Gain from installment sales.   If the corporation sold property at a gain and it will receive a payment in a tax year after the year of sale, it generally must report the sale on the installment method unless it elects not to. However, the installment method may not be used to report sales of stock or securities traded on an established securities market.

  Use Form 6252, Installment Sale Income, to report the sale on the installment method. Also use Form 6252 to report any payment received during the tax year from a sale made in an earlier year that was reported on the installment method. To elect out of the installment method, report the full amount of the gain on Schedule D for the year of the sale on a return filed by the due date (including extensions). If the original return was filed on time without making the election, the corporation may make the election on an amended return filed no later than 6 months after the original due date (excluding extensions). Write “Filed pursuant to section 301.9100-2” at the top of the amended return.

Rollover of gain from empowerment zone assets.   If the corporation sold a qualified empowerment zone asset held for more than 1 year, it may be able to elect to postpone part or all of the gain that would otherwise be included on Schedule D. If the corporation makes the election, the gain on the sale generally is recognized only to the extent, if any, that the amount realized on the sale exceeds the cost of qualified empowerment zone assets (replacement property) the corporation purchased during the 60-day period beginning on the date of the sale. The following rules apply.

  See Pub. 954, Tax Incentives for Distressed Communities, for the definition of empowerment zone and enterprise zone business. The corporation can find out if its business is located within an empowerment zone by using the RC/EZ/EC Address Locator at http://www.hud.gov/crlocator.

  Qualified empowerment zone assets are:

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 (FMV) exceeds its adjusted basis. See section 311.

Exclusion of gain from DC Zone assets.   If the corporation sold or exchanged a District of Columbia Enterprise Zone (DC Zone) asset held for more than 5 years, it may exclude any qualified capital gain. The exclusion applies to an interest in, or property of, certain businesses operating in the District of Columbia.

Exclusion of gain from qualified community assets.   If the corporation sold or exchanged a qualified community asset acquired after December 31, 2001, and held for more than 5 years, it may exclude any qualified capital gain. The exclusion applies to an interest in, or property of, certain qualified community assets.

Gain on the constructive sale of 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 (but not loss) if it enters into a constructive sale (such as a “short sale against the box”). See Pub. 550, Investment Income and Expenses.

Gain from certain constructive ownership transactions.   Gain in excess of the underlying net long-term capital gain the corporation would have recognized if it had held a financial asset directly during the term of a derivative contract must be treated as ordinary income. See section 1260. If any portion of the constructive ownership transaction was open in any prior year, the corporation may have to pay interest. See section 1260(b) for details, including how to figure the interest. Include the interest as an additional tax on Form 1120, Schedule J, line 9 (or the applicable line for other income tax returns).

Rollover of publicly traded securities gain into specialized small business investment companies (SSBICs).   If the corporation sold publicly traded securities, it may elect under section 1044(a) to postpone all or part of the gain on that sale if it bought common stock or a partnership interest in an SSBIC during the 60-day period that began on the date of the sale. 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 to the extent the sale proceeds exceed the cost (not taken into account previously) of its SSBIC stock or partnership interest purchased during the 60-day period that began on the date of the sale. The gain a corporation may postpone each tax year is limited to the smaller of (a) $1 million, reduced by the gain previously excluded under section 1044(a) or (b) $250,000. Reduce the basis of the SSBIC stock or partnership interest by any postponed gain.

  To make the election, report the entire gain realized on the sale on line 1 or 6, whichever applies, in column (f). Directly below the line on which the gain is reported, enter in column (a), “SSBIC Rollover.” Enter the amount of the postponed gain (in parentheses) in column (f). Also attach a schedule showing (a) how the postponed gain was figured, (b) the name of the SSBIC stock in which the common stock or partnership interest was purchased, (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.

  The corporation must make the election no later than the due date (including extensions) for filing its tax return for the year in which it sold the securities or partnership interest. If the original return was filed on time without making the election, the corporation may make the election on an amended return filed no later than 6 months after the original due date (excluding extensions). Write “Filed pursuant to section 301.9100-2” at the top of the amended return.

Gain on disposition of market discount bonds.   See section 1276 for rules on the disposition of market discount bonds.

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).

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.

Gains and losses of foreign corporations from the disposition of investment in U.S. real property.   Foreign corporations must report gains and losses from the disposition of U.S. real property interests. See section 897.

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 FMV. 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.

Gain or loss on certain asset transfers to a tax-exempt entity.   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 FMV. For details, see Regulations section 1.337(d)-4.

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 or a securities futures contract (as defined in section 1234B). See Pub. 550 for details.

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.

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 any remaining balance as a short-term capital gain. See section 1271.

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.

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) 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.

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.

Losses limited after an ownership change or acquisition.   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 prechange 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 preaquisition capital losses.

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).

Gains and losses from partnerships.   Report the corporation's share of capital gains and losses from investments in partnerships. Report a net short-term capital gain (loss) in Part I. On line 1, column (a), write “From Schedule K-1 (Form 1065).” Enter the amount of the gain (loss) in column (f). Report net long-term capital gains (losses) in Part II. On line 6, column (a), enter “From Schedule K-1 (Form 1065).” Enter the amount of the gain (loss) in column (f).