Instructions For Form 1120-Ic-Disc - 2004 (Page 10 of 15) in pdf

•

The dividends-received deduction on line

For certain contributions, the long-term

An employee of the IC-DISC must be

6b, page 1,

capital gain that would have resulted if the

present at the meal.

•

The deduction allowed under section 249,

property were sold at its FMV.

Membership dues. The IC-DISC may

•

Any net operating loss (NOL) carryback to

deduct amounts paid or incurred for

The reduction for the long-term capital

the tax year under section 172, and

membership dues in civic or public service

gain applies to:

•

Any capital loss carryback to the tax year

Contributions of tangible personal

organizations, professional organizations,

under section 1212(a)(1).

property for use by an exempt organization

business leagues, trade associations,

Carryover. Charitable contributions over

chambers of commerce, and boards of

for a purpose or function unrelated to the

the 10% limitation may not be deducted for

trade. However, no deduction is allowed if a

basis for its exemption,

•

the tax year but may be carried over to the

principal purpose of the organization is to

Contributions of any property to or for the

next 5 tax years.

entertain, or provide entertainment facilities

use of certain private foundations except for

stock for which market quotations are

for, members or their guests. In addition,

Substantiation requirements. Generally,

readily available (section 170(e)(5)), and

IC-DISCs may not deduct membership dues

no deduction is allowed for any contribution

•

in any club organized for business,

Any patent or certain other intellectual

of $250 or more unless the IC-DISC gets a

pleasure, recreation, or other social

property contributed after June 3, 2004. See

written acknowledgment from the donee

purpose. This includes country clubs, golf

section 170(e)(1)(B). However, the IC-DISC

organization that shows the amount of cash

and athletic clubs, airline and hotel clubs,

can deduct certain qualified donee income

contributed, describes any property

and clubs operated to provide meals under

from this property. See section 170(m).

contributed, and, either gives a description

conditions favorable to business discussion.

and a good faith estimate of the value of any

Larger deduction. A larger deduction is

goods or services provided in return for the

Entertainment facilities. The IC-DISC

allowed for certain contributions of:

•

contribution or states that no goods or

cannot deduct an expense paid or incurred

Inventory and other property to certain

services were provided in return for the

for a facility (such as a yacht or hunting

organizations for use in the care of the ill,

contribution. The acknowledgment must be

lodge) used for an activity usually

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

obtained by the due date (including

Regulations section 1.170A-4A),

considered entertainment, amusement, or

•

extensions) of the IC-DISC’s return, or, if

Scientific equipment used for research to

recreation.

earlier, the date the return is filed. Do not

institutions of higher learning, or to certain

Amounts treated as compensation.

attach the acknowledgment to the tax return,

scientific research organizations (see

Generally, the IC-DISC may be able to

but keep it with the IC-DISC’s records.

section 170(e)(4)), and

deduct otherwise nondeductible meals,

•

These rules apply in addition to the filing

Computer technology and equipment for

travel, and entertainment expenses if the

requirements for Form 8283, Noncash

educational purposes (see section

amounts are treated as compensation to the

Charitable Contributions, described below.

170(e)(6)).

recipient and reported on Form W-2 for an

employee or on Form 1099-MISC for an

For more information on charitable

Line 2e. Freight

independent contractor.

contributions, including substantiation and

Enter freight expense not deducted on line

recordkeeping requirements, see section

However, if the recipient is an officer,

1h as export promotion expense.

170 and the related regulations and Pub.

director, or beneficial owner (directly or

526, Charitable Contributions.

Line 2g. Other Expenses

indirectly) of more than 10% of any class of

Contributions of property other than

stock, the deduction for otherwise

Enter any other allowable deduction not

cash. If an IC-DISC contributes property

nondeductible meals, travel, and

claimed on line 1 or lines 2a through 2f.

other than cash and claims over a $500

entertainment expenses incurred after

Generally, a deduction may not be taken

deduction for the property, it must attach a

October 22, 2004, is limited to the amount

for any amount that is allocable to a class of

schedule to the return describing the kind of

treated as compensation. See section

exempt income. See section 265(b) for

property contributed and the method used to

274(e)(2).

exceptions.

determine its fair market value (FMV). The

Deduction for clean-fuel vehicles and

Note. Do not deduct fines or penalties paid

IC-DISC generally must complete and

certain refueling property. Section 179A

to a government for violating any law.

attach Form 8283 to its return for

allows a deduction for part of the cost of

contributions of property (other than money)

Special rules apply to the following

qualified clean-fuel vehicle property and

if the total claimed deduction for all property

expenses:

qualified clean-fuel vehicle refueling

contributed was more than $5,000.

Travel, meals, and entertainment. Subject

property placed in service during the tax

to the limitations and restrictions discussed

year. For details, see Pub. 535, Business

If the IC-DISC made a “qualified

below, an IC-DISC can deduct ordinary and

Expenses.

conservation contribution” under section

necessary travel, meals, and entertainment

170(h), also include the FMV of the

Lobbying expenses. Generally, lobbying

expenses paid or incurred in its trade or

underlying property before and after the

expenses are not deductible. These

donation, as well as the type of legal interest

business. Also, special rules apply to

expenses include:

•

deductions for gifts, skybox rentals, luxury

contributed, and describe the conservation

Amounts paid or incurred in connection

water travel, convention expenses, and

purpose benefited by the donation. If a

with influencing Federal or state legislation

entertainment tickets. See section 274 and

contribution carryover is included, show the

(but not local legislation) or

•

Pub. 463 for more details.

amount and how it was determined.

Amounts paid or incurred in connection

Contributions after June 3, 2004. For

Travel. The IC-DISC cannot deduct

with any communication with certain Federal

travel expenses of any individual

contributions of certain property made after

executive branch officials in an attempt to

accompanying a corporate officer or

influence the official actions or positions of

June 3, 2004, an IC-DISC must file Form

employee, including a spouse or dependent

the officials. See Regulations section

8283 and get a qualified appraisal if claiming

of the officer or employee, unless:

1.162-29 for the definition of “influencing

a deduction of more than $5,000. Do not

•

That individual is an employee of the

legislation.”

attach the appraisal to the tax return unless

IC-DISC and

claiming a deduction of more than $500,000,

Dues and other similar amounts paid to

•

or, for art, a deduction of $20,000 or more.

His or her travel is for a bona fide

certain tax-exempt organizations may not be

business purpose and would otherwise be

See Form 8283.

deductible. See section 162(e)(3). If certain

deductible by that individual.

Contributions of used vehicles.

in-house lobbying expenditures do not

Meals and entertainment. Generally,

Special rules apply to contributions after

exceed $2,000, they are deductible. For

the IC-DISC can deduct only 50% of the

2004 of used motor vehicles, boats, or

information on contributions to charitable

amount otherwise allowable for meals and

airplanes with a claimed value of more than

organizations that conduct lobbying

$500. See section 170(f)(12).

entertainment expenses paid or incurred in

activities, see section 170(f)(9).

its trade or business. In addition (subject to

Reduced deduction for contributions

For more information on other deductions

exceptions under section 274(k)(2)):

of certain property. For a charitable

that may apply to corporations, see Pub.

•

Meals must not be lavish or extravagant;

contribution of property, the IC-DISC must

535.

•

A bona fide business discussion must

reduce the contribution by the sum of:

•

occur during, immediately before, or

The ordinary income and short-term

immediately after the meal; and

capital gain that would have resulted if the

property were sold at its FMV and

-10-

Instructions for Form 1120-IC-DISC

Instructions For Form 1120-Ic-Disc - 2004 Page 10

Related Articles

Related forms

Related Categories