KRS 141.140: Accounting period for computation of income.

(1) If the taxpayer makes, or is required to make, a federal income tax return, the

taxpayer's income shall be computed for the purposes of this chapter on the basis of

the same calendar or fiscal year required by the federal government, and the

taxpayer shall employ the same methods of accounting required for federal income

tax purposes.

(2) If a return is made by an individual for a period of less than one (1) year, the net

income, computed on the basis of the period for which a separate return is made,

shall be placed on an annual basis by multiplying the amount thereof by the number

of days in the year and dividing by the number of days included in the period for

which the separate return is made. The tax payable shall be such part of the tax

computed on the annual basis as the number of days in the period is of the number

of days in the year.

(3) If a return is made by a corporation for a period of less than one (1) year, the taxable

net income, computed on the basis of the period for which a return is made, shall be

placed on an annual basis by multiplying the amount thereof by the number of days

in the year and dividing by the number of days included in the period for which the

return is made. The tax payable shall be such part of the tax computed on the annual

basis as the number of days in the period is of the number of days in the year.