SCHEDULE D Capital Gains and Losses
(Form 1120)

Department of the Treasury

Internal Revenue Service J

For the calendar year 1972, or other taxable year beginning

- 1972, and ending ...

| 1972

Name

| Employer Identification Number

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

a. Kind of erty and jisserintion b, Date acquired c: Date sold ic e. Cost or other basis
(Gxample, 100 shares of 2" mo., day, ye) (mo., day, yt.) 4. Gross sales price | “ona expense of sale

f. Gain or (loss)
(d less 0)

2
3

Unused capital loss carryover (attach computation) . . - . -/ 6 1 ee ee ee
Net short-term capital gain or (loss)

4

Long-term Capital Gains and L Losses—Assets Held More Than é Months ;

Enter Section 1231 gain from line 4(a)(1), Form 4797... . . ss se

6

Ea Summary of Schedule D Gains and Losses .

6 Net long-term capital gain or (loss). -

7
8
9

Enter excess of net short-term capital gain (line 3) over net long-term capital loss (line 6)
Enter excess of net long-term capital gain (line 6) over net short-term capital loss (line 3)
Total of lines 7 and 8. Enter here and on Form 1120, pagel, line9(a) . . «. - » . ss eee

[zual@e Alternative Tax Computation (See instructions)

10
11
12
13

14
15
16
17
18
19
20

21

22
23
24
25

Taxable income (line 1, Schedule J, page 3, Form1120). «6 6 6 ee ee ee ee ee
Excess of net long-term capital gain over net short-term capital loss (line8) . 2. 2. . 2 ew ee
Line10lesslinell . . . se ee ee sone wee eee
Surtax exemption—Enter line 120 or $25, 000, whichever is lesser. (Component members of a controlled
group—enter your surtax exemption or line 12, whichever is lesser) . . . «. . ss ew we ee
Line12lessline13 2 1 1 we ee ee

22% of line 12 2 6 ee ee

26% ofline 14 2. 2 ee ee ee ee -

If multiple surtax exemption is elected under section 1562, enter 6% of tine 13 oo

Total of lines 15,16,and17 «1 we ee ee
Enter amount from line 11 2. 1 ew ee ee
Enter long-term gain from certain binding contracts and installment sales (referred to as ‘‘subsection
(d) gains’—see instructions)... / ee ee
Line 19 less line 20 (if less than zero, enter zero) . . 1 ee ee ee ee ee ee
25% of the lesser of line19orline20 . 2 1 1 ee ee ee
30% ofline2l 2. ee
Total of lines 22 and 23. «1 ee we ee ee oe . we ee
Alternative tax—total of lines 18 and 24. If applicable, enter here and on n line 5, Schedule 4, Form 1120,

and write “‘ALT."’ in the margin to the right of the entry . . . . _ _

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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 the 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 only to the extent of
capital gains. A net 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
back. 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 taxes af-
fected by the capital loss carryback
may be obtained by filing Form
1139. If a net capital loss carry-
back creates an unused investment
credit in a preceding year, the un-
used credit may be carried back to
the three preceding years, and, un-
der the provisions of section 6411, a
quick refund of the taxes affected
may likewise be obtained by filing
Form 1139.

Instructions

(References are to the Internal Revenue Code)

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 ofa sale
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.—If
the net long-term capital gain ex-
ceeds the net short-term capital
loss, or if there is only a net long-
term capital gain, compute the tax
using the alternative method (sec-
tion 1201) to determine if the result-
ing tax is less than the tax computed
using the regular method.

‘Ye US, GOVERNMENT PRINTING OFFICE: 1972~O-458-100

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 ex-
cess of net long-term capital gain
over any net short-term capital loss
and (2) 30% of such excess.

An alternative tax rate of 25%,
however, is to apply to the lesser of
(1) the amount of ‘‘subsection (d)
gain” or (2) the excess of net long-
term capital gain over any net short-
term capital loss.

Subsection (d) gain consists of:

(1) long-term capital gains (ex-
cept sections 631 and 1235 gains)
received before 1975 from sales or
other dispositions under binding
contracts that were entered into on
or before October 9, 1969; and

(2) installment proceeds consist-
ing of long-term capital gains (ex-
cept gains under sections 631 and
1235) received before 1975 from
sales made pursuant to a binding
contract that was entered into on or
before October 9, 1969.

In computing the alternative tax,
deductions subject to a limitation
based upon taxable income (such as
contributions and the special deduc-
tions in Schedule 1) do not have to
be recomputed.

Minimum Tax on Tax Preference
Items.—If 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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