Instructions For Form 1120-Pc - 2008 (Page 11 of 20) in pdf

produce the property. See section 263A(f)

Limitation on deduction. The total

corporation gets a written

and Regulations section 1.263A-8

amount claimed cannot be more than

acknowledgment from the donee

through 1.263A-15 for definitions and

10% of taxable income (line 37, Schedule

organization that shows the amount of

more information.

A) computed without regard to the

cash contributed, describes any property

•

Interest paid or incurred on any portion

following.

contributed, and, either gives a

•

of an underpayment of tax that is

Any deduction for contributions.

description and a good faith estimate of

•

attributable to an understatement arising

The deduction for dividends received.

the value of any goods or services

•

from an undisclosed listed transaction or

The domestic production activities

provided in return for the contribution or

an undisclosed reportable avoidance

deduction under section 199.

states that no goods or services were

•

transaction (other than a listed

Any net operating loss (NOL) carryback

provided in return for the contribution. The

transaction) entered into in tax years

to the tax year under section 172.

acknowledgment must be obtained by the

•

beginning after October 22, 2004.

Any capital loss carryback to the tax

due date (including extensions) of the

year under section 1212(a)(1).

corporation’s return, or, if earlier, the date

Special rules apply to:

•

the return is filed. Do not attach the

Disqualified interest on certain

Temporary suspension of 10% limit

acknowledgment to the tax return, but

indebtedness under section 163(j). See

for contributions to Midwestern

keep it with the corporation’s records.

Form 8926, Disqualified Corporate

disaster areas. A corporation can elect to

Interest Expense Disallowed Under

deduct qualified cash contributions

Contributions of property other than

Section 163(j) and Related Information,

without regard to the general 10% limit, if

cash. If a corporation contributes

and the related instructions.

the contributions were paid after May 1,

property other than cash and claims over

•

Interest on which no tax is imposed

2008, and before January 1, 2009, to a

a $500 deduction for the property, it must,

(see section 163(j)). A corporation that

qualified charitable organization (as

generally, attach a schedule to the return

owns an interest in a partnership, directly

defined in section 170(b)(1)(A) (except for

describing the kind of property contributed

or indirectly, must treat its distributive

contributions to a section 509(a)(3)

and the method used to determine its fair

share of the partnership liabilities, interest

organization or a donor advised fund

market value (FMV). Generally, attach

income, and interest expense as

(defined in section 4966(d)(2))), and were

Form 8283, Noncash Charitable

liabilities, income, and expenses of the

for relief efforts in one or more

Contributions, to the return for

corporation for purposes of applying the

Midwestern disaster areas. The

contributions of property (other than

earnings stripping rules. For more details,

corporation must obtain

money) if the total claimed deduction for

see section 163(j)(8).

contemporaneous written

all property contributed was more than

•

Foregone interest on certain

acknowledgment from the organization

$5,000. Special rules apply to the

below-market-rate loans (see section

that the contribution was used (or will be

contribution of certain property. See the

7872).

used) for relief efforts in one or more

Instructions for Form 8283.

•

Original issue discount on certain

Midwestern disaster areas. The total

Qualified conservation contributions.

high-yield discount obligations. (See

amount claimed cannot exceed 100% of

Special rules apply to qualified

section 163(e) to figure the disqualified

the excess of the corporation’s taxable

conservation contributions, including

portion.)

income (as computed under Limitation on

•

contributions of certain easements on

Interest which is allocable to

deduction above, substituting “100%” for

buildings located in a registered historic

unborrowed policy cash values of life

“10%”) over the corporation’s deduction

district. See Section 170(h) and Pub. 526,

insurance, endowment, or annuity

for all other charitable contributions. Any

Charitable Contributions.

contracts issued after June 8, 1997. See

excess contributions can be carried over

section 264(f). Attach a statement

to the next five years. For more

Other special rules. The corporation

showing the computation of the

information, see Pub. 4492-B.

must reduce its deduction for

deduction.

contributions of certain capital gain

Carryover. Charitable contributions

property. See sections 170(e)(1) and

Line 20b. Less tax-exempt interest

over the 10% limitation cannot be

170(e)(5).

expense. Enter interest paid or accrued

deducted for the tax year but may be

during the tax year on indebtedness

carried over to the next 5 tax years.

A larger deduction is allowed for

incurred or continued to purchase or carry

certain contributions of:

Special rules apply if the corporation

obligations if the interest is wholly exempt

•

Inventory and other property to certain

has an NOL carryover to the tax year. In

from income tax. For exceptions, see

organizations for use in the care of the ill,

figuring the charitable contributions

section 265(b).

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

deduction for the current tax year, the

Line 21. Charitable contributions.

including contributions of “apparently

10% limit is applied using taxable income

Enter contributions or gifts actually paid

wholesome food” (see section

after taking into account any deduction for

within the tax year to or for the use of

170(e)(3)(C)) and contributions of

the NOL.

charitable and governmental

qualified book inventory to public schools

To figure the amount of any remaining

organizations described in section 170(c)

(see section 170(e)(3)(D)),

NOL carryover to later years, taxable

•

and any unused contributions carried over

Scientific equipment used for research

income must be modified (see section

from prior years. Special rules and limits

to institutions of higher learning or to

172(b)). To the extent that contributions

apply to contributions to organizations

certain scientific research organizations

are used to reduce taxable income for this

conducting lobbying activities. See

(other than by personal holding

purpose and increase an NOL carryover,

section 170(f)(9).

companies and service organizations

a contributions carryover is not allowed.

(section 170(e)(4)), and

Corporations reporting taxable income

See section 170(d)(2)(B).

•

Computer technology and equipment

on the accrual method can elect to treat

Cash Contributions. For contributions

for educational purposes (section

as paid during the tax year any

of cash, check, or other monetary gifts

170(e)(6)).

contributions paid by the 15th day of the

(regardless of the amount), the

3rd month after the end of the tax year if

For more information on charitable

corporation must maintain a bank record,

the contributions were authorized by the

contributions, including substantiation and

or a receipt, letter, or other written

board of directors during the tax year.

recordkeeping requirements, see section

communication from the donee

Attach a declaration to the return stating

170 and the related regulations and Pub.

organization indicating the name of the

that the resolution authorizing the

526. For other special rules that apply to

organization, the date of the contribution,

contributions was adopted by the board of

corporations, see Pub. 542.

and the amount of the contribution.

directors during the tax year. The

declaration must include the date the

Contributions of $250 or more.

Line 22. Depreciation. Include on line

resolution was adopted. See Regulations

Generally, no deduction is allowed for any

22 depreciation and the cost of certain

section 1.170A-11.

contribution of $250 or more unless the

property that the corporation elected to

-11-

Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2008 Page 11

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