141AZ Schedule K-1: Resident or Part-Year Resident Beneficiary's Share of Fiduciary Adjustment (2024)

Who files this form

The 2024 Arizona Form 141AZ Schedule K-1 is for a resident or part-year resident beneficiary’s share of a fiduciary adjustment from an estate or trust.

The form gives fiduciaries instructions for reporting beneficiaries’ shares. It also tells full-year and part-year resident individual beneficiaries where to report those amounts on their Arizona returns. Part 2 includes instructions for fiduciary beneficiaries when a net long-term capital gain or loss is taxed at the estate or trust level.

What you'll need

The form calls for these records and details, as applicable:

• Identification and contact information: The estate or trust’s name and EIN; the beneficiary’s name, EIN or SSN, address, and contact details; and the fiduciary’s name, address, and phone number.
• Form 141AZ, Schedule C: Line C14 supplies the net fiduciary adjustment, and Schedule C supplies the beneficiary’s percentage share of federal distributable income.
• Federal Form 1041 Schedule K-1 and capital gain records: Part 2 uses distributed capital gains or losses, capital loss carryovers, and information separating assets acquired before January 1, 2012, from those acquired after December 31, 2011.
• The net long-term capital gain subtraction worksheet: Individual beneficiaries must use the worksheet in the Form 140 or Form 140PY instructions to determine the allowable subtraction. Fiduciary beneficiaries use the worksheet in the Form 141AZ instructions when applicable.
• Distribution information for Parts 3 through 5: This includes applicable virtual currency and non-fungible token values, gas fees or non-fungible token basis, the distributed Entity-Level Income Tax Credit, and the beneficiary’s share of Arizona PTE taxes paid in 2024 for taxable years 2024 and/or 2023.

Common mistakes

• Do not skip the capital gain subtraction 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. It is included in the Form 140 and Form 140PY instructions.

Questions people ask

How is my share of the fiduciary adjustment calculated?

Line 1 takes the net fiduciary adjustment from Form 141AZ, Schedule C, line C14. Line 2 takes your percentage share of federal distributable income from Schedule C. Multiply line 1 by line 2 and enter the result on line 3.

Where does a full-year resident report the line 3 adjustment?

If you did not elect to file a Small Business Income tax return, report a positive amount on Form 140, page 1, line 18, and a negative amount on Form 140, page 2, line 36. If you elected to file a Small Business Income tax return, use Form 140-SBI, line 11 for a positive amount or line 34 for a negative amount.

Where does a part-year resident report the line 3 adjustment?

If you did not elect to file a Small Business Income tax return, report only the portion allocable to estate or trust income taxable by Arizona. Use Form 140PY, page 1, line 31 for a positive amount or page 2, line 44 for a negative amount. If you elected to file a Small Business Income tax return, the form directs you to Form 140PY-SBI, line 11 for a positive amount or line 34 for a negative amount.

Where do I report the amounts on lines 10 and 11?

Report line 10, the distributed value of virtual currency and non-fungible tokens received at the time of airdrop, on Form 140, page 6, item S, or Form 140PY, page 6, item X(a). Report line 11, the distributed subtraction for gas fees or non-fungible token basis, on Form 140, page 6, item T, or Form 140PY, page 6, item X(b). Both are reported as other subtractions from Arizona gross income.

Where do I claim the credit shown on line 12?

Enter your distributed share of the Entity-Level Income Tax Credit from line 12 on Form 355, line 3.

Official sources

• https://azdor.gov/forms