Instructions For Form 1120-Pc - 2002 (Page 12 of 20) in pdf

applied using taxable income after taking

included, show the amount and how it

Eligible donee. The term “eligible

into account any deduction for the NOL.

was determined.

donee” means:

•

An educational organization that

To figure the amount of any remaining

Reduced deduction for

normally maintains a regular faculty and

NOL carryover to later years, taxable

contributions of certain property. For a

curriculum and has a regularly enrolled

income must be modified (see section

charitable contribution of property, the

body of pupils in attendance at the place

172(b)). To the extent that contributions

corporation must reduce the contribution

where its educational activities are

are used to reduce taxable income for this

by the sum of:

•

regularly conducted,

purpose and increase an NOL carryover,

The ordinary income and short-term

•

A section 501(c)(3) entity organized

a contributions carryover is not allowed.

capital gain that would have resulted if the

primarily for purposes of supporting

See section 172(d)(2)(B).

property had been sold at its FMV and

•

elementary and secondary education, or

For certain contributions, the long-term

•

Substantiation requirements.

A public library (as described in section

capital gain that would have resulted if the

Generally, no deduction is allowed for any

170(e)(6)(B)(i)(III).

property had been sold at its FMV.

contribution of $250 or more unless the

Exceptions. The following exceptions

The reduction for long-term capital

corporation obtains a written

apply to the above rules for computer

gain applies to:

acknowledgment from the donee

•

technology and equipment:

Contributions of tangible personal

organization that shows the amount of

•

Contributions to private foundations

property for use by an exempt

cash contributed, describes any property

may qualify if the foundation contributes

organization for a purpose or function

contributed, and either gives a description

the property to an eligible donee within 30

unrelated to the basis for its exemption

and a good faith estimate of the value of

days after the contribution and notifies the

and

any goods or services provided in return

•

donor of the contribution. For more

Contributions of any property to or for

for the contribution or states that no

details, see section 170(e)(6)(C).

the use of certain private foundations

goods or services were provided in return

•

For contributions of property reacquired

except for stock for which market

for the contribution. The acknowledgment

by the manufacturer of the property, the 3

quotations are readily available (section

must be obtained by the due date

year period begins on the date that the

170(e)(5)).

(including extensions) of the corporation’s

original construction of the property was

return, or if earlier, the date the return is

Larger deduction. A larger deduction

substantially completed. Also, the original

filed. Do not attach the acknowledgment

is allowed for certain contributions of:

use of the property may be by someone

•

to the tax return, but keep it with the

Inventory and other property to certain

other than the donor or donee.

corporation’s records. These rules apply

organizations for use in the care of the ill,

Line 22. Depreciation. Besides

in addition to the filing requirements for

needy, or infants (see section 170(e)(3)

depreciation, include on line 22 the part of

Form 8283, Noncash Charitable

and Regulations section 1.170A-4A);

the cost that the corporation elected to

•

Contributions described below.

Scientific equipment used for research

expense under section 179 for certain

For more information on substantiation

to institutions of higher learning or to

tangible property placed in service during

and recordkeeping requirements, see the

certain scientific research organizations

tax year 2002 or carried over from 2001.

regulations under section 170 and Pub.

(see section 170(e)(4)); and

See Form 4562 and its instructions.

•

526, Charitable Contributions.

Computer technology and equipment

Line 23. Depletion. See sections 613

for educational purposes.

Contributions to organizations

and 613A for percentage depletion rates

conducting lobbying activities.

Contributions of computer

applicable to natural deposits. Also, see

Contributions made to an organization

technology and equipment for

section 291 for the limitation on the

that conducts lobbying activities are not

educational purposes. A corporation

depletion deduction for iron ore and coal

deductible if:

may take an increased deduction under

(including lignite).

•

The lobbying activities relate to matters

section 170(e)(6) for qualified

Attach Form T (Timber), Forest

of direct financial interest to the donor’s

contributions of computer technology or

Activities Schedule, if a deduction for

trade or business and

equipment for educational purposes.

•

depletion of timber is taken.

The principal purpose of the

Computer technology or equipment

Foreign intangible drilling costs and

contribution was to avoid Federal income

means computer software, computer or

tax by obtaining a deduction for activities

foreign exploration and development

peripheral equipment, and fiber optic

that would have been nondeductible

costs must either be added to the

cable related to computer use. A

corporation’s basis for cost depletion

under the lobbying expense rules if

contribution is a qualified contribution if:

•

conducted directly by the donor.

purposes or be deducted ratably over a

It is made to an eligible donee (see

10-year period. See sections 263(i), 616,

Contribution of property other than

below);

•

and 617 for details.

cash. If a corporation (other than a

Substantially all of the donee property’s

Line 24. Pension, profit-sharing, etc.,

closely held corporation) contributes

use is:

plans. Enter the deduction for

property other than cash and claims over

1. Related to the purpose or function

contributions to qualified pension,

a $500 deduction for the property, it must

of the donee,

profit-sharing, or other funded deferred

attach a schedule to the return describing

2. For use within the United States,

compensation plans. Employers who

the kind of property contributed and the

and

maintain such a plan generally must file

method used to determine its fair market

3. For educational purposes.

•

one of the forms listed below, even if the

value (FMV). Closely-held corporations

The contribution is made not later than

plan is not a qualified plan under the

generally must complete Form 8283 and

3 years after the date the taxpayer

Internal Revenue Code. The filing

attach it to their returns. All other

acquired or substantially completed the

requirement applies even if the

corporations generally must complete and

construction of the property;

•

corporation does not claim a deduction for

attach Form 8283 to their returns for

The original use of the property is by

the current tax year. There are penalties

contributions of property (other than

the donor or the donee;

•

for failure to file these forms on time and

money) if the total claimed deduction for

The property is not transferred by the

for overstating the pension plan

all property contributed was more than

donee for money, services, or other

deduction. See sections 6652(e) and

$5,000.

property, except for shipping, transfer,

6662(f).

If the corporation made a “qualified

and installation costs;

•

Form 5500, Annual Return/Report of

conservation contribution” under section

The property fits productively into the

Employee Benefit Plan. File this form for

170(h), also include the FMV of the

donee’s education plan; and

•

a plan that is not a one-participant plan

underlying property before and after the

The property meets standards, if any,

(see below).

donation, as well as the type of legal

that may be prescribed by future

interest contributed, and describe the

regulations, to assure it meets minimum

Form 5500-EZ, Annual Return of

conservation purpose benefited by the

functionality and suitability for educational

One-Participant (Owners and Their

donation. If a contribution carryover is

purposes.

Spouses) Retirement Plan. File this form

-12-

Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2002 Page 12

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