331-S: Credit for Donation of School Site – Distribution to Shareholders (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Form 331-S reports an S corporation shareholder’s share of the Credit for Donation of School Site. It shows the corporation’s credit amount, the shareholder’s ownership percentage and credit share, and the shareholder’s portion of the donation expenses.
Who files this form
An S corporation distributing the school site donation credit must complete Form 331-S for each shareholder, except trust or estate shareholders.
If an ownership share is held by a grantor trust disregarded for federal income tax purposes, the share is treated as owned by the grantor. The grantor may claim their share of the credit.
Shareholders use the completed Form 331-S to complete their own Form 331 and must include Form 331-S with their return.
What you'll need
To complete Form 331-S, have:
- The S corporation's name and employer identification number (EIN).
- The shareholder's name and taxpayer identification number (TIN).
- The S corporation's Form 331 credit amount from Part 1, line 11.
- The shareholder's ownership percentage.
- The shareholder's portion of the expenses for donating the property as a school site.
Shareholders need the completed Form 331-S to complete their own Form 331. If claiming the credit and itemized deductions, the form also refers to federal Schedule A and Arizona Schedule A for the required add-back.
How to file
S corporations: Complete a separate Form 331-S for each applicable shareholder. Enter the corporation's credit from Form 331, Part 1, line 11 on line 3a and the shareholder's ownership percentage on line 3b. Multiply these amounts and enter the shareholder's credit on line 3c. Enter the shareholder's portion of donation expenses on line 4.
Give each shareholder a copy, keep a copy for your records, and include a copy of each completed Form 331-S with the S corporation return.
Shareholders: Enter the amount from Form 331-S, line 3c on your Form 331, Part 1, line 10. Include the completed Form 331-S with your return and keep a copy for your records.
The form does not provide a mailing address or e-file instructions.
Common mistakes
- Claiming both the credit and a deduction for the donation. You cannot claim both the tax credit and an itemized deduction for donating a school site. If you claim the credit and itemized deductions on federal Schedule A, add back the lesser of the amount on line 4 or the amount deducted on Arizona Schedule A.
- Claiming the credit in the wrong year. If you file on a calendar-year basis but the S corporation files on a fiscal-year basis, claim the credit for the year in which the corporation's fiscal year ends.
- Leaving out required copies. The corporation must include a copy of each completed Form 331-S with its return. Shareholders must include their completed Form 331-S with their own return. Both must keep copies for their records.
Questions people ask
How is my share of the credit calculated?
Multiply the S corporation's credit on line 3a by your ownership percentage on line 3b. The result on line 3c is your share of the credit.
Where do I enter the credit on my own Form 331?
Enter the amount from Form 331-S, line 3c on Form 331, Part 1, line 10.
What does line 4 represent?
Line 4 reports your portion of the value of the donated property and improvements used to calculate the credit.
Can a grantor claim a credit for shares held by a grantor trust?
Yes. If the grantor trust is disregarded for federal income tax purposes, the ownership share is treated as owned by the grantor, who may claim their share of the credit.
Which year do I claim the credit if the corporation uses a fiscal year?
If you file on a calendar-year basis, claim the credit on your return for the year in which the corporation's fiscal year ends.