141AZ Schedule K-1(NR): Nonresident Beneficiary's Share of Income (2024)

Who files this form

Schedule K-1(NR) reports a nonresident beneficiary’s share of an estate or trust’s income from Arizona sources and related fiduciary adjustments.

The form gives the fiduciary instructions for reporting amounts distributed to beneficiaries. It also explains how individual, fiduciary, partnership, S corporation, C corporation, and exempt organization beneficiaries should use the information.

What you'll need

Have the following information and applicable forms available:

• The estate or trust’s name and EIN, the beneficiary’s name and EIN or SSN, and the requested addresses and phone numbers.
• Form 141AZ, Schedule D, line D9, column (c), for Arizona-source federal distributable net income.
• Form 141AZ, Schedule C, line C14, for the net fiduciary adjustment.
• The beneficiary’s federal Schedule K-1 and Form 141AZ, page 1, lines 15b and 15c, for applicable capital gain or loss information.
• Applicable information about capital loss carryovers, Arizona-source gains, and when assets were acquired.
• Applicable distributed amounts for virtual currency, non-fungible tokens, gas fees, the entity-level income tax credit, and Arizona pass-through entity taxes.

Individual beneficiaries use the capital gain subtraction worksheet in the Form 140NR instructions to determine the allowable subtraction.

Common mistakes

• Skipping the capital gain worksheet. The form says individual beneficiaries must complete the Worksheet for Net Long-Term Capital Gain Subtraction for Assets Acquired After December 31, 2011, to determine the allowable subtraction.
• Treating capital loss carryovers as a regular distribution. The fiduciary instructions say to complete lines 8 and 9 when this is the estate or trust’s final return and a capital loss carryover was distributed to the beneficiary.
• Claiming the Part 3 subtraction for a C corporation or exempt organization. The form says no subtraction is allowed for these beneficiaries. Part 3 is informational only for them and does not need to be reported.

Questions people ask

Where does an individual beneficiary report the income on line 2?

Enter it on Form 140NR, page 1, line 21, in the “ARIZONA” column.

Which capital gain amounts does a nonresident individual use for the subtraction worksheet?

Use Part 3, column (e), on lines 7, 10, and 11 to compute the allowable subtraction. See the worksheet instructions for Form 140NR.

Where do the distributed virtual currency and non-fungible token amounts go?

Report line 12 on Form 140NR, page 6, item “N,” as an “Other Subtraction from Arizona Gross Income.” Report line 13, for distributed gas fees or non-fungible token basis, on page 6, item “O,” as an “Other Subtraction from Arizona Gross Income.”

Where does an individual beneficiary claim the distributed entity-level income tax credit?

Enter the distributed credit from line 14 on Form 355, line 3.

What taxes does the fiduciary report on line 15?

The fiduciary reports the individual beneficiary’s pro-rata share of Arizona pass-through entity taxes paid in 2024 for taxable years 2024 and/or 2023.

Official sources

• https://azdor.gov/forms