Interesting.  I found the fix.  In 32.1, the entry in "Partner type for disregarded entity" I had "Fiduciary" as the DE is an irrev trust that is grantor trust for tax purposes.  Then I had "Individual" in "Beneficial owner partner type"  This populated the Fed K-1 appropriately, but did not allow the AZ PET calculation.  Changed to "Individual" in both and now both K-1s and returns look right and the PET is calculated correctly.  Thank you for your help.  

As a note, it seems to me that the first box should be a note of the type of entity that the DE is and the second the type of entity of the reporting taxpayer (the "Beneficial Owner").  This appears to not be the case, but it seems odd that they would have the same answer twice...  Thoughts???