Instructions For Form 1120-Pc - 2006 (Page 11 of 20) in pdf

board of directors during the tax year.

than cash and claims over a $500

inventory to public schools (section

Attach a declaration to the return stating

deduction for the property, it must attach

170(e)(3)(D)), and

•

that the resolution authorizing the

a schedule to the return describing the

Scientific equipment used for research

contributions was adopted by the board of

kind of property contributed and the

to institutions of higher learning or to

directors during the tax year. The

method used to determine its fair market

certain scientific research organizations

declaration must include the date the

value (FMV). Closely held corporations

(other than by personal holding

resolution was adopted. See Regulations

and personal service corporations must

companies and service organizations

section 1.170A-11.

complete Form 8283, Noncash Charitable

(section 170(e)(4)).

•

Contributions, and attach it to their

Computer technology and equipment

Limitation on deduction. The total

returns. All other corporations generally

for educational purposes (section

amount claimed cannot be more than

must complete and attach Form 8283 to

170(e)(6)).

10% of taxable income (line 37, Schedule

their returns for contributions of property

A) computed without regard to the

For more information on charitable

(other than money) if the total claimed

following.

contributions, including substantiation and

•

deduction for all property contributed was

Any deduction for contributions.

recordkeeping requirements, see section

•

more than $5,000. Special rules apply to

The deduction for dividends received.

170 and the related regulations and Pub.

•

the contribution of certain property. See

The domestic production activities

526, Charitable Contributions. For other

the Instructions for Form 8283.

deduction under section 199.

special rules that apply to corporations,

•

Any net operating loss (NOL) carryback

Special rules for contributions of

see Pub. 542.

to the tax year under section 172.

certain easements in registered

Line 22. Depreciation. Include on line

•

Any capital loss carryback to the tax

historic districts. The following rules

22 depreciation and the cost of certain

year under section 1212(a)(1).

apply to certain contributions of real

property that the corporation elected to

property interests located in a registered

Carryover. Charitable contributions

expense under section 179. See Form

historic district.

over the 10% limitation cannot be

4562 and its instructions.

•

For contributions made after July 25,

deducted for the tax year but can be

Line 23. Depletion. See sections 613

2006, a deduction is allowed for the

carried over to the next 5 tax years.

and 613A for percentage depletion rates

qualified real property interest, if the

Special rules apply if the corporation

applicable to natural deposits. Also, see

exterior of the building (including the front,

has an NOL carryover to the tax year. In

section 291 for the limitation on the

side, rear, and space above the building)

figuring the charitable contributions

depletion deduction for iron ore and coal

is preserved and no portion of the exterior

deduction for the current tax year, the

(including lignite).

is changed in a manner that is

10% limit is applied using taxable income

inconsistent with its historical character.

Attach Form T (Timber), Forest

after taking into account any deduction for

For more details, see section

Activities Schedule, if a deduction for

the NOL.

170(h)(4)(B).

depletion of timber is taken.

•

To figure the amount of any remaining

For contributions made after August 17,

Foreign intangible drilling costs and

NOL carryover to later years, taxable

2006, a deduction is allowed for the

foreign exploration and development

income must be modified (see section

building only (no deduction is allowed for

costs must either be added to the

172(b)). To the extent that contributions

a structure or land) if located in a

corporation’s basis for cost depletion

are used to reduce taxable income for this

registered historic district. However, if

purposes or be deducted ratably over a

purpose and increase an NOL carryover,

listed in the National Register, a

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

a contributions carryover is not allowed.

deduction is also allowed for structures or

and 617 for details.

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

land areas. For more information, see

See Pub. 535 for more information on

Substantiation requirements.

section 170(h)(4)(C).

•

depletion.

For contributions made in tax years

Generally, no deduction is allowed for any

beginning after August 17, 2006, the

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

contribution of $250 or more unless the

corporation must also include the

plans. Enter the deduction for

corporation gets a written

following information with the tax return.

contributions to qualified pension,

acknowledgment from the donee

profit-sharing, or other funded deferred

organization that shows the amount of

1. A qualified appraisal (as defined in

compensation plans. Employers who

cash contributed, describes any property

section 170(f)(11)(E)) of the qualified

maintain such a plan generally must file

contributed, and, either gives a

property interest,

one of the forms listed below, even if the

description and a good faith estimate of

2. Photographs of the entire exterior

plan is not a qualified plan under the

the value of any goods or services

of the building, and

Internal Revenue Code. The filing

provided in return for the contribution or

3. A description of all restrictions on

requirement applies even if the

states that no goods or services were

the development of the building. See

corporation does not claim a deduction for

provided in return for the contribution. The

section 170(h)(4)(B)(iii).

•

the current tax year. There are penalties

acknowledgment must be obtained by the

The corporation’s deduction may be

for failure to file these forms on time and

due date (including extensions) of the

reduced if rehabilitation credits were

for overstating the pension plan

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

claimed on the building. See section

deduction. See sections 6652(e) and

the return is filed. Do not attach the

170(f)(14).

•

6662(f).

acknowledgment to the tax return, but

A $500 filing fee may apply to certain

keep it with the corporation’s records.

deductions over $10,000. See section

Form 5500, Annual Return/Report of

170(f)(13).

Employee Benefit Plan. File this form for

Note. For contributions of cash,

a plan that is not a one-participant plan

check, or other monetary gifts (regardless

Other special rules. The corporation

(see below).

of the amount), made in tax years

must reduce its deduction for

beginning after August 17, 2006, the

contributions of certain capital gain

Form 5500-EZ, Annual Return of

corporation must maintain a bank record,

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

One-Participant (Owners and Their

or a receipt, letter, or other written

170(e)(5).

Spouses) Retirement Plan. File this form

communication from the donee

for a plan that only covers the owner (or

A larger deduction is allowed for

organization indicating the name of the

the owner and his or her spouse) but only

certain contributions of:

•

organization, the date of the contribution,

if the owner (or the owner and his or her

Inventory and other property to certain

and the amount of the contribution.

spouse) owns the entire business.

organizations for use in the care of the ill,

Contributions of property other than

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

Line 25. Employee benefit programs.

cash. If a corporation (other than a

including contributions of “apparently

Enter contributions to employee benefit

closely held or personal service

wholesome food” (section 170(e)(3)(C))

programs not claimed elsewhere on the

corporation) contributes property other

and contributions of qualified book

return (for example, insurance, health and

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Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2006 Page 11

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