Resident Personal Income Tax Booklet (Arizona Form 140) - 2013 Page 16
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56Arizona Form 140
Line C26 - Adjustment for IRC § 179 Expense
A.
Previously Reported
Gain
on
Decedent's
Installment Sale
not Allowed in Prior Years
If you made an addition for IRC § 179 expense on your
Prior Arizona law required acceleration of any unrecognized
2009, 2010, 2011, and/or 2012 return, enter 20% of the
installment sale gain upon the death of a taxpayer. However,
.
amount added for 2009, 2010, 2011 and/or 2012
this acceleration could have been avoided by the posting of a
bond. If acceleration was required, your federal adjusted
Line C27 - Pay Received for Active Service as a
gross income may include installment sale amounts already
Member of the Reserves, National Guard or the
recognized on a decedent's final Arizona return. If your
U.S. Armed Forces
federal adjusted gross income includes such amounts, you
may subtract that portion of the gain included on your
Members of the U.S. armed forces may subtract pay received
federal return.
for active duty military service. On line C27, enter the amount
of that income included in your federal adjusted gross income.
B. Fiduciary Adjustment
Members of the reserves or the National Guard may subtract
A fiduciary uses Form 141AZ, Schedule K-1 to report to you
pay received for active service as a reservist or as a National
your share of the fiduciary adjustment from the trust or estate.
Guard member. This includes pay received for weekend or
Line 3 of Form 141AZ, Schedule K-1 shows your share of
two-week training periods. On line C27, enter the amount of
the fiduciary adjustment from the estate or trust. If the
that income included in your federal adjusted gross income.
amount reported on line 3 of your Arizona Form 141AZ,
Military Technician (dual status)
Schedule K-1, is a negative number, enter that amount as a
subtraction. Enter the subtraction on line C29.
You may not subtract any income you received for full-time
If the amount reported on line 3 of your Arizona Form 141AZ,
civil service employment as a “military technician (dual
Schedule K-1, is a positive number, enter that amount as an
status)”. Compensation received by a “military technician
addition. Enter the addition on line B11.
(dual status)” for federal civil service employment for the
National Guard or for the United States Reserves, is not
C. Partnership Income
income received for active service as a National Guard
Use this adjustment if your Arizona Form 165, Schedule K-1,
member for a Reserve member even though the employee
shows a difference between federal and state distributable income.
may be required to wear a military uniform while at work.
If the difference reported on your Arizona Form 165,
For more information, see the department’s Income Tax
Schedule K-1, is a negative number, enter that difference as
Ruling ITR 12-2.
a subtraction. Enter the subtraction on line C29.
NOTE: You may not subtract pay received for active duty
If the difference reported on your Arizona Form 165,
service as a member of the U.S. Public Health Service or
Schedule K-1, is a positive number, enter that difference as
NOAA. For more information, see the department’s Income
an addition. Enter the addition on line B11.
Tax Ruling ITR 10-1.
D. Federally Taxable Arizona Municipal Interest as
Line C28 - Net Operating Loss Adjustment
Evidenced by Bonds
Enter the amount of any interest income received on
NOTE: This subtraction applies to only those individuals
obligations of the State of Arizona, or any political
who made an election under the special federal net
subdivisions of Arizona, as evidenced by bonds, and is
operating loss rules for 2008 and 2009. Under the special
included in your Arizona gross income. Do not enter any
rules for 2008 and 2009, you could have elected to carry the
Arizona municipal interest that is exempt from federal
net operating loss back for 3, 4 or 5 years, instead of the
taxation and not included in your federal adjusted gross
normal 2 years. This election would have been allowed
income.
under IRC § 172(b)(1)(H) as amended by the American
Recovery and Reinvestment Act of 2009 or the Worker,
E. Adoption Expenses
Homeownership, and Business Assistance Act of 2009.
You may take this subtraction only in the year the final
Arizona did not adopt the special federal net operating loss
adoption order is granted. Enter the lesser of the total of the
rules for losses incurred during 2008 or 2009. For Arizona
following adoption expenses or $3,000. When figuring your
purposes, you must deduct a net operating loss as if the loss
subtraction, you may include expenses incurred in prior
was computed under IRC § 172 in effect prior to the
years.
enactment of those special rules. If you made an election to
The following expenses are qualified adoption expenses.
deduct your 2008 or 2009 federal net operating loss under
1. Nonreimbursed medical and hospital costs
IRC § 172(b)(1)(H), you may have to enter an amount here.
Figure how much of the net operating loss carry forward
2. Adoption counseling
would have been allowed as a deduction on your 2013
3. Legal and agency fees
federal income tax return, if the election described in IRC §
4. Other nonrecurring costs of adoption
172(b)(1)(H) had not been made in the year of the loss. On
If filing separately, you may take the entire subtraction, or
line C28, enter the amount that exceeds the actual net
you may divide the subtraction with your spouse. However,
operating loss carry forward that was deducted in arriving at
the total subtraction taken by both you and your spouse
federal adjusted gross income.
cannot exceed $3,000.
Line C29 - Other Subtractions From Income
F. Qualified Wood Stove, Wood Fireplace, or Gas
Use line C29 if any of the following special circumstances
Fired Fireplace
apply. Attach your own schedule to the back of your return
Arizona law provides a subtraction for converting an existing
explaining any amounts entered here.
fireplace to one of the following.
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