SCHEDULE D
(Form 1120) Capital Gains and Losses 1974

apartment of the Treasury > Attach to your income tax return. (Rev. 4-75)

Name | Employer Identification Number

EEG Short-term Capital Gains and Losses—Assets Held 6 Months or Less

a. Kind of nrty and de b, Date acquired c. Date sold i e. Cost or other basis . Gain or (loss)
tésamplo, SOD shares of "2" Co.) {mo., day, yt) (imo., day, yt.) 4. Gross sales price | “snd expense of sale (dless e)

Unused capital loss carryover (attach computation) . . 2. ee ee ee ee ee
Net short-term capital gain or (loss). oe
Long-term Capital Gains and Losses—Assets Held More Than 6 Months

4 Enter Section 1231 gain from line 4(a)(1), Form 4797. . . . . - - - «s+. se

wn;

6 ‘al_gain_or (loss
na Summary of Schedule D Gains and Losses
7 Enter excess of net short-term capital gain (line 3) over net long-term capital loss (line 6)

8 Enter excess of net long-term capital gain (line 6) over net short-term capital loss (line 3)
9 Total of lines 7 and 8. Enter here and on Form 1120, page 1, line 9(a)

HZal ms Alternative Tax Computation (Use Form 1120-FY 1974-75 (Rev. 4-75) i in v order to compute your tax)

eet



Instructions

(References are to the Internal Revenue Code.)

This schedule provides for the reporting of
sales or exchanges of capital assets. Every
sale or exchange of property must be reported
even though no gain or loss is indicated.

For reporting sales or exchanges of prop-
erty other than capital assets including the
sale or exchange of property used in the trade
or business and involuntary conversions (sec-
tion 1231), see Form 4797 and related
instructions.

PARTS | and Il

Capital Assets.—Each item of
property held by a corporation
(whether or not connected with its
trade or business) is a capital asset
except: (1) inventoriable assets or
property held primarily for sale to
customers; (2) depreciable or real
Property used in the trade or busi-
ness; (3) certain copyrights, literary,
musical, or artistic compositions,
letters or memorandums, or similar
Property; (4) accounts or notes re-
ceivable acquired in the ordinary
course of trade or business for serv-
ices rendered or from the sale of
Property described in (1) above;
and (5) certain short-term Federal,
State, and municipal obligations is-
sued on or after March 1, 1941, on
a discount basis.

Capital Losses.—Capital losses
are allowed qnly to the extent of
capital gains. Anet capital loss, how-
ever, may be\carried back three
years and forward five as a short-
term capital loss. The capital loss
may be carried back only to the ex-
tent it does not increase or produce
a net operating loss in the taxable
year to which it is being carried.
Foreign expropriation capital losses
may not be carried back but may

be carried forward ten years instead
of five.

Under the provisions of section
6411, a quick refund of the tax over-
payment created by the capital loss
carryback may be obtained by filing
Form 1139. If a net capital loss
carryback creates an unused invest-
ment credit or an unused work in-
centive (WIN) credit in a preceding
year, the unused credit may be car-
ried back to the three preceding
years (however, the WIN credit can-
not be carried back to years begin-
ning before 1972), and, under the
provisions of section 6411, a quick
refund of the tax overpayment may
likewise be obtained by filing Form
1139,

Short Sales of Capital Assets.—
For rules relating to certain short
sales of stock or other securities,
and transactions in commodity fu-
tures, see section 1233.

Worthless Securities —Except for
banks, if securities which are capi-
tal assets become wholly worthless
during the taxable year, the loss is
to be treated as a capital loss as of
the last day of the taxable year.

Losses Not Allowable.—No loss
is allowed for wash sales of stock
or securities. (See section 1091.)
No loss is allowed (distributions in
liquidation excepted) on transac-
tions between related persons. (See
section 267.)

Basis.—In determining gain or
loss, the basis of property will gen-
erally be its cost. If property was ac-
quired by bequest, gift, tax-free ex-
change, involuntary conversion, or
wash sale of stock, see sections
1014, 1015, 1031, 1033, and 1091,
respectively. Attach an explanation
if the basis used is other than actual
cash cost of the property.

If a charitable contribution de-
duction is allowed by reason of a sale

‘x US. GOVERNMENT PRINTING OFFICE : 1975—O-573-371

of property to a charitable organiza-
tion, the adjusted basis for deter-
mining gain from the sale is an
amount which is in the same ratio
to the adjusted basis as the amount
realized is to the fair market value.

Insurance Companies.—Compa-
nies taxable under section 831 hav-
ing losses from capital assets sold
or exchanged to obtain funds to
meet abnormal insurance losses,
etc., shall attach a schedule cor-
responding to Schedule A—3 of Form
1120M. For companies taxable un-
der section 821, all references to
line numbers on Form 1120 are to
be considered as references to the
appropriate line on Form 1120M.

PART IV

Alternative Tax Computation.—
Use Form 1120-FY 1974-75 (Rev.
4-75) in order to compute your tax.

Minimum Tax on Tax Preference
Items.—lIf the net long-term capital
gain exceeds the net short-term cap-
ital loss, you may be liable for mini-
mum tax. See Form 4626.

Installment Sales

If you sold personal property for
more than $1,000 or real property
regardless of amount, you may be
eligible to report any gain under the
installment method if (1) there are
no payments in the year of sale or
(2) the payments in the year of sale
do not exceed 30% of the selling
price. (See section 453.) Such sales
must provide for two or more pay-
ments, with at least one payment
being made in each of two taxable
years.

For treatment of a portion of pay-
ments as “‘unstated interest’’ on de-
ferred payment sales, see section
483.

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