120S Schedule K-1: SchedK-1 Resident Shareholder's Information Schedule (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 120S Schedule K-1 is the 2024 information schedule for resident and part-year resident shareholders of an S corporation. It reports the shareholder’s share of certain capital gains or losses, disallowed federal expenses for marijuana establishments, and pass-through
Who files this form
This schedule is for resident and part-year resident shareholders of an S corporation.
If the S corporation made the Pass-Through Entity (PTE) election and the shareholder consented, the corporation must provide a completed Form 120S Schedule K-1 to that shareholder.
Which parts the corporation completes depends on the shareholder’s capital gains or losses, disallowed federal expenses, and PTE election information.
What you'll need
The schedule uses the following documents and information, as applicable:
- The shareholder’s federal Schedule K-1 (Form 1120-S), including relevant capital gains and losses.
- The shareholder’s tax identification number, name, address, and percentage of stock ownership.
- The S corporation’s EIN, name, and address.
- Whether the corporation made the PTE election and whether the shareholder consented.
- Information separating long-term capital gains or losses from assets acquired before January 1, 2012, and after December 31, 2011.
- Schedule DFE, line 16, for the disallowed federal expenses reported in Part 4, which is for marijuana establishments only.
- The shareholder’s share of the PTE tax credit and applicable PTE taxes paid in 2024.
Common mistakes
- Completing Part 5 without the required consent. Complete it if the shareholder consented to the corporation’s PTE election for this year or a prior year. Otherwise, leave it blank.
- Overlooking amounts already included in line 3. The form identifies the amounts on lines 4 and 5 as already included in line 3, column (c).
- Failing to transfer line 7 to the shareholder’s return. The form directs the shareholder to enter this amount on the applicable Arizona income tax return. The destination depends on the return filed and whether the shareholder made the Small Business Income election.
- Missing the PTE tax add-backs. Lines 9 through 12 direct shareholders to add these amounts back on the applicable Arizona return.
Questions people ask
Must the corporation complete every capital gain section?
No. Parts 1 and 2 are not required if the federal Schedule K-1 does not include the corresponding gain or loss from a qualified small business investment or exchange of legal tender. Part 3 is not required if it does not include any net long-term capital gain or loss.
How is the shareholder’s share of disallowed federal expenses calculated?
For Part 4, enter the corporation’s disallowed federal expenses from Schedule DFE, line 16, on line 6. Multiply that amount by the shareholder’s ownership percentage shown on page 1 and enter the result on line 7.
Where does an individual report the PTE tax credit?
Enter the amount from line 8 on Form 355, Part 1, line 2. Estates and trusts should see the instructions for Form 141AZ, line 19, to claim the credit.
How does the schedule separate PTE tax payments?
Lines 9 and 10 report the shareholder’s share of Arizona PTE taxes paid in 2024, separating taxes for years before 2024 from taxes for 2024. Lines 11 and 12 make the same distinction for comparable PTE taxes from other states.