Instructions For Arizona Form 141az - 2013 (Page 5 of 15) in pdf

Arizona Form 141AZ

G. Nonqualified Withdrawals From 529 College

I. Estate Loss of an Arizona Nonprofit Medical

Savings Plans

Marijuana Dispensary (NMMD) included in Federal

Adjusted Gross Income

Make this adjustment if both of the following apply.

If the NMMD was registered to an individual as a sole

1. The estate or trust received a nonqualified withdrawal

proprietorship and the NMMD becomes part of the

from a 529 college savings plan.

individual’s estate after the individual died, the estate is

2. The amount of withdrawal was not included in the

required to add the amount of the loss from the dispensary

federal taxable income.

that is included in the computation of the estate’s federal

The amount that the fiduciary must add is the amount of

adjusted gross income. Include the amount of the loss on

withdrawal, but no more than the difference between the

line B3.

amount of contributions subtracted in prior years and the

J. Other Adjustments

amount added in any prior years.

Other special adjustments may be necessary. You may need

A nonqualified withdrawal is a withdrawal other than any of

the following:

to make an addition for depreciation or amortization. Call



one of the numbers listed on page 1 of these instructions if

A qualified withdrawal. A qualified withdrawal is a

any of the following apply.

withdrawal from an account to pay the qualified higher

education expenses of the designated beneficiary of the

1. You sold or disposed of property that was held for the

account

production of income and your basis was computed



A withdrawal made as the result of the death or

under the Arizona Income Tax Act of 1954.

disability of the designated beneficiary of an account.

2. You elected to amortize the basis of a pollution control



A withdrawal that is made on the account of a

device or the cost of a childcare facility under Arizona

scholarship, or the allowance or payment described in

law in effect before 1990.

You are still deducting

IRC § 135(d)(1)(B) or (C), and that is received by the

amortization or depreciation for that device or facility

designated beneficiary, but only to the extent of the

on your federal income tax return.

amount of this scholarship, allowance, or payment.



Line B4 - Total Adjustments Increasing Federal

A rollover or change of designated beneficiary.

Taxable Income

H. Original Issue Discount (OID) on Reacquisition

of Debt Instrument

Add lines B1 through B3. Enter the total.

For federal purposes, when an estate or trust made the

Fiduciary

Adjustment

Decreasing

Federal

special election to defer discharge of indebtedness (DOI)

Taxable Income

income under IRC § 108(i), the estate or trust was not

Use lines B5 through B9 to figure the amount of fiduciary

allowed to take a deduction with respect to the portion of

adjustment that decreases federal taxable income.

any OID that accrued with respect to that DOI income,

You may only subtract those items for which statutory

during the income deferral period. In this case, the estate or

authority exists. Without such authority, you cannot take a

trust had to deduct the aggregate amount of the OID

subtraction. If you have any questions concerning

deductions disallowed ratably over a 5-year period,

subtractions from income, call one of the numbers listed on

beginning with the period in which the income was

page 1 of these instructions.

includible in federal adjusted gross income.

NOTE: You cannot subtract any amount that is allocable to

Arizona did not adopt the federal provisions requiring an

income excluded from Arizona taxable income.

estate or trust to defer the OID deduction in cases where the

Enter the following other subtractions from federal taxable

estate or trust federally deferred the DOI income.

income. Attach your own schedule.

For Arizona purposes, the estate or trust had to report the

Line B5 - Negative Arizona Fiduciary Adjustment

DOI income from a debt reacquisition in the year in which it

From Another Estate or Trust

reacquired the debt, and it was allowed to subtract any OID

Use this adjustment only if the Arizona Form 141AZ,

related to that DOI income in the year the OID accrued.

Schedule K-1, indicates a difference between federal and

(See the instructions for “Other Subtractions From Federal

state distributable income.

If the amount shown on the

Taxable Income” line B8, (O)) If the estate’s or trust’s

Arizona Form 141AZ, Schedule K-1, is a negative number,

federal taxable income includes a deduction for any accrued

enter that amount here.

OID already subtracted for Arizona purposes, make an

Line B6 - Interest Received on U.S. Obligations

addition to Arizona income for the amount of deferred OID

Enter the amount of interest income from U.S. Government

deducted on the federal return. Generally, this addition will

obligations included on page 1, line 7. U.S. Government

not apply until taxable year 2014 through 2018. However, if

obligations include obligations such as U.S. savings bonds

the estate or trust was required to accelerate reporting of the

and treasury bills. You cannot deduct any interest or other

DOI income for federal purposes and was allowed to deduct

related expenses incurred to purchase or carry the

accrued OID attributable to that income on a return filed for

obligations. If such expenses are included in Arizona gross

a year prior to 2014; this addition may apply to an earlier

income, you must reduce the subtraction by such expenses.

year.

On line B3, enter the amount of any previously

Reduce the subtraction only by the amount of such expenses

included in your Arizona gross income

deferred OID deducted in computing the estate’s or trust’s

2013 federal taxable income, to the extent that the amount

NOTE: Do not subtract interest earned on FNMA or GNMA

was previously subtracted from Arizona taxable income.

bonds since this interest is taxable by Arizona. For details, see

the Income Tax Ruling ITR 06-1.

Instructions For Arizona Form 141az - 2013 Page 5

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