Arizona tax on captial gain for asset owned prior to Dec 31 2011

[kathy1000]

I purchased a rental property in 2008 and sold it in 2022.  TurboTax Federal calculates my long term capital gain on it, and even though the acquire date shows 2008, the capital gain still shows in the AZ State Net Capital Gain Worksheet, Line A, and on Line 23, Net Capital Gain on assets acquired AFTER Dec 31, 2011.  Why does it do this?  Am I supposed to zero out that number, since I actually acquired the property in 2008?  There is nothing in the Turbo Tax questions as I walk through it that even asks me about it.

[JamesG1]

Arizona taxpayers may subtract 25% of any net long-term capital gain included in Federal AGI that is derived from an asset acquired after 2011.

Return to the screen Capital Gain or Loss from Assets Acquired after December 31, 2011 in the Arizona state income tax return to make the appropriate entry.

The TaxBook page AZ-3 states:

@kathy1000 

[kathy1000]

James G1

I appreciate your responding, but it doesn't answer my question.  Turbo Tax is already putting a figure into that block - and I'm wondering why?  My question is, since I know that it's NOT an asset acquired after 2011, am I supposed to zero it out??  If I were just running my taxes through Turbo Tax, it does this automatically, even though I've already entered the acquisition date at 2008 - and not delving into the detail of that particular issue - I'd never know it.  Which is why I'm asking - am I supposed to zero it out?  And if yes, why does Turbo tax automatically put the figure in there, assuming that the acquire date is after 2011??

[JamesG1]

Yes, you will zero out the entry at the Arizona state tax return screen Capital Gain or Loss from Assets Acquired After December 31, 2011.

The Arizona worksheet reports all of the capital gains reported on the Federal tax return and deducts the gains which do not qualify.

See pages 12 and 13 of the Arizona Form 140 here.

The Arizona screen reports all of the capital gains reported in the Federal tax return and allows you to review those entries.  

Not all capital gains reported on the Federal tax return (for instance, 1099-DIV) can be identified with a date of purchase within the tax return.

@kathy1000