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

(Form 1120) To be filed with Forms 1120, 1120-A, 1120-DF, 1120-IC-DISC,

1120-F, 1120-FSC, 1120-H, 1120-L, 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 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 1 Year

5

7 Enter gain from Form 4797, line 8 or 10 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

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 1993.

Section references are to the Internal

Revenue Code.

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

adjustment to section 1250 gains. See the

instructions for Form 4797 for more

information.

For Paperwork Reduction Act Notice, see page 1 of the Instructions for Forms 1120 and 1120-A. Cat. No. 11460M Schedule D (Form 1120) 1993

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 instructions on capital losses for explanation of capital loss carrybacks.

Changes To Note

The Revenue Reconciliation Act of 1993

made the following changes to the tax law:

● Effective for bonds purchased after April

30, 1993, gain on tax-exempt obligations or

other market discount bonds issued on or

before July 18, 1984, is treated as ordinary

income (instead of capital gain) to the extent

of the accrued market discount. See Act

section 13206.

● A corporation that sells publicly traded

securities at a gain after August 9, 1993, may

elect to postpone all or part of the gain if the

seller buys stock or a partnership interest in a

specialized small business investment

company (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

To make the election to postpone gain,

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

For details, see new section 1044.

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 lesser of: (a) $250,000 or

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

excluded under these provisions. The basis of

the SSBIC stock or partnership interest is

reduced by any postponed gain.

purchase, and (d) the new basis in that

SSBIC stock or partnership interest.

Parts I and II

Generally, a corporation must report sales

and exchanges even though there is no gain
Schedule D (Form 1120) 1993 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 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 value exceeds its

adjusted basis. See section 311 for more

information.

● 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.) ● 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 market discount bonds.

● Capital gain distributions.—Report capital

gain distributions paid by mutual funds as

long-term capital gains on line 6 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

Note: For more information, get Pub. 544,

Sales and Other Dispositions of Assets, and

Pub. 542, Tax Information on Corporations.

● 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 that

relates to a passive activity (section 469) may

be required to complete Form 8810,

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 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 for details.

● 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 1 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 full amount of the gain with 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.

● Sale or acquisition of assets.—If the

corporation acquired or disposed of assets

that constitute a business, it may be required

to file Form 8594, Asset Acquisition

Statement.

● Like-kind exchanges.—An exchange of

business or investment property for property

of a like kind is reported on Form 8824,

Like-Kind Exchanges.

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.

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.

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 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.

Printed on recycled paper

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.