Schedule DFE: Disallowed Federal Expenses for Marijuana Establishments (2024)
Arizona · Arizona DOR · Used for tax years 2024
Arizona Schedule DFE reports disallowed federal expenses for marijuana establishments, including wages, rent, interest, depreciation, and other expenses. It totals these expenses for reporting on the applicable Arizona tax return or owner statement and is included with your retur
Who files this form
Complete Schedule DFE only if you are licensed by the Arizona Department of Health Services as:
- A Marijuana Establishment.
- A Marijuana Testing Facility.
- A Dual Licensee that elected to operate on a for-profit basis.
Do not complete this schedule if you are a Nonprofit Medical Marijuana Dispensary only or a Dual Licensee that has not made the for-profit election.
What you'll need
To complete the schedule, you need:
- Your name as shown on your Arizona return.
- Your Social Security number or Employer Identification Number.
- Your ADHS Registration Identification Number.
- Your tax-year information, including beginning and ending dates if you use a fiscal year.
- Amounts for the disallowed federal expenses listed on lines 1 through 14.
Include a schedule for depreciation and Section 179 expense on line 8, and a schedule for other expenses on line 14.
How to file
Include Schedule DFE with your Arizona return. The supplied form does not give a mailing address or e-file directions.
Report the disallowed federal expenses on lines 1 through 14. Add those lines and enter the total on line 16. If the total is less than zero, enter "0".
Transfer the line 16 amount to the location specified for your return. For corporations:
- Form 120: Page 5, Schedule B, line B10, line O1.
- Form 120A: Page 3, Schedule B, line B10, line M1.
- Form 120X: Page 5, Schedule B, line B10, line O1.
- S corporations with Arizona resident shareholders: Form 120S, Schedule K-1, line 6 for each Arizona resident shareholder.
- S corporations with nonresident shareholders: Form 120S, Schedule K-1(NR), line 19 for each nonresident shareholder.
Common mistakes
- Completing this schedule when you are a Nonprofit Medical Marijuana Dispensary only or a Dual Licensee without the for-profit election. The form says not to complete it in those cases.
- Leaving out the supporting schedules required for line 8 or line 14.
- Entering a negative total on line 16. Enter "0" if the total is less than zero.
- Forgetting to include Schedule DFE with your return.
Questions people ask
What tax period does the 2024 schedule cover?
The form provides a choice of calendar year 2024 or a fiscal year beginning in 2024. For a fiscal year, enter the beginning and ending dates.
Where do individuals and sole proprietors report the total?
Transfer the line 16 amount as follows:
- Form 140: Other Subtractions, page 6, line P.
- Form 140PY: Other Subtractions, page 6, line U.
- Form 140NR: Other Subtractions, page 6, line K.
- Form 140X: Include it on line 25.
- Form 140-SBI or 140X-SBI: Line 46.
- Form 140PY-SBI or 140NR-SBI: Line 43.
Where do partnerships report the total?
Enter the amount on Form 165, page 4, Schedule B, line B5, line G.
Where do trusts and estates report the total?
For trusts and estates filing Form 141, enter the amount on Schedule B, line B9.