is “Yes,” complete line 1 below and attach copies of the written agreements between the taxpayer and the recipient and the recipient and the unrelated party. Failure to attach the written agreements will result in a denial of the exception. If the answer is “No,” the taxpayer does not qualify for this exception. 1. Exception amount. Enter here and on PART II, Section A, line 4 00 Section E — Exception for intangible expenses, intangible interest expenses and management fees where the taxpayer and department have agreed in writing to the application or use of an alternative method of apportionment under KRS 141.120(9). A. Is there a written agreement between the taxpayer and the Department which provides for use of an alternative method of apportionment under KRS 141.120(9)? ¨ Yes  ¨ No If the answer to Question A is “Yes,” complete line 1 below and attach a copy of the written agreement. Failure to attach the written agreement will result in a denial of the exception. If the answer is “No,” the taxpayer is not eligible for this exception. 1. Exception amount. Enter here and on PART II, Section A, line 5 00 41A802 (06-16) Commonwealth of Kentucky DEPARTMENT OF REVENUE Page 4 INSTRUCTIONS FOR RELATED PARTY COSTS KRS 141.205(1)(l) states that “related party costs” means intangible expense, intangible interest expense, management fees and any costs or expenses associated with other related party transactions. KRS 141.205(1)(h) states that “recipient” means a related member or foreign corporation to whom the item of income that corresponds to the intangible interest expense, the intangible expense, or the management fees, is paid. KRS 141.205(1)(b) states that “intangible expenses” includes the following only to the extent that the amounts are allowed as deductions or costs in determining taxable net income before the application of any net operating loss deduction provided under Chapter 1 of the Internal Revenue Code: (i) Expenses, losses, and costs for, related to, or in connection directly or indirectly with the direct or indirect acquisition, use, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property; (ii) Losses, related to, or incurred in connection directly or indirectly with, factoring transactions or discounting transactions; (iii) Royalty, patent, technical, and copyright fees; (iv) Licensing fees; and (v) Other similar expenses and costs. KRS 141.205(1)(c) states that “intangible interest expense” means only those amounts which are directly or indirectly allowed as deduction under Section 163 of the Internal Revenue Code for purposes of determining taxable income under that code, to the extent that the amounts are directly or indirectly for, related to, or connected to the direct or indirect acquisition, use, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property. KRS 141.205(1)(d) states that “management fees” includes but is not limited to expenses and costs paid for services pertaining to accounts receivable and payable, employee benefit plans, insurance, legal, payroll, data processing, purchasing, tax, financial and securities, accounting, reporting and compliance services or similar services, only to the extent that the amounts are allowed as a deduction or cost in determining taxable net income before the application of net operating loss deduction for the taxable year provided under Chapter 1 of the Internal Revenue Code. PART I—REQUIRED ADD BACK Section B—Total Related Party Cost Add Back After Exceptions Section A—Intangible Expenses Line 1—Enter the amount from Part I, Section D, Line 1 less the amount on Part II, Section A, Line 6. Line 1—Enter the total of all intangible expenses paid to a related member. Do not include any interest expense or costs related to intangible interest expense. Section B—Intangible Interest Expenses Line 1—Enter the total of all intangible interest expenses paid to a related member. Section C—Management Fees Line 1—Enter the total of all management fees paid to a related member. Section D—Total Required Add Back Line 1—Enter the total of Section A, Line 1, Section B, Line 1 and Section C, Line 1. PART II—EXCEPTIONS TO ADD BACK Section A—Exceptions to Expenses Line 1—Enter the amount from Part III, Section A, Line 6. Line 2—Enter the amount from Part III, Section B, Line 5. Line 3—Enter the amount from Part III, Section C, Line 5. Line 4—Enter the amount from Part III, Section D, Line 1. Line 5—Enter the amount from Part III, Section E, Line 1. Line 6—Enter the total of Lines 1 through 5. PART III—DETAIL OF EXCEPTIONS TO ADD BACK Section A—Exception for intangible expenses, intangible interest expenses and management fees paid to related members that are included in the same consolidated Kentucky corporation income tax return for this taxable year. Lines 1 to 5—For each related member include the name, Federal Identification Number, Kentucky Corporation/LLET Account Number and the amount deducted by the taxpayer. If there are more than five related members, attach a statement with the information for each member and enter the total on Line 1. Line 6—Enter the total of Lines 1 through 5. Also enter the total on Part II, Section A, Line 1. Section B—Exception for intangible expenses, intangible interest expenses and management fees paid to related members who are subject to tax in their state of domicile. Questions A to C—Answer the questions A through C. If the answers are all Yes, complete Lines 1 through 5 and attach a copy of recipient’s tax return filed in its state of commercial domicile (proprietary information may be redacted), and a copy of pertinent parts of the contract or other documentation that support this exception. Lines 1 to 4—For each related member include the name, Federal Identification Number, state of commercial domicile, name of tax and the amount deducted by the taxpayer. If there 41A802 (06-16) Page 5 Commonwealth of Kentucky DEPARTMENT OF REVENUE are more than four related members, attach a statement with the information for each member and enter the total on Line 1. Line 5—Enter the total of Lines 1 through 4. Also enter the total on Part II, Section A, Line 2. Section C—Exception for intangible expenses, intangible interest expenses and management fees paid to related members located in a country or countries with which the United States has a comprehensive income tax treaty(ies). Questions A to C—Answer questions A through C. If the answers are all Yes, complete Lines 1 through 5 and attach a copy of recipient’s tax return (proprietary information may be redacted), and a copy of pertinent parts of the contract or other documentation that support this exception. Lines 1 to 4—For each related member include the name, name of foreign nation, description of treaty and the amount deducted by the taxpayer. If there are more than four related members, attach a statement with the information for each member and enter the total on Line 1. Line 5—Enter the total of Lines 1 through 4. Also enter the total on Part II, Section A, Line 3. Section D—Exception for intangible expenses, intangible interest expenses and management fees where the recipient regularly engages in transactions with one (1) or more unrelated parties on terms identical to that of the subject transaction. Question A—If the answer is Yes, attach a schedule or spreadsheet that identifies the unrelated party and the amount paid to the recipient. Include the rate charged by the recipient to the unrelated party for the intangible expense, intangible interest or management fee. Complete Line 1 and include copies of the written agreements between the taxpayer and the recipient, as well as, the recipient and the unrelated party. Line 1—Enter the total amount deducted by the taxpayer for intangible expenses, intangible interest expenses or management fees paid to related parties that are based on terms identical to that of unrelated parties. Also enter the total on Part II, Section A, Line 4. Section E—Exception for intangible expenses, intangible interest expenses and management fees where the taxpayer and department have agreed in writing to the application or use of an alternative method of apportionment under KRS 141.120(9). Question A—Answer question A. If the answer is Yes, complete Line 1 and attach a copy of the written agreement between the taxpayer and the department. Line 1—Enter the total amount deducted by the taxpayer for intangible expenses, intangible interest expenses or management fees where the taxpayer and department have agreed in writing to the application or use of an alternative method of apportionment under KRS 141.120(9). Also enter the total on Part II, Section A, Line 5. PROVIDE ANY ADDITIONAL INFORMATION WHICH MAY BE USEFUL IN DETERMINING WHETHER INTANGIBLE EXPENSES, INTANGIBLE INTEREST EXPENSES OR MANAGEMENT FEES HAVE BEEN PROPERLY DEDUCTED FROM OR ADDED BACK TO FEDERAL TAXABLE (ORDINARY) INCOME IN YOUR KENTUCKY TAX RETURN FOR THE TAXABLE YEAR REFLECTED ON PAGE 1. Person completing questionnaire:_________________________________________________ Title:____________________________________________________________________________ Telephone:______________________________________________________________________ Email address:___________________________________________________________________ Date:____________________________________________________________________________ Please return this completed questionnaire to: ATTN: Division of Corporation Tax Kentucky Department of Revenue P.O. Box 181, Station 52 Frankfort, Kentucky 40602-0181 Telephone: 502-564-8139 Fax: 502-564-0058
Extracted from PDF file 2019-kentucky-form-41a802.pdf, last modified October 2016

More about the Kentucky Form 41A802 Corporate Income Tax TY 2019

We last updated the Corporation and Pass-Through Entity Related Party Expense Questionnaire in April 2020, so this is the latest version of Form 41A802, fully updated for tax year 2019. You can download or print current or past-year PDFs of Form 41A802 directly from TaxFormFinder. You can print other Kentucky tax forms here.

Other Kentucky Corporate Income Tax Forms:

TaxFormFinder has an additional 129 Kentucky income tax forms that you may need, plus all federal income tax forms.

Form Code Form Name
Form 725 Kentucky Single Member LLC Individually Owned & LLET Return
Form 720S Instructions Kentucky S Corporation Income Tax and LLET Return Instructions
Form 720 Kentucky Corporation Income Tax and LLET Return
Form 765-GP-K1 Schedule K-1 - Partner's Share of Income, Credits, Deductions, Etc.
Form 720-ES Kentucky Estimated Tax Voucher - Corporation Income/Limited Liability Entity Tax - Form 41A720ES

Download all KY tax forms View all 130 Kentucky Income Tax Forms


Form Sources:

Kentucky usually releases forms for the current tax year between January and April. We last updated Kentucky Form 41A802 from the Department of Revenue in April 2020.

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About the Corporate Income Tax

The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.

Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).

Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.

Historical Past-Year Versions of Kentucky Form 41A802

We have a total of five past-year versions of Form 41A802 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:



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