Schedule D (Form 1120) 1962

Alternative Tax Computation for Calendar Year 1962

13. Line 1, Tax Computation, page 3, Form 1120.........00eeeeeees
14. Net long-term capital gain reduced by any net short-term capital loss (line 10(b), Part IV, page 1)

18. Line 13 minus line 14
16. If amount of line 15 is:

(a) Not over $25,000—Enter 30 percent of line 15 (32 percent if a consolidated return) ............045
(b) Over $25,000—Enter 52 percent of line 15 (54 percent if a consolidated return)... ..

Subtract $5,500 and enter difference.

17. Adjustment for partially tax-exempt interest; enter 30 percent of line 1, Schedule I, page 3, Form 1120, but not in

excess of 30 percent of line 15 above
18. Partial tax (line 16 less line 17)
19. 25 percent of line 14
20. Alternative tax (line 18 plus line 19).

21. Normal tax and surtax (line 4, Tax Computation, page 3, Form 1120)
Enter here and on line 5, Tax Computation,

22. Income tax (line 20 or 21, whichever is lesser).

page 3, Form 1120

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. Such
term also includes timber and coal with respect to which section
631 applies as well as unharvested crops to which section
1231(b)(4) applies. Such 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 2 determines whether the
items reflected therein represent a long-term capital gain or an
ordinary loss. The total must be entered on the first line of the
appropriate Schedules of Part II or Part III.

For special treatment of gain or loss upon the cutting of timber, or
upon the disposal of timber or coal under a contract by which the
owner retains an economic interest in such timber or coal, 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 tox.—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 against
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 tox conse-
quences 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.

Instructions For Insurance Companies Using This
Schedule

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 corre-
sponding to Schedule B, Form 1120M. For companies taxable
under section 821, all references to “line” numbers, Foon 1120,
shall be considered as references to the appropriate “line” in
Form 1120M.

U.S. GOVERNMENT PRINTING OFFICE : 1963 0—108394-A



SCHEDULE D U.S, Treasury Department—Internal Revenue Service
(Form 1120) | GAINS AND LOSSES FROM SALES OR EXCHANGES OF PROPERTY | 1962
Name and address Employer identification number

PART I.—SALE OR EXCHANGE OF PROPERTY UNDER SECTION 1231 (See Instructions)

Depreciation allowed £, Cost or other basis,

z. Gain oF loss.

a, Kind of property (if necessary, attach statement of | b. Date acquired | | ¢. Date sold | d. Grass sales price | (or allowable) since a
osenptive detats nat Shown Below) Bn ae | mas (Days, | “ceimnract ices | austen or March ae a ota GG plus e less f)
1913 (Attach schedule) | ee nace of sale

2. Total (If gain, enter on line 6 below; if logs, enter in Part III.)

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

4, Unused capital loss carryover from five preceding taxable years

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

(attach statement) $$

7, Total of long-term capital gains or losses or difference between long-term capital gains and losses ........-eeeeeees

PART III.—PROPERTY OTHER THAN CAPITAL ASSETS

Enter here and on line 11, Part IV, below...
PART IV.—TOTAL SCHEDULE D GAINS AND LOSSES

Total net gain (or loss).

Classification a. Loss b. Gain

8. Net short-term capital gain or loss from line 5
9. Net long-term capital gain or loss from line 7 . eee :
10(q). Net short-term capital gain (line 8, col. b) ‘reduced by any net long-term capital loss

(ine 9; col. a)... XXXXXEEKKE
(b). Net long-term capital gain (line 9, col. b) reduced by any net short-term capital loss
Gine 8, col. a) (XXXEXEEEXE

11. Net gain (loss) other than capital assets from Part IIl.....
12. Total lines 10(a), 10(b), and 11. Enter here and on Form 1120, page 1, line 9...........++-.+-++11



Schedule D (Form 1120) 1962

Alternative Tax Computation for Calendar Year 1962

13. Line 1, Tax Computation, page 3, Form 1120..... a

14. Net long-term capital gain reduced by any net short-term capital loss (line 10(6), Part IV, page 1)
18, Line 13 minus line 14.......csseeeseeeeeeeeeeeeeeenees seen

16. If amount of line 15 is:

(a) Not over $25,000—Enter 30 percent of line 15 (32 percent if a consolidated return) .
(6) Over $25,000—Enter 52 percent of line 15 (64 percent if a consolidated return)...

Subtract $5,500 and enter difference.............+

i.
excess of 30 percent of line 15 above.
Partial tax (line 16 less line 17)....
25 percent of line 14............ :
Alternative tax (line 18 plus line 19).

18.
19.
20.
21,
22. Income tax (line 20 or 21, whichever is lesser).

Normal tax and surtax (line 4, Tax Computation, page 3, Form 1120) .
Enter here and on line 8, Tax Computation, page 3, Form 1120...

5,500.00
Adjustment for partially tax-exempt interest; enter 30 percent of line 1, Schedule I, page 3, Form 1120, but not in

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 and
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 sustained 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.

Enter full description of each item of property sold or exchanged,
even though no gain or loss may be indicated.

Basis,—Property acquired before March 1, 1913, For GAIN
use cost or fair market value as of March 1, 1913, adjusted as
provided in section 1016, whichever is greater. For LOSS, use
cost so adjusted, After February 28, 1913, use cost for both gain
or loss except where property was acquired by bequest, gift, tax-
free exchange, involuntary conversion, or wash sale of stock; see
sections 1014, 1018, 1031, 1033, and 1091, respectively. If the
amount shown as the basis is other than actual cash cost of the
property sold or exchanged, full details must be furnished regard-
ing the acquisition of the property.

Losses on securities becoming worthless.—If any securities
(as defined below) 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 con-
sidered as a loss from the sale or exchange, on the last day of
such taxable year, of capital assets. Section 165(g)(1).

Definition of security.—For the purpose of determining capital
losses under section 165, the term “security” means a share of
stock in a corporation; a right to subscribe for, or to receive, a
share of stock; or a bond, debenture, note, or certificate, or other
evidence of indebtedness, issued by a corporation or by a govern-
ment or political subdivision thereof, with interest coupons or in
registered form. However, securities issued by certain affiliated
corporations shall not be deemed capital assets.

Losses not allowable.—No loss shall be recognized in any sale
or other disposition of shares of stock or securities where there has
been acquired substantially identical stock or securities, or there
has been entered into a contract or option to acquire substantially
identical stock or securities, within 30 days before or after the
date of such sale or disposition, except in cases of dealers in stocks
and securities which have sustained the loss in a transaction made
in the ordinary course of business, Section 1091.

Except in the case of distributions in liquidation, no deduction
shall be allowed in respect of losses from sales or exchanges of
property, directly or indirectly, between an individual and a
corporation in which such individual owns, directly or indirectly,
more than 5O percent in value of the outstanding stock; or (except
in the case of distributions in liquidation) between two corpora-
tions more than 50 percent in value of the outstanding stock of each
‘of which is owned, directly or indirectly, by or for the same indi-
vidual, if either one of such corporations, with respect to the
taxable year of the corporation preceding the date of the sale or
exchange was, under the law applicable to such taxable year,
(1) a personal holding company, as defined in section 542, or
(2) a foreign personal holding company, as defined in section 552.
(or the purpose of determining thé ownership of stock, in applying
this paragraph, see section 267.)

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,

(Instructions continued on reverse of duplicate)



SCH EDULE D U.S. Treasury Department—Internal Revenue Service
(Form 1120) | GAINS AND LOSSES FROM SALES OR EXCHANGES OF PROPERTY | 1962
Name and address Employer identification number

PART 1.—SALE OR EXCHANGE OF PROPERTY UNDER SECTION 1231 (See Instructions)
f. Cost of other basis,

e, Depreciation allowed |
4, Kind of property (if necessary, attach statement of | b. Date acquired | | c. Date sold | d. Gross sales price | or allowable) since | cast of subsequent im- , Gain oF lo
descriptive details not shown below) oe Sage te | mos Day Se, |“ nttat pres” | seuulstton or are | provements oot pur-| GT ss

1913 (Attach schedule) | chased attach explena:

Total (If gain, enter on line 6 below; if loss, enter in Part III.)

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

4. Unused capital loss carryover from five preceding taxable years (attach statement) oe see
5. 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 for More Than 6 Months

7. Total of long-term capital gains or losses or difference between long-term capital gains and losses .

PART III.—PROPERTY OTHER THAN CAPITAL ASSETS

Total net gain (or loss). Enter here and on line 11, Part IV, below.....
PART IV.—TOTAL SCHEDULE D GAINS AND LOSSES

Classification a. Loss b. Gain

8. Net short-term capital gain or loss from line 5 .
9. Net long-term capital gain or loss from line 7...
10(a). Net short-term capital gain (line 8, col. b) reduced by any net long-term capital loss
(ine 9, cola)... be ebeeeedeeeeeeeeeseeeseseeeeteneeae eens sete

(b). Net long-term capital gain (line 9, col. b) reduced by any net short-term capital loss
Gine 8, col. a)

11. Net gain (loss) other than capital assets from Part II
12, Total lines 10(a), 10(b), and 11, Enter here and on Form 1120, page 1, line 9.......--.-- os