Arizona Form 141az - Arizona Fiduciary Income Tax Return

Arizona Form 141AZ

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A qualified withdrawal. A qualified withdrawal is a

Use lines B5 through B9 to figure the amount of fiduciary

withdrawal from an account to pay the qualified higher

adjustment that decreases federal taxable income.

education expenses of the designated beneficiary of the

You may only subtract those items for which statutory

account

authority exists. Without such authority, you cannot take a

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A withdrawal made as the result of the death or

subtraction. If you have any questions concerning

disability of the designated beneficiary of an account.

subtractions from income, call one of the numbers listed on

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page 1 of these instructions.

A withdrawal that is made on the account of a

scholarship, or the allowance or payment described in

NOTE: You cannot subtract any amount that is allocable to

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

income excluded from Arizona taxable income.

designated beneficiary, but only to the extent of the

amount of this scholarship, allowance, or payment.

Enter the following other subtractions from federal taxable

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income. Attach your own schedule.

A rollover or change of designated beneficiary.

Line B5 - Negative Arizona Fiduciary Adjustment

H. Original Issue Discount (OID) on Reacquisition

From Another Estate or Trust

of Debt Instrument

Use this adjustment only if the Arizona Form 141AZ,

For federal purposes, when an estate or trust made the special

Schedule K-1, indicates a difference between federal and

election to defer discharge of indebtedness (DOI) income under

state distributable income.

If the amount shown on the

I.R.C. § 108(i), the estate or trust was not allowed to take a

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

deduction with respect to the portion of any OID that accrued

enter that amount here.

with respect to that DOI income, during the income deferral

period. In this case, the estate or trust had to deduct the

Line B6 - Interest Received on U.S. Obligations

aggregate amount of the OID deductions disallowed ratably

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

over a 5 year period, beginning with the period in which the

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

income was includible in federal adjusted gross income.

obligations include obligations such as U.S. savings bonds

Arizona did not adopt the federal provisions requiring an

and treasury bills. You cannot deduct any interest or other

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

related expenses incurred to purchase or carry the

estate or trust federally deferred the DOI income.

For

obligations. If such expenses are included in Arizona gross

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

income, you must reduce the subtraction by such expenses.

income from a debt reacquisition in the year in which it

Reduce the subtraction only by the amount of such expenses

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

included in your Arizona gross income

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

NOTE: Do not subtract interest earned on FNMA or GNMA

(See the instructions for “Other Subtractions From Federal

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

Taxable Income.” (#P)) If the estate’s or trust’s federal

taxable income includes a deduction for any accrued OID

the Income Tax Ruling, ITR 06-1.

already subtracted for Arizona purposes, make an addition to

Do not subtract any amount received from a qualified

Arizona income for the amount of deferred OID deducted on

pension plan that invests in U.S. Government obligations. Do

the federal return. Generally, this addition will not apply

not subtract any amount received from an IRA that invests in

until taxable year 2014 through 2018. However, if the estate

U.S. Government obligations. These amounts are not interest

or trust was required to accelerate reporting of the DOI

income. For more information, see Income Tax Rulings ITR

income for federal purposes and was allowed to deduct

96-2 and ITR 96-3.

accrued OID attributable to that income on a return filed for

Line B7 - Refunds From Other States

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

year.

On line B3, enter the amount of any previously

Enter any state income tax refunds received from states other than

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

Arizona. Enter an amount only to the extent it is included on

2011 federal taxable income, to the extent that the amount

page 1, line 7 of Arizona Form 141AZ.

was previously subtracted from Arizona taxable income.

Line B8 - Other Subtractions From Federal Taxable

I. Other Adjustments

Income

Other special adjustments may be necessary. You may need

Enter any other subtractions, including those shown below,

to make an addition for depreciation or amortization. Call

to federal taxable income. Attach your own schedule.

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

A. Exclusion for U.S. Government, Arizona State, or

any of the following apply.

Local Government Pensions

You sold or disposed of property that was held for the

If the estate or trust received pension income from any of the

production of income and your basis was computed under

sources listed below, subtract the amount received or $2,500,

the Arizona Income Tax Act of 1954.

whichever is less. Only include amounts which the estate or

You elected to amortize the basis of a pollution control

trust reported as income on the federal return.

device or the cost of a childcare facility under Arizona law in

Public pensions from the following sources qualify

effect before 1990. You are still deducting amortization or

for this subtraction:

depreciation for that device or facility on your federal

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The United States Government Service Retirement and

income tax return.

Disability Fund

Line B4 - Total Adjustments Increasing Federal

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The United States Foreign Service Retirement and

Taxable Income

Disability System

Add lines B1 through B3. Enter the total.

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Retired or retainer pay of the uniformed services of the

Fiduciary

Adjustment

Decreasing

Federal

United States

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Taxable Income

Any other retirement system or plan established by

Arizona Form 141az - Arizona Fiduciary Income Tax Return - 2011 Page 5

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