Instructions For Arizona Form 140 - Resident Personal Income Tax Return

Form 140

C. Partnership Income

3. A net operating loss or capital loss was established due

to the repayment made in the prior year.

Use this adjustment if your Arizona Form 165, Schedule K-1,

4. You are entitled to take that net operating loss or capital

shows a difference between federal and state distributable income.

loss carryover into account when computing your 2011

If the difference reported on your Arizona Form 165,

Arizona taxable income.

Schedule K-1, is a negative number, enter that difference as

5. The amount of the loss carryover allowed to be taken

a subtraction. Enter the subtraction on line C29.

into account for Arizona purposes is more than the

If the difference reported on your Arizona Form 165,

amount included in your federal income.

Schedule K-1, is a positive number, enter that difference as

Enter the amount by which the loss carryover allowed for

an addition. Enter the addition on line B11.

the taxable year under Arizona law is more than the amount

included in your federal adjusted gross income.

D. Federally Taxable Arizona Municipal Interest

H. Certain Expenses Not Allowed for Federal Purposes

Enter the amount of any interest income received on obligations of

the State of Arizona, or any political subdivisions of Arizona,

You may subtract some expenses that you cannot deduct on

that is included in your Arizona gross income. Do not enter any

your federal return when you claim certain federal tax credits.

Arizona municipal interest that is exempt from federal

These federal tax credits are:



taxation and not included in your federal adjusted gross income.

The federal work opportunity credit



The empowerment zone employment credit

E. Adoption Expenses



The credit for employer-paid social security taxes on

You may take this subtraction only in the year the final

employee cash tips

adoption order is granted. Enter the lesser of the total of the



The Indian employment credit

following adoption expenses or $3,000. When figuring your

subtraction, you may include expenses incurred in prior years.

If you received any of the above federal tax credits for 2011,

enter the portion of wages or salaries you paid or incurred

The following expenses are qualified adoption expenses.

during the taxable year equal to the amount of those federal

1. Nonreimbursed medical and hospital costs.

tax credits you received.

2. Adoption counseling.

I. Qualified State Tuition Program Distributions

3. Legal and agency fees.

4. Other nonrecurring costs of adoption.

If you are a beneficiary of a qualified state tuition program, you

may subtract some of the amount distributed from the program

If filing separately, you may take the entire subtraction, or

for qualified education expenses. Enter the amount of the

you may divide the subtraction with your spouse. However,

distribution that you had to include in your federal adjusted

the total subtraction taken by both you and your spouse

gross income. A qualified state tuition program is a program

cannot exceed $3,000.

that meets the requirements of I.R.C. § 529.

F. Qualified Wood Stove, Wood Fireplace, or Gas

J. Subtraction for World War II Victims

Fired Fireplace

You may subtract distributions made to you for your

Arizona law provides a subtraction for converting an existing

persecution or the persecution of your ancestors by Nazi

fireplace to one of the following:

Germany or any other Axis regime for racial, religious or



political reasons. If you are the first recipient of such

a qualified wood stove

distributions, enter the amount of the distributions that you



a qualified wood fireplace

had to include in your federal adjusted gross income.



a gas fired fireplace and non-optional equipment

You may also subtract items of income that are attributable to,

directly related to its operation.

derived from or related to assets that were stolen or hidden

You may subtract up to $500 of the costs incurred for

from or lost to you if you were persecuted by Nazi Germany or

converting an existing fireplace on your property located in

any other Axis regime for racial, religious or political reasons

Arizona. When you figure your subtraction, do not include

before, during or immediately after World War II. If you are

taxes, interest, or other finance charges.

the first recipient of such income, enter the amount of income

that you had to include in your federal adjusted gross income.

A qualified wood stove or a qualified wood fireplace is a

residential wood heater that was manufactured on or after

K. Installment Sale Income from Another State

July 1, 1990, or sold at retail on or after July 1, 1992. The

Taxed by the Other State in a Prior Taxable Year

residential wood heater must also meet the U.S. Environmental

You may subtract income from an installment sale if both of

Protection Agency's July 1990 particulate emissions standards.

the following apply:

A qualified gas fired fireplace is any device that burns

The income from the sale is subject to Arizona income tax

natural or liquefied petroleum gas as its fuel through a

in 2011; and

burner system that is permanently installed in the fireplace.

You paid income tax to another state on that income in a

The conversion of an existing wood burning fireplace to

prior tax year.

noncombustible gas logs that are permanently installed in

Enter the amount of such income that you included in your

the fireplace also qualifies as a gas fired fireplace.

Arizona gross income for 2011.

G. Claim of Right Adjustment for Amounts Repaid

Do not enter any amount that is subject to tax by both Arizona

in Prior Taxable Years

and another state in 2011. In this case, you may be eligible for a

You must make an entry here if all of the following apply.

tax credit. See Form 309 for details.

1. During a year prior to 2011 you were required to repay

L. Agricultural Crops Given to Arizona Charities

amounts held under a claim of right.

Arizona law allows a subtraction for qualified crop gifts made

2. You computed your tax for that prior year under

during 2011 to one or more charitable organizations. To take

Arizona's claim of right provisions.

this subtraction, all of the following must apply.

Instructions For Arizona Form 140 - Resident Personal Income Tax Return - 2011 Page 12

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