SCHEDULE D Capital Gains and Losses OMB No. 1545-0123

(Form 1120)  Attach to Form 1120, 1120-A, 1120-F, 1120-FSC, 1120-H,

1120-IC-DISC, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT,

1120-RIC, 1120-SF, 990-C, or certain Forms 990-T. Department of the Treasury

Internal Revenue Service

Name Employer identification number

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

(f) Gain or (loss)

(Subtract (e) from (d))

(e) Cost or other

basis (see

instructions)

(c) Date sold

(mo., day, yr.)

(b) Date acquired

(mo., day, yr.)

(a) Description of property

(Example, 100 shares of Z Co.)

(d) Sales price

(see instructions)

1

2 Short-term capital gain from installment sales from Form 6252, line 26 or 37 2

( )

3

Unused capital loss carryover (attach computation)

3

4

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

4

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

5

7 Enter gain from Form 4797, column (g), line 7 or 9 7

8 Long-term capital gain from installment sales from Form 6252, line 26 or 37 8

10 Net long-term capital gain or (loss). Combine lines 6 through 9

9

Summary of Parts I and II

11 Enter excess of net short-term capital gain (line 5) over net long-term capital loss (line 10) 11

12 Net capital gain. Enter excess of net long-term capital gain (line 10) over net short-term capital loss (line 5) 12

13 Add lines 11 and 12. Enter here and on Form 1120, page 1, line 8, or the proper line on other returns 13

● Use Form 4684, Casualties and Thefts, to

report property involuntarily converted

because of a casualty or theft.

Purpose of Schedule

Instructions

Use Schedule D to report sales and

exchanges of capital assets and gains on

distributions to shareholders of appreciated

capital assets.

Section references are to the Internal

Revenue Code unless otherwise noted.

● Use Form 4797, Sales of Business

Property, to report sales, exchanges, and

distributions of property other than capital

assets. Include on Form 4797: (a) a sale,

exchange, or distribution of property used in

a trade or business, (b) involuntary

conversions (from other than casualties or

thefts), (c) gain from the disposition of oil,

gas, or geothermal property, and (d) the

section 291 adjustment to section 1250

gains. See the instructions for Form 4797.

For Paperwork Reduction Act Notice, see page 1 of the Instructions for Forms 1120 and 1120-A. Cat. No. 11460M Schedule D (Form 1120) 1999

Short-term gain or (loss) from like-kind exchanges from Form 8824

5

6

9 Long-term gain or (loss) from like-kind exchanges from Form 8824

10

Part I

Part II

Part III

Note: If losses exceed gains, see Capital losses in the instructions below.

Parts I and II

Generally, a corporation must report sales

and exchanges even if there is no gain or

loss. Use Part I to report the sale, exchange,

or distribution of capital assets held 1 year or

less. Use Part II to report the sale, exchange,

or distribution of capital assets held more

than 1 year. Use the trade dates for the dates

of acquisition and sale of stocks and bonds

traded on an exchange or over-the-counter

market.

Capital assets. Each item of property the

corporation held (whether or not connected

with its trade or business) is a capital asset

except:

● Stock in trade or other property included in

inventory or held mainly for sale to

customers.

● Depreciable or real property used in the

trade or business.

● Certain copyrights; literary, musical, or

artistic compositions; letters or memoranda;

or similar property. See section 1221(3).

● Accounts or notes receivable acquired in

the ordinary course of the trade or business

for services rendered or from the sale of

stock in trade or other property included in

inventory or held mainly for sale to

customers.

● U.S. Government publications, including

the Congressional Record, that the

corporation received from the Government,

other than by purchase at the normal sales

price, or that the corporation got from

another taxpayer who had received it in a

similar way, if the corporation’s basis is

determined by reference to the previous

owner’s basis.

Capital losses. Capital losses are allowed

only to the extent of capital gains. A net

capital loss is 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 cannot be carried

back, but are carried forward 10 years. A net

capital loss for a regulated investment

company is carried forward 8 years.

1999

Note: For more information, get Pub. 544,

Sales and Other Dispositions of Assets, and

Pub. 542, Corporations.

Other Forms the Corporation

May Have To File

Items for Special Treatment

● Gain from installment sales. If the

corporation has a gain this year from the

casual sale of real or personal property (other

than inventory) and will receive any payment

in a later year, it must use the installment

method (unless it elects not to—see page 2).

File Form 6252, Installment Sale Income. Also

use Form 6252 if a payment is received this

year from a sale reported in an earlier year on

the installment method. ● Use Form 6781, Gains and Losses From

Section 1256 Contracts and Straddles, to

report these gains and losses.

● Use Form 8824, Like-Kind Exchanges, to

report an exchange of business or investment

property for property of a like kind.
Schedule D (Form 1120) 1999 Page 2

● Gains on certain insurance property.

Form 1120-L filers with gains on property

held on December 31, 1958, and certain

substituted property acquired after 1958,

should see section 818(c).

● 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 value exceeds its

adjusted basis. See section 311. ● 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. 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. See section

834(c)(6).

● 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.

● Gain or loss on certain short-term

Federal, state, and municipal obligations.

These 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 gain on market discount

bonds. See section 1276 for rules on the

disposition of market discount bonds.

● Capital gain distributions. Report on line 6

as long-term capital gain the capital gain

distributions paid by a regulated investment

company (RIC) or a real estate investment

trust (REIT), regardless of how long the

corporation owned stock in the RIC or REIT.

Specific Instructions

Column (e)—Cost or other basis. In general,

the basis of property will be its cost. See

section 1012 and the related regulations.

Special rules for determining basis are

provided in sections in subchapters C, K, O,

and P of the Code. These rules may apply to

the corporation on the receipt of certain

distributions with respect to stock (section

301 or 1059), liquidation of another

corporation (334), transfer to another

corporation (358), transfer from a shareholder

or reorganization (362), bequest (1014),

contribution or gift (1015), tax-free exchange

(1031), involuntary conversion (1033), certain

asset acquisitions (1060), or wash sale of

stock (1091). Attach an explanation if the

corporation uses a basis other than actual

cash cost of the property.

● 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 in a bargain sale 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.

No loss is allowed in a bargain sale to a

charity.

● 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 that 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.

● Constructive sales treatment for certain

appreciated financial positions. Generally, if

the corporation holds an appreciated financial

position in stock or certain other interests, it

may have to recognize gain if it enters into a

constructive sale (such as a “short sale

against the box”). See Pub. 550, Investment

Income and Expenses.

The corporation may elect out of the

installment method by reporting the full

amount of the gain on a timely filed return

(including extensions). See Regulations

section 301.9100-2 to make the election on

an amended return within 6 months of the

due date (excluding extensions).

● Rollover of publicly traded securities

gain into specialized small business

investment companies (SSBICs). A

corporation that sells publicly traded

securities at a gain may elect under section

1044 to postpone all or part of the gain if the

seller buys stock or a partnership interest in

an SSBIC during the 60-day period that

begins on the date the securities are sold.

An SSBIC is any partnership or corporation

licensed by the Small Business Administration

under section 301(d) of the Small Business

Investment Act of 1958. The corporation must

recognize gain on the sale to the extent the

proceeds from the sale exceed the cost of

the SSBIC stock or partnership interest

purchased during the 60-day period that

began on the date of the sale (and not

previously taken into account). The gain a

corporation may postpone each tax year is

limited to the smaller of (a) $250,000 or

(b) $1 million, reduced by the gain previously

excluded under section 1044. The basis of

the SSBIC stock or partnership interest is

reduced by any postponed gain.

To make the election, complete line 1 or

line 6, whichever applies, showing the entire

gain realized in column (f). Directly below the

line on which the gain is reported, enter

“SSBIC Rollover” in column (a). Enter the

amount of the postponed gain (in

parentheses) in column (f). Also, attach a

schedule showing (a) how you figured the

postponed gain, (b) the name of the SSBIC in

which you purchased common stock or a

partnership interest, (c) the date of that

purchase, and (d) the new basis in that

SSBIC stock or partnership interest.

For more details, see section 1044 and

Regulations section 1.1044(a)-1.

See section 852(f) for the treatment of

certain load charges incurred in acquiring

stock in a RIC with a reinvestment right.

● Loss from a sale or exchange between

the corporation and a related person.

Except for distributions in complete

liquidation of a corporation, no loss is allowed

from the sale or exchange of property

between the corporation and certain related

persons. See section 267.

● Loss from a wash sale. The corporation

cannot deduct a loss from a wash sale of

stock or securities (including contracts or

options to acquire or sell stock or securities)

Column (d)—Sales price. Enter either the

gross sales price or the net sales price. If the

net sales price is entered, do not increase the

cost or other basis in column (e) by any

expenses reflected in the net sales price.

If the gross sales price is reported in

column (d), increase the cost or other basis

by any expense of sale such as broker’s fees,

commissions, or option premiums before

entering an amount in column (e).

● Gains and losses of foreign corporations

from the disposition of investment in U.S.

real property. Foreign corporations are

required to report gains and losses from the

disposition of U.S. real property interests. See

section 897.

● Gain or loss on certain asset transfers to

a tax-exempt entity. For transfers of assets

occurring after January 28, 1999, a taxable

corporation that transfers all or substantially

all of its assets to a tax-exempt entity or

converts from a taxable corporation to a

tax-exempt entity in a transaction other than

a liquidation, generally must recognize gain or

loss as if it had sold the assets transferred at

their fair market value. For details, see

Regulations section 1.337(d)-4.

The election to postpone gain must be

made no later than the due date (including

extensions) for filing the corporation’s return

for the tax year the corporation sold the

stock. See Regulations section 301.9100-2 to

make the election on an amended return

within 6 months of the due date (excluding

extensions).

● Losses limited after an ownership

change or aquisition. If the corporation has

undergone an “ownership change” as defined

in section 382(g), section 383 may limit the

amount of capital gains that may be offset by

pre-change capital losses. Also, if a

corporation acquires control of another

corporation (or acquires its assets in a

reorganization), section 384 may limit the

amount of recognized built-in capital gains

that may be offset by pre-aquisition capital

losses.

unless the corporation is a dealer in stock or

securities and the loss was sustained in a

transaction made in the ordinary course of

the corporation’s trade or business. A wash

sale occurs if the corporation acquires (by

purchase or exchange), or has a contract or

option to acquire, substantially identical stock

or securities within 30 days before or after the

date of the sale or exchange. See section

1091.