Instructions For Arizona Form 140nr - Nonresident Personal Income Tax Return

Arizona Form 140NR

election to deduct your 2008 or 2009 federal net operating

in your federal adjusted gross income, and likewise your

loss under IRC § 172(b)(1)(H), you may have to enter an

Arizona gross income, you may take a subtraction for the

amount here. Figure how much of the net operating loss

amount included for that year. Usually this subtraction will

carry forward would have been allowed as a deduction on

apply to taxable years 2014 through 2018.

On line 46,

your 2014 federal income tax return, if the election described in

enter the amount of previously deferred Arizona source DOI

IRC § 172(b)(1)(H) had not been made in the year of the

income that you included in your Arizona gross income for

loss. Then figure how much of the carry forward computed

the current taxable year to the extent that the amount was

under that method was derived from Arizona source losses.

previously added to your Arizona income.

The amount you may take as a subtraction is the difference

I. Sole Proprietorship Income of an Arizona

between the amount of Arizona source net operating loss

Nonprofit Medical Marijuana Dispensary Included

carryover allowable as a deduction for federal purposes

in Federal Adjusted Gross Income

under the as if calculation and the amount of the Arizona

If you are registered as an Arizona sole proprietorship with

source net operating loss deduction actually taken for federal

the Arizona Department of Health Services to operate in this

purposes that you included in your Arizona gross income.

state as a nonprofit medical marijuana dispensary, you may

On line 46, enter the amount of allowable Arizona source

subtract the amount of the income from the dispensary that

loss carry forward deduction that exceeds the actual amount

is included in the computation of your federal adjusted gross

of Arizona source net operating loss carry forward deduction

income. Include the amount of the income on line 46.

that was deducted in arriving at Arizona gross income.

NOTE: As an Arizona nonresident, you may have had a loss

NOTE:

If the Arizona nonprofit medical marijuana

from prior year Arizona business operations. However, the

dispensary is registered with the Arizona Department of

loss cannot offset this year’s income unless the as if

Health

Services

anything

other

than

sole

calculation results in an Arizona source net operating loss

proprietorship, this subtraction does not apply.

deduction for federal purposes.

You can only take this

subtraction if the as if federal net operating loss deduction for

J. Other Adjustments

2014 includes Arizona source losses that have not been

Other special adjustments may be necessary. Call one of

absorbed by non-Arizona income in any intervening years.

the numbers listed on the back cover if any of the

You cannot subtract any amount of that net operating loss that

following apply.

has been absorbed by non-Arizona income in any intervening



You sold or disposed of property that was held for the

years. You also cannot take a subtraction for any amount that

production of income subject to Arizona tax and your basis

has already been deducted for Arizona purposes.

was computed under the Arizona Income Tax Act of 1954,

H. Previously Deferred Discharge of Indebtedness

as amended (1978 prior), except depreciable property.

(DOI) Income Adjustment



You deferred exploration expenses determined under

Generally, when a loan is settled for less than the amount

IRC § 617 in a taxable year ending before January 1,

owed, DOI income is realized by the debtor and usually

1990, and you have not previously taken a subtraction

must be included in the debtor’s gross income. The amount

for those expenses.

of DOI income is generally equal to the amount of loan

forgiveness.

DOI income also occurs when a debtor

Exemptions

repurchases his or her own debt at a discount (a price lower

than the adjusted basis issue price of the debt instrument).

Line 47 - Exemption: Age 65 or Over

In debt repurchase transactions, the amount of DOI income

Multiply the number in box 8 on the front of your return by

is generally equal to the difference between the adjusted

$2,100 and enter the result.

issue price and the price paid for the debt instrument.

Line 48 - Exemption: Blind

For federal purposes, a taxpayer may have made a special

Multiply the number in box 9 on the front of your return by

election for taxable years 2009 or 2010 to include DOI

$1,500 and enter the result.

income in connection with the reacquisition of a business

Line 49 - Exemption: Dependents

debt instrument, ratably over a 5-year period. A taxpayer

that made this election will generally include this income

Multiply the number in box 10 on the front of your return by

in federal adjusted gross income beginning with the 2014

$2,300 and enter the result.

taxable year. A taxpayer would have made the federal

Line 50 - Total Exemptions

election under IRC § 108(i) as added by the American

Add lines 47, 48 and 49 and enter the total.

Recovery and Reinvestment Act of 2009.

Line 51 - Prorated Exemptions

Arizona did not adopt the special federal DOI income deferral

provisions for the 2009 or 2010 taxable year. For Arizona

Multiply the amount on line 50 by your Arizona percentage

purposes, if you made the federal election to defer the

from line 27 and enter the result.

inclusion of Arizona source DOI income under IRC § 108(i),

For Active Duty Military Personnel Only: If you were on

you were required to add the amount of that deferred DOI

active duty in Arizona during 2014, but you were a resident

income to Arizona income for the year for which you made

of another state, you must prorate these exemptions.

the election. If you made the required addition to Arizona

income on the Arizona return filed for the year in which you

Line 52 - Arizona Adjusted Gross Income

reacquired the debt instrument (2009 or 2010), Arizona will

Subtract lines 43 through 46 and line 51 from line 42.

not tax that Arizona source DOI income twice. In the year in

which you include that deferred Arizona source DOI income

Instructions For Arizona Form 140nr - Nonresident Personal Income Tax Return - 2014 Page 11

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