A taxpayer shall not include the same income item twice in computing Arizona taxable income.
1. If a taxpayer includes an income item in determining federal adjusted gross income or federal taxable income for a taxable year, the taxpayer shall not include that income a second time in determining Arizona taxable income for the same taxable year.
2. If a taxpayer included an income item in an Arizona income tax return and includes the same income item again in the computation of either federal adjusted gross income or Arizona taxable income in a subsequent return, the taxpayer shall subtract the income item included for the second time in the subsequent return to determine Arizona adjusted gross income.