az state tax 140nr Line 21 is rent before loss or after expense

[jinyu2020]

I have a rental house in AZ. In federal 1040-schedule E, the net rent income is negative after deducting all the expenses and depreciation.

But when filing AZ state tax 140NR, line 21 asks rent income. should we put the rent received (before any expense) or the net income (after deducting all the expense)?

If it's the rent collected, then on this line federal amount will be 0 and Arizona amount will be a positive number?

[RobertB4444]

Line 21 is looking for the Arizona source amount.  As long as all of the income and deductions on your schedule E are from Arizona sources then enter the same amount here as on the federal return and attach a copy of the federal return to the Arizona return for filing (TurboTax should do this automatically).  

If, for example, you had two properties on your schedule E and one was a profitable one from Arizona and a property with a loss from your home state then you would enter the net total from your schedule E on the federal portion of line 21 and only the net profit from the Arizona property on the second part of line 21.

If you have multiple properties on your schedule E enter the net gain or loss from Arizona sources on line 21.

You can check the instructions for the AZ 140NR here.

@jinyu2020

[jinyu2020]

Hi Robert @RobertB4444 , thanks for your comment. Assume we only have 1 property in AZ as the investment property.

On 140-NR the instruction it says

Line 21 - Rents, etc. 

Enter the following income on line 21: 

• Rent or royalty income earned on Arizona properties. 

• Income from Form 141AZ Schedule K-1(NR), line 2 from estates or trusts. 

• Income or (loss) from Schedule(s) K-1(NR) from Arizona partnerships (Arizona Form 165) or small business corporations (Arizona Form 120S). 

So should it be net income-after deduction or total income before any deduction?

[RobertB4444]

Enter the net gain or loss from Arizona sources on line 21.  You'll be all set.

@jinyu2020

[jinyu2020]

@RobertB4444  Thanks!