165PA Schedule K-1 — Resident & Part-Year Partner's Share of Federal Imputed Underpayment (2025 instructions)

# preamble

2025 Resident and Part-Year Resident Partner's Arizona Form Share of Partnership Federal Imputed Underpayment 165PA Schedule K-1

Instructions for Partnerships

Complete Arizona Form 165PA Schedule K-1, for: • All resident partners, • All part-year resident individual partners, • All resident estate partners, and • All resident trust partners.

Complete Arizona Form 165PA Schedule K-1(NR) for all other partners.

Complete Schedule K-1 Using Arizona Form 165PA

Type or print the required information in the name, address, and information boxes on the top Arizona Form 165PA Schedule K-1. Indicate whether the partnership's taxable year is a calendar year or a fiscal year; if a fiscal year, indicate the period covered by the taxable year on the schedule.

Check the box to indicate this is an "Original" Arizona Form 165PA Schedule K-1.

NOTE: The amount reported on an "Original" Arizona Form 165PA, Schedule K-1 is in addition to any other amounts reported on the partner's Arizona income tax return.

Line 1 Enter the date the Internal Revenue Service (IRS) made its final determination.

Line 2 Leave this line blank.

Partner's Portion of the Arizona Partnership Adjustment

# Line 3

Multiply the amount on line 5 of Arizona Form 165PA by the partner's percentage of the Arizona partnership adjustment. (See NOTE below). Enter the result. This is the partner's portion of the Arizona partnership adjustment. If the amount is less than zero, use brackets to indicate the negative amount.

NOTE:

Generally, the partner's percentage of the partnership adjustment will be the partner's ownership percentage.

In cases in which one or more of the partners of the partnership are tax-exempt organizations, the portion of the adjustment related to the tax -exempt organization(s) is already removed from the federal adjustment. Therefore, the remaining partners' portion of the Arizona partnership adjustment cannot be determined by multiplying each partner's ownership percentage by the Arizona partnership adjustment.

To determine each remaining partner's percentage of the Arizona partnership adjustment, subtract the percentage of the partnership owned by the tax -exempt organization(s) from 100%. This determines the percentage of the partnership not owned by tax -exempt organizations. Then, divide each remaining partner's ownership percentage of the partnership by the partnership percentage not owned by tax -exempt organizations.

EXAMPLE:

Partnership XZY is owned by 10 partners. Each partner owns the indicated percentage of XZY:

Partner Ownership % A 19.10% B 6.20% C 4.10% D 3.25% E 32.25% F 17.30% G 3.75% H 3.90% I 1.70% J 8.45%

Total 100.00%

Partner A is a tax-exempt organization and owns 19.10% of the partnership.

To determine the remaining partners portion of the Arizona partnership adjustment, begin by: • Subtracting Partner A's ownership percentage from 100% (100% - 19.10% = 80.9%). • Divide each remaining partner's ownership by 80.9% to determine each partner's portion of the Arizona partnership adjustment. Partner B's portion of the Arizona adjustment is 7.66% of the total. (Partner B owns 6.2% of XZY; 6.2%/80.9% = 7.66%.) Continue this process for all remaining partners.

After excluding the tax -exempt partner, P artner A, each remaining partner's share of the Arizona Adjustment is:

Partner AZ Adjustment % A 0.00% B 7.66% C 5.07% D 4.02% E 39.86% F 21.38% G 4.64% H 4.82% I 2.10% J 10.44%

Total 100.00%

Multiply each remaining partner's AZ Adjustment % by the amount of the Arizona partnership adjustment. Enter that amount as the "Partner's portion of the Arizona partnership adjustment" on each partner's Arizona Form 165PA Schedule K-1, line 3 or Arizona Form 165PA Schedule K-1(NR), line 3.

Complete Schedule K-1 Using Arizona Form 165PA-X

Type or print the required information in the name, address, and information boxes on the top of the Arizona Form 165PA Schedule K-1. Indicate whether the partnership's taxable year is a calendar year or a fiscal year; if a fiscal year, indicate the period covered by the taxable year on the schedule.

Arizona Form 165PA, Schedule K-1

• If box A1 on Arizona Form 165PA-X is checked and the amount on Part 2, line 5 of that form is negative, check the box labeled "Original" at the top of Arizona Form 165PA, Schedule K-1.

• If box A2 on Arizona Form 165PA-X is checked and the amount on Part 4, line 19 of that form is zero, check the box labeled "Amended" at the top of Arizona Form 165P A, Schedule K-1.

NOTE: • The amount reported on a n "Original" Arizona Form 165PA Schedule K -1 is in addition to any other amounts reported on the partner's Arizona income tax return. • The amount reported on an "Amended" Arizona Form 165PA Schedule K-1 replaces the amount from the previously provided Arizona Form 165PA Schedule K-1.

Line 1 Enter the date the IRS made its final determination.

# Line 2

If the "Amended" box is checked, enter the date the original Arizona Form 165PA was previously filed.

Partner's Portion of the Arizona Partnership Adjustment

# Line 3

Enter the partner's portion of the Arizona partnership adjustment: • If the box labeled "Original" on this form is checked, multiply the amount on Part 2, line 5 of Arizona Form 165PA-X by the partner's percentage of the amended Arizona partnership adjustment. Enter the result.

• If the box labeled, "Amended" on this form is checked, multiply the amount on Part 4, line 17 of Arizona Form 165PA-X by the partner's percentage of the amended Arizona partnership adjustment. Enter the result.

If the partnership has tax-exempt partners, see the NOTE and EXAMPLE boxes on page 1 for a discussion on how to exclude a tax -exempt partner from the Arizona partnership adjustment.