SCHEDULE D OMB No. 1545-0123 Capital Gains and Losses (Form 1120) To be filed with Forms 1120, 1120-A, 1120-DF, 1120-IC-DISC,

1120F, 1120-FSC, 1120-H, 1120L, 1120-ND, 1120-PC, 1120-POL,

1120-REIT, 1120-RIC, 990-C, and certain Forms 990-T

Department of the Treasury

Internal Revenue Service

Name Employer identification number

Short-Term Capital Gains and Losses—Assets Held 1 Year or Less

(f) Gain or (loss)

((d) less (e))

(e) Cost or other

basis, plus expense

of sale

(c) Date sold

(mo., day, yr.)

(b) Date acquired

(mo., day, yr.)

(a) Kind of property and

description (Example, 100 shares

of ‘‘Z’’ Co.)

(d) Gross sales price

1

2 Short-term capital gain from installment sales from Form 6252, line 22 or 30 2

3 Unused capital loss carryover (attach computation) 3 ( )

4 Net short-term capital gain or (loss). (Combine lines 1 through 3.) 4

Long-Term Capital Gains and Losses—Assets Held More Than 1 Year

5

6 Enter gain from Form 4797, line 7 or 9 6

7 Long-term capital gain from installment sales from Form 6252, line 22 or 30 7

8 Net long-term capital gain or (loss). (Combine lines 5 through 7.) 8

Summary of Parts I and II

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 Add lines 9 and 10. Enter here and on Form 1120, line 8, page 1; or the proper line on other returns 11

Note: If losses exceed gains, see instructions on capital losses for explanation of capital loss carrybacks.

If property is involuntarily converted

because of a casualty or theft, use Form

4684, Casualties and Thefts.

Purpose of Schedule

Instructions

Schedule D is used to report sales and

exchanges of capital assets for tax years

beginning in 1991 if one of the following

forms is being filed: Forms 1120,

1120-A, 1120-DF, 1120-IC-DISC, 1120F,

1120-FSC, 1120-H, 1120L, 1120-ND,

1120-PC, 1120-POL, 1120-REIT,

1120-RIC, 990-C, or certain Forms

990-T.

(Section references are to the Internal

Revenue Code.)

Parts I and II

Generally, a corporation must report

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 (including contracts or options

to acquire or sell stock or securities) or

from a transaction between related

persons. See sections 1091 and 267 for

details and exceptions.

Sales or exchanges of property other

than capital assets are reported on

Form 4797, Sales of Business Property.

A sale or exchange of property includes

property used in a trade or business,

involuntary conversions (other than

casualties or thefts), gain from the

disposition of oil, gas, or geothermal

property, and the section 291

Use Part I to report the sale or

exchange of capital assets held 1 year

or less. Use Part II to report the sale or

exchange of capital assets held more

than 1 year.

For Paperwork Reduction Act Notice, see page 1 of the Instructions for Forms 1120 and 1120-A. Schedule D (Form 1120) 1991

What Is a Capital Asset?—Each item of

property the corporation held (whether

or not connected with its 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. A U.S. Government publication

(including the Congressional Record)

received from the Government or any of

its agencies in a manner other than

buying it at the price offered for public

sale, which is held by a taxpayer who

Cat. No. 11460M

Part I

Part II

Part III

adjustment to section 1250 gains. See

the instructions for Form 4797 for more

information.
Schedule D (Form 1120) 1991 Page 2

● Gains on certain insurance

property.—Form 1120L filers with gains

on property held on December 31, 1958,

● Gain or loss from shares purchased

in a regulated investment company

(RIC).—In some cases, the load charge

(advance charge for sales fees) incurred

to purchase shares in a RIC may not be

allowed when figuring the basis for gain

or loss on the disposition of the shares.

See section 852(f) if the shares were

disposed of within 90 days of purchase,

and the load charge on stock

subsequently acquired in that RIC (or

another RIC) was reduced because of a

reinvestment right.

● Gain on distributions of appreciated

property.—Generally, gain (but not loss)

is recognized on a nonliquidating

distribution of appreciated property to

the extent that the property’s fair market

● Gain or loss on distribution of

property in complete liquidation.—

Generally, gain or loss is recognized on

property distributed in a complete

liquidation. Treat the property as if it had

been sold at its fair market value. An

exception to this rule applies for

liquidations of certain subsidiaries. See

sections 336 and 337 for more

information and other exceptions to the

general rules.

● Loss from the sale or exchange of

capital assets of an insurance

company taxable under section 831.—

Under the provisions of section 834(c)(6),

capital losses of a casualty insurance

company are deductible to the extent

that the assets were sold to meet

abnormal insurance losses or to provide

for the payment of dividend and similar

distributions to policyholders.

● 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.)

Exchange of ‘‘like-kind’’ property.—A

“like-kind exchange” occurs when the

corporation exchanges business or

investment property for property of like

kind. Report the exchange of like-kind

property on Schedule D or Form 4797,

whichever applies, even if no gain or

loss is recognized. Also, complete and

attach to the tax return Form 8824,

Like-Kind Exchanges, for each

exchange.

● 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 as a short-term capital

gain. See section 1271.

● Disposition of market discount

bonds.—See section 1276 for rules on

the disposition of any market discount

bonds issued after July 18, 1984.

● Capital gain distributions.—Report

capital gain distributions paid by mutual

funds as long-term capital gains on line

5 regardless of how long the corporation

owned stock in the fund.

Determining the Cost or

Other Basis of Property

In determining gain or loss, the basis of

property will generally be its cost. See

section 1012 and the related regulations.

Exceptions to the general rule are

provided in sections in subchapters C,

K, O, and P of the Code. For example, if

the corporation acquired the property by

dividend, liquidation of a corporation,

transfer from a shareholder,

reorganization, bequest, contribution or

gift, tax-free exchange, involuntary

conversion, certain asset acquisitions, or

wash sale of stock, see sections 301 (or

1059), 334, 362 (or 358), 1014, 1015,

1031, 1033, 1060, and 1091,

respectively. Attach an explanation if the

corporation uses a basis other than

actual cash cost of the property.

Special Rules for the

Treatment of Certain Gains

and Losses 1. Include the full amount of the sale

on Schedule D.

Note: For more information, get Pub.

544, Sales and Other Dispositions of

Assets, and Pub. 542, Tax Information

on Corporations. See the cited code

sections for details.

2. If the corporation received a note or

other obligation and is reporting it at less

than face value (including all contingent

obligations), state that fact in the margin

and give the percentage of valuation. ● At-risk limitations (section 465).—If

the corporation sold or exchanged a

capital 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 the

result is a net loss, complete Form

6198, At-Risk Limitations. Report any

gain from the capital asset on Schedule

D and on Form 6198.

The installment method may not be

used for sales of stock or securities (or

certain other property described in the

regulations) traded on an established

securities market. See section 453(k).

● Gain or loss on an option to buy or

sell property.—See sections 1032 and

1234 for the rules that apply to a

purchaser or grantor of an option.

If the corporation is allowed a

charitable contribution deduction

because it sold property to a 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.

● 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 from passive

activities.—A closely held or personal

service corporation that has a gain or

loss which relates to a passive activity

(section 469) may be required to

complete Form 8810, Corporate Passive

Activity Loss and Credit Limitations,

before completing Schedule D. A

Schedule D loss may be limited under

the passive activity rules. See Form

8810 for more detailed information.

Capital losses.—Capital losses are

allowed only to the extent of 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 it is carried.

Foreign expropriation capital losses may

not be carried back, but may be carried

forward 10 years. A net capital loss for a

regulated investment company may be

carried forward 8 years.

● 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.

On Schedule D, write “From Form

8824” for the description of the

property, and enter the gain or loss

from Form 8824, if any. If an

exchange was made with a related

party, write “Related Party Like-Kind

Exchange” in the top margin of

Schedule D.

● Gain from installment sales.—Use

Form 6252, Installment Sale Income, to

report a gain from the casual sale of real

or personal property (other than

inventory) if payments will be received in

more than one tax year. See the

instructions below for how to elect out

of the installment method. Also use

Form 6252 if a payment is received this

year from a sale made in an earlier year

on the installment method.

To elect out of the installment method,

report the following on a timely filed

return (including extensions):

● Gains and losses on section 1256

contracts and straddles.—Use Form

6781, Gains and Losses From Section

1256 Contracts and Straddles, to report

these gains and losses.

received the publication or by a 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.

value exceeds its adjusted basis. See

section 311 for more information.

and certain substituted property

acquired after 1958 should see section

818(c).