120S Schedule K-1: SchedK1 Resident Shareholder's Information Schedule (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona Form 120S Schedule K-1 is the 2025 information schedule for resident and part-year resident shareholders of an S corporation. It reports the shareholder’s share of specified capital gains and losses, disallowed federal expenses for marijuana establishments, and pass-throu
Who files this form
Arizona Form 120S Schedule K-1 is the information schedule 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 schedule to that shareholder.
What you'll need
Have these records and details available to complete the applicable parts:
- The shareholder’s federal Schedule K-1 (Form 1120-S), including capital gain or loss information.
- The shareholder’s name, address, tax identification number, and stock ownership percentage for the taxable year.
- The S corporation’s name, address, and employer identification number (EIN).
- For Part 3, information separating gains or losses from assets acquired before January 1, 2012, from those acquired after December 31, 2011.
- For marijuana establishments completing Part 4, Schedule DFE, line 16, showing disallowed federal expenses.
- For Part 5, the shareholder’s share of the PTE tax credit and applicable PTE taxes paid in 2025.
- If question C is answered “Yes,” the beneficial owner’s name and tax identification number.
Common mistakes
- Do not treat lines 4 and 5 as additional gains outside line 3, column (c). The form says those amounts are already included there.
- Leave Part 5 blank unless the shareholder consented to the S corporation’s PTE election for this year or a prior year.
- Do not overlook Part 4, line 7, when completing the shareholder’s Arizona return. The form directs the shareholder to enter that amount on the applicable return line, depending on the return filed and whether the Small Business Income election was made.
- Follow the add-back directions for PTE taxes on lines 9 through 12. The destination depends on the shareholder’s return and Small Business Income election.
Questions people ask
Does the S corporation have to complete every capital gain section?
No. Parts 1, 2, and 3 are not required if the shareholder’s federal Schedule K-1 does not include the corresponding gain or loss: qualified small business investment, exchange of legal tender, or net long-term capital gain or loss.
How is the shareholder’s share of disallowed federal expenses calculated?
For marijuana establishments, enter Schedule DFE, line 16, on this schedule’s 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 are directed to the instructions for Form 141AZ, line 19.
How are PTE taxes paid in 2025 separated on the schedule?
Lines 9 and 10 report Arizona PTE taxes paid in 2025 for prior taxable years and for taxable year 2025, respectively. Lines 11 and 12 make the same distinction for comparable PTE taxes from other states.