Arizona Form 140py - Part-Year Resident Personal Income Tax Return

Arizona Form 140PY

Enter the amount by which the loss carryover included in

P. Adjusted Basis in Property for Which You Have

your Arizona gross income is more than the amount allowed

Claimed a Credit for Investment in Qualified Small

for the taxable year under Arizona law.

Businesses

K. Addition to S Corporation Income Due to Credits

If you claim a credit for an investment in a qualified small

Claimed

business on AZ Form 338, you must adjust your basis in the

Shareholders of an S corporation who claim a credit passed

investment by the amount of the credit claimed. You must

through from an S corporation must make an addition to

report this difference in basis on the Arizona return that you

income for the amount of expenses disallowed by reason of

file for the taxable year in which you sell or otherwise

claiming the credit.

dispose of the investment. If you sold or otherwise disposed

of the investment during the 2013 taxable year, enter the

An S corporation that passes the following credits through to its

amount by which the adjusted basis computed under the IRC

shareholders must notify each shareholder of his or her pro rata

with respect to that property exceeds the adjusted basis of

share of the adjustment. You must enter an amount on this line

the property computed under A.R.S. § 43-1074.02.

when claiming any of the following credits.

 Agricultural water conservation system credit (Form 312)

Q. Depreciation or Amortization for a Water

 Environmental technology facility credit (Form 305)

Conservation System

 Pollution control credit (Form 315)

If you claimed a water conservation system credit on AZ

 Credit for solar hot water heater plumbing stub outs and

Form 339, you may not deduct any depreciation or

amortization for that system on your Arizona return. Enter

electric vehicle recharge outlets (Form 319)

 Credit for employment of TANF recipients (Form 320)

the amount of depreciation or amortization claimed on your

 Agricultural pollution control equipment credit (Form 325)

federal return for the water conservation system for which

you have claimed a credit.

 Motion picture credits (Form 334)

R. Nonqualified Withdrawals From 529 College

L. Solar Hot Water Heater Plumbing Stub Out and

Savings Plans

Electric Vehicle Recharge Outlet Expenses

You must make an addition to income if both of the

If you claim a credit on AZ Form 319, for installing solar hot

following apply to you.

water heater plumbing stub outs or electric vehicle recharge

outlets in a dwelling you constructed, you cannot deduct any

1. You received a nonqualified withdrawal from a 529

expenses for which you claim the credit. If you take this

college savings plan.

credit, enter the amount of such expenses that you deducted

2. You did not include the amount of the withdrawal in

on your federal return.

your federal adjusted gross income.

Wage

Expense

for

Employers

TANF

The amount that you must add is the amount withdrawn, but

Recipients

no more than the difference between the amount of

If you claim a credit on AZ Form 320, for employing TANF

contributions subtracted in prior years and the amount added

recipients, you cannot deduct any wage expense for which

in any prior years.

you claim the credit. If you take this credit, enter the amount

A nonqualified withdrawal is a withdrawal other than any of

of such expenses that you deducted on your federal return.

the following:

N. Motion Picture Expenses

1. A qualified withdrawal. A qualified withdrawal is a

If you claim a motion picture credit on AZ Form 334, you

withdrawal from an account to pay the qualified higher

cannot deduct any expenses related to the production or

education expenses of the designated beneficiary of the

related to a transferred credit. Enter the amount of any such

account.

expenses that were deducted in computing Arizona gross

2. A withdrawal made as the result of the death or

income for which you claimed a credit.

disability of the designated beneficiary of an account.

O. Early Withdrawal of Arizona, County, City, or

3. A withdrawal that is made on the account of a

School Retirement System Contributions

scholarship, or the allowance or payment described in

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

If you meet all the following, you must enter an amount here.

designated beneficiary, but only to the extent of the

1. You left your job with the State of Arizona or an

amount of this scholarship, allowance or payment.

Arizona county, city, or school district for reasons other

than retirement.

4. A rollover or change of designated beneficiary.

2. When you left, you took out the contributions you had

S. Original Issue Discount (OID) on Reacquisition

made to the retirement system while employed.

of Debt Instrument

3. You deducted these contributions on your Arizona

For federal purposes, when a taxpayer made the special election

income tax returns that you filed for prior years.

to defer discharge of indebtedness (DOI) income under IRC §

4. You did not include these contributions in your federal

108(i) (for 2009 or 2010), the taxpayer was not allowed to take

adjusted gross income this year.

a deduction with respect to the portion of any OID that accrued

If you meet all these tests, you must report as income those

with respect to that DOI income, during the income deferral

contributions previously deducted on your prior years'

period. In this case, the taxpayer had to deduct the aggregate

Arizona tax returns.

For more information, see the

amount of the OID deductions disallowed ratably over a 5 year

department’s Income Tax Ruling ITR 93-7.

period, beginning with the period in which the income was

includible in federal adjusted gross income.

NOTE: Any interest earned on your retirement contributions

while they were in the system should be reported on line B8 in

Arizona did not adopt the federal provisions requiring a

both the FEDERAL and ARIZONA income columns.

taxpayer to defer the OID deduction in cases where the

Arizona Form 140py - Part-Year Resident Personal Income Tax Return - 2013 Page 10

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