Schedule D (Form 1120) 1964

PART V.—TOTAL SCHEDULE D GAINS AND LOSSES

13. Enter the excess of net short-term capital gain (line 8) over net long-term capital loss (line 10).....
14, Enter the excess of net long-term capital gain (line 10) over net short-term capital loss (line 8).
18, Net gain (loss) from property other than capital assets (line 12) .
16, Total lines 13, 14 and 15, enter here and on Form 1120, page 1, line 9..

Alternative Tax Computation.

(Component members of controlled corporate group use Form 3920 to compute your tax)

17. Taxable income (line 30, page 1, Form 1120)

18. Net long-term capital gain reduced by any net short-term capital loss (line 14).

19, Line 17 minus line 18
20. If amount of line 19 is:
(a) Not over $25,000—Enter 22 percent of line 19.

(b) Over $25,000—Enter 50 percent of line 19. .
Subtract $7,000 and enter difference.

21. 25 percent of line 18.
22. Alternative tax (line 20 plus line 21).
the margin to the right of the entry. .

If applicable, enter on line 3, Schedule J, Form 1120, and write ‘alt.’ in

INSTRUCTIONS (Continued from reverse side of original)

Gains and losses from involuntary conversion and from the
sale or exchange of certain property used in the trade or
business.—The term “property used in the trade or business,” as
used in section 1231, means property which has been held more
than 6 months, which is used in the trade or business, and which
is either real property or property subject to depreciation under
section 167, and which is not (a) property of a kind which would
properly be includible in the inventory of the taxpayer if on hand
at the close of the taxable year, (b) property held by the taxpayer
primarily for sale to customers in the ordinary course of its trade
or business, or (c) certain copyrights or similar properties. This
term also includes timber, coal and domestic iron ore to which
section 631 applies as well as unharvested crops to which section
1231(b)(4) applies. This term also includes livestock (but not
poultry) held for draft, breeding, or dairy purposes and held for
12 months or more from the date of acquisition.

Section 1231 provides special treatment for the gains and losses
upon the sale or exchange of “property used in the trade or busi-
ness” and upon the compulsory or involuntary conversion of (1)
such property and (2) capital assets held for more than 6 months.
Such gains and losses during the taxable year are treated as
gains and losses from the sale or exchange of capital assets held
for more than 6 months, if the aggregate of such gains exceeds the
‘aggregate of such losses. If, however, such gains do not exceed
such losses, such gains and ‘losses shall not be treated as gains
and losses from the sale or exchange of capital assets.

In determining whether gains do or do not exceed losses, it is
necessary to include the gains and losses to the extent that they
would be included if they were all ordinary gains and losses. The
limitation of section 1211 on the deductibility of capital losses
does not operate to exclude any such losses from the computation
as to the excess of gains over losses, but all such losses are in-
cluded in full. The total shown on line 5 determines whether the
items reflected therein represent a long-term capital gain or an
ordinary loss. The total must be entered on line 9 or line 11,
whichever is applicable.

For special treatment of gain or loss upon the cutting of timber, or
upon the disposal of timber, coal, or domestic iron ore under a
contract by which the owner retains an economic interest in the
timber, coal, or iron ore, see section 631.

Long-term capital gains from regulated investment com-
panies.—Include in income as a long-term capital gain the
amount the corporation has been notified constitutes its share of
the undistributed capital gains of a regulated investment com-
pany.

Alternative tax.—If for any taxable year the net long-term
capital gain exceeds the net short-term capital loss, or if there is
only a net long-term capital gain, section 1201 imposes an alterna-
tive tax in lieu of the normal tax and surtax imposed upon taxable
income, if any, only if such tax is less than the tax imposed by
section 11 (relating to normal tax and surtax on corporations),
sections 821 and 831 (relating to normal tax and surtax on insur-
ance companies, other than life insurance companies), or section
511(a)(1) (relating to taxation of business income of certain
organizations described in section 511(a)(2)). The alternative

tax is the sum of (1) a partial tax, computed at the normal tax and
surtax rates on the taxable income decreased by the amount of
the excess of the net long-term capital gain over the net short-
term capital loss, and (2) 25 percent of such excess.

If the corporation computes an alternative tax under section
1201 and is entitled to special deductions for dividends received
(sections 243, 244, 245), the special deduction for dividends paid
(section 247), the special deduction for a Western Hemisphere
trade corporation (section 922), or the special deduction for a
China Trade Act corporation (section 941), such special deduc-
tions are to be based upon taxable income including the excess
of net long-term capital gain over net short-term capital loss.

Bonds, etc., losses of banks.—In the case of a bank, as
defined in section 581, if the losses in the taxable year from sales
or exchanges of bonds, debentures, notes, or certificates, or other
evidences of indebtedness, issued by any corporation (including
one issued by a government or political subdivision thereof) exceed
the gains from such sales or exchanges, such excess shall be
considered as an ordinary loss and deductible in full againet
other income. Section 582.

Dealers in securities. Capital gains and ordinary losses.—
Under the provisions of section 1236, gain by a dealer in securities
from the sale or exchange of a security, as defined in section 1236,
shall in no event be considered as gain from the sale or exchange
of a capital asset unless (a) the security was, before the expiration
of the thirtieth day after the date of its acquisition, clearly identified
in the dealer's records as a security held for investment or, if
acquired before October 20, 1951, was so identified before
November 20, 1951; and (b) the security was not, at any time
after the expiration of such thirtieth day, held by the dealer
primarily for sale to customers in the ordinary course of trade or
business. A loss from the sale or exchange of a security shall, if
section 582(c) is not applicable, be considered a capital loss if
at any time after November 19, 1951, the security was clearly
identified in the dealer's records as a security held for investment.

Short sales of capital assets.—For rules regarding tax conse-

ruences of certain short sales of stock or other securities (including
those dealt with on a “when issued” basis), and transactions in
commodity futures, see section 1233,

Fiscal year taxpayers with taxable income over $25,000.—
In computing the 1964 portion of the alternative tax for line 4 of
Schedule FY (Form 1120), use the rates on the form, In comput-
ing the 1965 portion of the alternative tax for line 5 of Schedule
FY (Form 1120), use 48 percent instead of 50 percent and sub-
tract $6,500 instead of $7,000.

Instructions for insurance companies using this sched-
ule.—Companies taxable under section 831 and having losses
from capital assets sold or exchanged in order to obtain funds
to meet abnormal insurance losses, etc., shall attach a schedule
corresponding to Schedule A-3, Form 1120M. For companies
taxable under section 821, all references to “line” numbers, Form
1120, shall be considered as references to the appropriate “line”
in Form 1120M.

Yr U.S. GOVERNMENT PRINTING OFFICE :1964—O—725-554


US, Treasury Department—Internal Revenue Service

SCHEDULE D
(Form 1122) | GAINS AND LOSSES FROM SALES OR EXCHANGES OF PROPERTY 1964

Name and address

PART I.—GAIN FROM DISPOSITION OF DEPRECIABLE PROPERTY UNDER SECTIONS 1245 AND 1250—Assets Held More
Than 6 Months—Where double headings appear, use the first heading for section 1245 and the second heading for section 1250.

| @. Cost or other basis, cost of
a, Kind of property (if necessary, attach statement of b. Date acquired c. Date sold . Gross sales price ‘subsequent improvements (if

descriptive details not shown below) (mo., day, yr.) (mo., day, yr) ot purchased, attach expla-
nation) and expense of sale

f, Depreciation allowed (or allowable) since acquisition
(attach schedule) i Ordinary gain
ce ed Missed basis 9 otal gin er ote or h) J other gain
7 (e less sum of f-1 and f-2 lesse) = |---| fess 1
to January 1, 1962 | -2, After December 31, 1961 ‘Gee instructions)

2. Total ordinary gain. Enter here and on line 11 and identify as gain from Part I.
3. Total other gain. Enter here and on line 4 and identify as gain from PartI...
PART II.—SALE OR EXCHANGE OF PROPERTY UNDER SECTION 1231

1. Cost or other basis,

€, Depreciation allowed| Gost of 7

‘a, Kind of property (if necessary, attach statement | b, Date acquired | _c. Date sold (or allowable) since | Cost of subsequent im- Gain or loss

of descriptive details not shown below) (mo, day, yr.) | (mo., day, yr.) | % Gross sales price acquisition ae etc enotane: G plus etess
(attach schedule) | ionyand expense of sale

5. Total (If gain, enter on line 9; if loss, enter on line 11. Identify as gain or loss from Part I.)....................

PART III.—CAPITAL ASSETS
Short-Term Capital Gains and Losses—Assets Held Not More Than 6 Months

Nn

. Unused capital loss carryover (attach statement) .
. Total of short-term capital gains or losses or difference between short-term capital gains and losses. . .

‘Long-Term Capital Gains and Losses—Assets Held More Than 6 Months

°

10. Total of long-term capital gains or losses or difference between long-term capital gains and losses...............-.-
PART IV.—PROPERTY OTHER THAN CAPITAL ASSETS

12, Total net gain (or loss), Enter here and on line 15....................-- eeeerrererer reser pttseesess eee:

050—16—78387-1


Sched

D (Form 1120) 1964

PART V.—TOTAL SCHEDULE D GAINS AND LOSSES

13. Enter the excess of net short-term capital gain (line 8) over net long-term capital loss (line 10)
14, Enter the excess of net long-term capital gain (line 10) over net short-term capital loss (line 8)

15. Net gain (loss) from property other than capital assets (line 12)

16. Total lines 13, 14 and 15, enter here and on Form 1120, page 1, line 9.

Alternative Tax Computation

(Component members of controlled corporate group use Form 3920 to compute your tax)

17. Taxable income (line 30, page 1, Form 1120)

18. Net long-term capital gain reduced by any net short-term capital loss (line 14)

19, Line 17 minus line 18.
20. If amount of line 19 is:
(a) Not over $25,000—Enter 22 percent of line 19.

(b) Over $25,000—Enter 50 percent of line 19 ..
Subtract $7,000 and enter difference.

21. 25 percent of line 18........ ced eeceeeeeeeeeeeseeeeeeteeees

22. Alternative tax (line 20 plus line 21).

If applicable, enter on line 3, Schedule J, Form 1120, and write “alt.” in
the margin to the right of the entry................05 tees

7,000.00

INSTRUCTIONS

(References are to the Internal Revenue Code)

Gains and losses from sales or exchanges of capital assets
and other property.—Report sales or exchanges of capital assets
and sales or exchanges of property other than capital assets in
Schedule D. Every sale or exchange of property, even though no
gain or loss may be indicated, must be reported in detail.

Losses from sales or exchanges of capital assets shall be allowed
only tothe extent of gains from such sales or exchanges. However,
the amount of a net capital loss sustained in any taxable year may
be carried over to each of the five succeeding taxable years (or
tothe extent such loss is attributable to a foreign expropriation loss
to each of the ten succeeding taxable years). A net capital loss
shall be treated in each such succeeding taxable year as a
short-term capital loss to the extent not allowed as a deduction
against any net capital gains of any taxable year intervening
between the taxable year in which the net capital loss was sus-
tained and the taxable year to which carried.

Definition of capital assets.—The term “capital assets’
means property held by the taxpayer (whether or not connected
with its trade or business) but does not include (1) stock in trade
of the taxpayer or other property of a kind which would properly
be included in the inventory of the taxpayer if on hand at the
close of the taxable year, or property held by the taxpayer
primarily for sale to customers in the ordinary course of its trade
or business; or (2) property used in the trade or business, of a
character which is subject to the allowance for depreciation
provided in section 167, or real property used in the trade or
business of the taxpayer; or (3) certain copyrights, literary,
musical, or artistic compositions, or similar properties; or (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; or (5) an obligation of the United States
or any of its possessions, or of a State, or any political subdivision
thereof, or of the District of Columbia, issued on or after March 1,
1941, on a discount basis and payable without interest at a fixed
maturity date not exceeding 1 year from the date of issue.

Basis.—In determining gain or loss for property acquired after
February 28, 1913, use cost, except where property was acquired
by bequest, gift, tax-free exchange, involuntary conversion, or wash
sale of stock; see sections 1014, 1015, 1031, 1033, and 1091, re-
spectively. If the amount shown as the basis is other than actual
cash cost of the property sold or exchanged, full details must be
furnished regarding the acquisition of the property.

Losses on securities becoming worthless.—If any securities
become worthless within the taxable year and are capital assets,
the loss resulting therefrom shall, in the case of a taxpayer other
than a bank, as defined in section 581, be considered as a loss
from the sale or exchange, on the last day of such taxable year,
of capital assets. Section 165(g)(1).

Losses not allowable.—No loss is recognized for wash sales of
stock or securities. Section 1091.

No loss is allowed (except distributions in liquidation) between
related persons. Section 267.

(Instructions continued on reverse of duplicate)

Gains from section 1245 or 1250 property held more than 6
months (Part I).—(Report any gain from such property
held for 6 months or less in Part IV.) Except as provided
below section 1245 property means depreciable (a) personal prop-
erty (other than livestock) including intangible personal property;
(b) tangible real property (except for buildings and their structural
components) if used as an integral part of manufacturing, produc-
tion, or extraction, or of furnishing transportation, communications,
electrical energy, gas, water, or sewage disposal services, or used
as a research or storage facility in connection with these activities;
and (c) elevators or escalators.

Except as provided below section 1250 property means de-
preciable real property (other than section 1245 property).

See sections 1245(b) and 1250(d) for exceptions and limita-
tions involving: (a) disposition by gift; (b) certain tax-free trans-
actions; (c) like kind exchanges, involuntary conversions; and (a)
sales or exchanges to effectuate FCC policies and exchanges to
comply with S.E.C. orders.

Column f of Part I.—In computing depreciation allowed or
allowable for elevators or escalators enter in column f-] deprecia-
tion prior to July 1, 1963, and in column f-2 depreciation after
June 30, 1963.

Column i of Part I, section 1250 property only.—If held for
more than 6 months, but not more than 1 year, enter the smaller of
(1) column h, or
() column #2,
If held for more than 1 year, enter the result of multiplying the
smaller of
(1) column h, or
(2) column £2 less the amount of depreciation computed for
the same period using the straight line method,
by the percentage obtained by subtracting from 100%, one per-
centage point for each full month the property was held in excess
of 20 months, Where substantial improvements have been
made within the preceding ten years, see section 1250()).

Gain on sales by a ‘‘controlled”’ corporation.—In the case of
a sale or exchange, directly or indirectly, of property between an
individual and a corporation more than 80 percent in value of the
outstanding stock of which is owned by such individual, his spouse,
and his minor children and minor grandchildren, any gain recog-
nized to the transferor from such sale or exchange shall be treated
as gain from the sale or exchange of property which is neither a
capital asset nor property described in section 1231, if such prop-
erty in the hands of the transferee is depreciable under section
167. Section 1239,

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 plan if (1) there is no pay-
ment in the year of sale, or (2) the payments in the year of sale do
not exceed 30% of the selling price. Section 453.

For treatment of a portion of payments as “unstated interest’
on deferred payment sales, see Section 483,

€50—16—78387-1


US. Treasury Department—Internal Revenue Service

SCHEDULE D
(Form 1120) GAINS AND LOSSES FROM SALES OR EXCHANGES OF PROPERTY 1964

Name and address

PART I.—GAIN FROM DISPOSITION OF DEPRECIABLE PROPERTY UNDER SECTIONS 1248 AND 1250—Assets Held More
Than 6 Months—Where double headings appear, use the first heading for section 1248 and the second heading for section 1250.

@. Cost or other basis, cost of

a. Kind of property (if necessary, attach statement of b, Date acquired c. Date sold subsequent improvements (if
descriptive details not shown below) (mo,, day, yt.) (mo., day, yt.) 4. Gross sales price ‘not purchased, attach expla-
nation) and expense of sale

{. Depreciation allowed (or allowable) since acquisition
(attach schedule) | Ordinay gi

g, Adjusted basis. fh, Total gain
(e tess sum of f-1 and f-2) (d less g)

i. Other gain
(hiless i)

f-1. Prior to een 1962 | 1-2. After December 31, 1961

2. Total ordinary gain. Enter here and on line 11 and identify as gain from Part 1.
3. Total other gain. Enter here and on line 4 and identify as gain from Part 1.

PART II.—SALE OR EXCHANGE OF PROPERTY UNDER “SECTION 1231

f. Cost or other basis,

e, Depreciation allowed zi

a. Kind of property (if necessary, attach statement |b. Date acquired |. Date sold | 4 gross sales price | (OF allowable) since | Costof subsequent im: | Gain of loss

of descriptive details not shown below) (mo,, day, yr.) | (mo., day, yr.) | % , acquisition Chased attach explana Gd plus ¢ less f)
(attach schedule) _|tion)and expense of sale

5. Total (If gain, enter on line 9; if loss, enter on line 11. Identify as gain or loss from Part II.).

PART III.—CAPITAL ASSETS
Short-Term Capital Gains and Losses—Assets Held Not More Than 6 Months

1. Unused capital loss carryover (attach statement)..............-....5-

8. Total of short-term capital gains or losses or difference between short-term capital gains sand losses.
Long-Term Capital Gains and Losses—Assets Held More Than 6 Months

9. .-|---

‘otal of long-term capital gains or losses or difference between long-term capital gains and losse:
PART IV.—PROPERTY OTHER THAN CAPITAL ASSETS

12, Total net gain (or loss). Enter here and on line 1s.

16—78387-1