SCHEDULE D Capital Gains and Losses

(Form 1120)

To be filed with Forms 1120, 1120-DISC, 1120F, 1120-H,

Department ofthe Treasury 1120L, 1120M, 1120-POL, 990-C, and certain Forms 990-T

Internal Revenue Service

OMB No. 1545-0123

1983

Name

Employer identification number

PART |.— Short-term Capital Gains and Losses—Assets Held One Year or Less

. Kind of \d descripti b, Dat d Date sold Ce her basis, f. C
agkindengperyanédescptin |b Oatezcnured |e Oaeseld, |g crosses ce | Omoratmstacs, | Gunes)
1
2 Short-term capital gain from installment sales from Form 6252, line 21 or 29 2
3 Unused capital loss carryover (attach computation) . 3
4 Netshort-term capital gain or (loss) 4
PART II.— Long-term Capital Gains and Losses—Assets Held More Than One Year
5 _Entergain from Form 4797, line6(ay(1) «ws I 5
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7 Long-term capital gain from installment sales from Form 6252, line 21 or 29. 7
8 __Net long-term capital gain or (loss) . 8
PART III.— Summary of Schedule D Gains and Losses (Form 1120L filers omit ‘ne 1 D
9 Enter excess of net short-term capital gain (line 4) over net long-term capital loss (line 8) . 9
10 Net capital gain. Enter excess of net long-term capital gain (line 8) over net short-term capital loss (line 4) 10
11 Total of lines 9 and 10. Enter here and on Form 1120, line 8, page 1; or the proper line on other returng

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Note: If there is no entry on line 11, see instructions on capital losses for explanation of capital loss Ce ees

PART IV.— Alternative Tax Computation (Forms 1120-H and 1120-DISC filers omit Part IV)

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(b) Others—Enter amount from the proper

Taxable income. Enter the amount from {
line of other returns .

(a) Form 1120, line 30, pagel. . . }

Net capital gain from line 19

Subtract line 13 fromline 12 .

i 1120, Schedule) . . :
taxon line 14 as follows (b) Others—In accordance with the tax computation

Partial tax. Compute the (a) Form 1120—!In accordance with the instructions for Form
{ instructions for applicable return |
28% of line 13.
Alternative tax—total of lines 15 and 16. if less than. amount of tax figured by regular method, enter here

and on Form 1120, Schedule J, line 3; or the proper line on other returns. Also check box for Schedule D

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For Paperwork Reduction Act Notice, see page 1 of Form 1120 instructions.

Schedule D (Form 1120) 1983


Instructions

(Section references are to the Internal Revenue
Code, unless otherwise noted.)

Purpose of Form

Schedule D should be used by a taxpayer who
files either Forms 1120, 1120-DISC, 1120F,
1120-H, 1120L, 1120M, 1120-POL, 990-C, or
certain Forms 990-T, to report sales or
exchanges of capital assets. Sales or exchanges
of property other than capital assets, including
property used in a trade or business, involuntary
conversions (other than casualties or thefts), and
gain from the disposition of interest in oil, gas, or
geothermal property, should be reported on
Form 4797, Supplemental Schedule of Gains
and Losses. See the instructions for Form 4797
for more information.

If property is involuntarily converted because
of a casualty or theft, use Form 4684, Casualties
and Thefts.

Parts | and Il

Generally, you should report the sales and
exchanges, including ‘‘like-kind’’ exchanges,
even though there is no gain or loss. No loss is
allowed for a wash sale of stock or securities or
from a transaction between related persons.
(Sections 1091 and 267.)

In Part | report the sale or exchange of capital
assets held one year or less. In Part I report the
sale or exchange of capital assets held more than
one year.

What are Capital Assets.—Each item of
property you held (whether or not connected
with your trade or business) is a capital asset
except:

1. Assets that can be inventoried or property
held mainly for sale to customers.

2. Depreciable or real property used in the
trade or business.

3. Certain copyrights, literary, musical, or
artistic compositions, letters or
memorandums, or similar property.

4. Accounts or notes receivable acquired in
the ordinary course of trade or business
for services rendered or from the sale of
property described in 1. above.

5. AU.S. Government publication (including
the Congressional Record), received from
the Government or any of its agencies ina
manner other than by buying it at the price
offered for public sale, which is held by a
taxpayer who received the publication or
bya second taxpayer in whose hands the
basis of the publication is determined, for
purposes of determining gain from a sale
or exchange, by referring to its basis in the
hands of the first taxpayer.

Exchange of “like-kind” property.—Report the
exchange of ‘‘like-kind"’ property on Schedule D
or on Form 4797, whichever applies. You must
report it even though no gain or loss is recognized
when you exchange business or investment
property for property of ‘‘like-kind."’ (This does
not include stock in trade or other property held
primarily for sale. It also does not include stocks,
bonds, notes, choses in action, certificates of
trust or beneficial interest, or other securities or
evidences of indebtedness or interest.)

If you use Schedule D, identify in columna,
the property you disposed of. Enter the date you
acquired it in column b, and the date you
exchanged it in column c. Write ‘‘like-kind
exchange’ in column d. Enter the cost or other
basis in column e. Enter zero in column f.

Special Rules for the Treatment of
Certain Gains and Losses

Note: For more information, get Publication
544, Sales and Other Dispositions of Assets.

© Gains and losses on regulated futures
contracts and straddles.— Generally, regulated
future contracts open at the end of the year, or
terminated during the year, are treated as 60%
long-term and 40% short-term regardless of how
long the contracts were held. In addition, losses
from positions that are part of a straddle are not
allowed if the wash sale rules apply or are
deferred to the extent of any unrealized gains on
open offsetting positions. Use Form 6781, Gains
and Losses From Regulated Futures Contracts
and Straddles, to report gains and losses from
regulated futures contracts and straddles.

© Gain or loss on certain short-term Federal,
State, and municipal obligations.—Such
obligations are treated as capital assets in
determining gain or loss. On any gain realized, a
portion is treated as ordinary income and the
balance is considered as a short-term capital
gain. See section 1232(a)(3).

© Gain from installment sales.—if you sold
property at a gain this year and are to receive any
payment in a later tax year, you must use the
installment method and file Form 6252,
Computation of Installment Sale Income.

However, you may elect out of the
installment method by doing the following ona
timely filed return (including extensions):

(2) Enter in the margin of Schedule D, next to
the Sale, ‘I elect out of the installment method.””

(2) If you received a note or other obligation
and are reporting it at less than face value, state
that fact in the margin and give the percentage
of valuation

Also use Form 6252 if you received a
payment in 1983 from a sale made in an earlier
year on the installment basis.

@ Gain or loss on an option to buy or sell
property.—See section 1234 for the rules that
apply to a purchaser or grantor of an option.

@ Gain or loss from a short sale of
property.—Report the gain or loss to the extent
that the property used to close the short sale is.
considered a capital asset in the hands of the
taxpayer.

@ Gains and losses of foreign corporations
from the disposition of investment in United
States real property.—Foreign corporations are
required to report gains and losses from the
disposition of U.S. real property interests. See
section 897 for details.

@ Gains on certain insurance property.—
Form 1120L filers with gains on property held on
December 31, 1958, and certain substituted
property acquired after 1958 should see section
817(b) and related regulations.

@ Loss from the sale or exchange of an
insurance company’s capital assets.—Report
the loss if the assets were sold or exchanged to
get funds to meet abnormal insurance losses. If
you are an insurance company taxed under
section 831 and are reporting a loss on
Schedule D, also attach a schedule similar to
Schedule C of Form 1120M. If you are an
insurance company taxed under section 821, all
references to line numbers on Form 1120 are to
be considered as references to the appropriate
line on Form 1120M.

@ Loss from securities that are capital assets
that become worthless during the year.—
Except for securities held by a bank, treat the
loss as a capital loss as of the last day of the tax
year, (See section 582 for the rules on the
treatment of securities held by a bank.)

How to Determine the Cost or Other
Basis of the Property

In determining gain or loss, the basis of property
will generally be its cost (section 1012). The
‘exceptions to the general rule are provided in
sections contained in subchapters C, K, O, and P
of the Code. For example, if you acquired the
property by dividend, liquidation of a corporation,
transfer from a shareholder, reorganization,
contribution or gift, bequest, bankruptcy, tax-
free exchange, involuntary conversion, of wash
sale of stock, see sections 301, 334, 362 (or
358), 1015, 1014, 372 (or 374), 1031, 1033,
and 1091, respectively. Attach an explanation if
you use a basis other than actual cash cost of the
Property.

If you are allowed a charitable contribution
deduction because you sold property toa
charitable organization, figure the adjusted basis
for determining gain from the sale by dividing the
amount realized by the fair market value and
multiplying that result by the adjusted basis.

Capital Losses.—The amount of capital losses
allowed may not be more than capital gains. A
net capital loss may be carried back 3 years and
forward 5 years as a short-term capital loss.
Carry back a capital loss to the extent it does not
increase or produce a net operating loss in the
tax year to which you carry it. You may not carry
back foreign expropriation capital losses, but you
may carry them forward 10 years instead of 5. A
net capital loss for a regulated investment
company may be carried forward 8 years instead
of 5.

At risk limitations (section 465).—If you sold
or exchanged an asset used in an activity to
which the at risk rules apply, combine the gain or
loss on the sale or exchange with the profit or
loss from the activity. If you have a net loss from
the activity, it may be subject to the at risk rules.

Part IlI—Summary of Schedule D
Gains and Losses

If the net long-term capital gain is more than the
net short-term capital loss, there is a net capital
gain. In that case, you may want to complete
Part IV to determine if the resulting alternative
tax is less than the tax figured using the regular
method.

Part IV—Alternative Tax
Computation

@ Forms 1120-H and 1120-DISC filers omit
Part IV.

@ Form 1120L filers see Form 1120L
instructions for line 6 before figuring the
alternative tax.

In figuring the alternative tax, you do not
have to refigure deductions limited by the
amount of taxable income (such as contributions
and the special deductions in Schedule C of
Form 1120).

If the alternative tax amount on line 17 is less
than the tax figured by the regular method, enter
the amount of alternative tax on Form 1120,
Schedule J, line 3; or the proper line on other
returns. Also check the box for Schedule D.

If there is a net capital gain, you may be liable
for minimum tax. See Form 4626, Computation
of Minimum Tax—Corporations, for more
information.