Instructions For Form 1120-Pc - 2001 (Page 12 of 20) in pdf

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Line 21. Charitable contributions.

Contributions to organizations

Computer technology and equipment

conducting lobbying activities.

Enter contributions or gifts actually paid

for educational purposes.

within the tax year to or for the use of

Contributions made to an organization

Contributions of computer

charitable and governmental

that conducts lobbying activities are not

technology and equipment for

organizations described in section 170(c)

deductible if:

educational purposes. A corporation

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and any unused contributions carried over

The lobbying activities relate to matters

may take an increased deduction under

of direct financial interest to the donor’s

from prior years.

section 170(e)(6) for qualified

trade or business and

Corporations reporting taxable income

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contributions of computer technology or

The principal purpose of the

on the accrual method may elect to treat

equipment for educational purposes.

contribution was to avoid Federal income

as paid during the tax year any

Computer technology or equipment

tax by obtaining a deduction for activities

contributions paid by the 15th day of the

means computer software, computer or

that would have been nondeductible

3rd month after the end of the tax year if

peripheral equipment, and fiber optic

under the lobbying expense rules if

the contributions were authorized by the

cable related to computer use. A

conducted directly by the donor.

board of directors during the tax year.

contribution is a qualified contribution if:

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Attach a declaration to the return, signed

Contribution of property other than

It is made to an eligible donee (see

by an officer, stating that the resolution

cash. If a corporation (other than a

below);

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authorizing the contributions was adopted

closely held corporation) contributes

Substantially all of the donee property’s

by the board of directors during the tax

property other than cash and claims over

use is:

year. Also attach a copy of the resolution.

a $500 deduction for the property, it must

1. Related to the purpose or function

attach a schedule to the return describing

of the donee;

Limitation on deduction. The total

the kind of property contributed and the

2. For use within the United States;

amount claimed may not be more than

method used to determine its fair market

and

10% of taxable income (line 37, Schedule

value (FMV). Closely-held corporations

3. For educational purposes.

A) computed without regard to:

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generally must complete Form 8283 and

The contribution is made not later than

Any deduction for contributions,

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attach it to their returns. All other

3 years after the date the taxpayer

The deduction for dividends received,

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corporations generally must complete and

acquired or substantially completed the

Any net operating loss (NOL) carryback

attach Form 8283 to their returns for

construction of the property;

to the tax year under section 172, and

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contributions of property (other than

The original use of the property is by

Any capital loss carryback to the tax

money) if the total claimed deduction for

the donor or the donee;

year under section 1212(a)(1).

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all property contributed was more than

The property is not transferred by the

Carryover. Charitable contributions

$5,000.

donee for money, services, or other

over the 10% limitation may not be

property, except for shipping, transfer,

If the corporation made a “qualified

deducted in the tax year but may be

and installation costs;

conservation contribution” under section

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carried over to the next 5 tax years.

The property fits productively into the

170(h), also include the FMV of the

Special rules apply if the corporation

donee’s education plan; and

underlying property before and after the

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has an NOL carryover to the tax year. In

The property meets standards, if any,

donation, as well as the type of legal

figuring the charitable contributions

that may be prescribed by future

interest contributed, and describe the

deduction for the tax year, the 10% limit is

regulations, to assure it meets minimum

conservation purpose benefited by the

applied using taxable income after taking

functionality and suitability for educational

donation. If a contribution carryover is

into account any deduction for the NOL.

purposes.

included, show the amount and how it

was determined.

Eligible donee. The term “eligible

To figure the amount of any remaining

NOL carryover to later years, taxable

donee” means:

Reduced deduction for

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income must be modified (see section

An educational organization that

contributions of certain property. For a

172(b)). To the extent that contributions

normally maintains a regular faculty and

charitable contribution of property, the

curriculum and has a regularly enrolled

are used to reduce taxable income for this

corporation must reduce the contribution

purpose and increase an NOL carryover,

body of pupils in attendance at the place

by the sum of:

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a contributions carryover is not allowed.

where its educational activities are

The ordinary income and short-term

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

regularly conducted,

capital gain that would have resulted if the

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A section 501(c)(3) entity organized

property had been sold at its FMV and

Substantiation requirements.

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primarily for purposes of supporting

For certain contributions, the long-term

Generally, no deduction is allowed for any

elementary and secondary education, or

contribution of $250 or more unless the

capital gain that would have resulted if the

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A public library (as described in section

property had been sold at its FMV.

corporation obtains a written

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

The reduction for long-term capital

acknowledgment from the donee

gain applies to:

organization that shows the amount of

Exceptions. The following exceptions

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Contributions of tangible personal

cash contributed, describes any property

apply to the above rules for computer

contributed, and either gives a description

property for use by an exempt

technology and equipment:

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organization for a purpose or function

and a good faith estimate of the value of

Contributions to private foundations

unrelated to the basis for its exemption

any goods or services provided in return

may qualify if the foundation contributes

and

for the contribution or states that no

the property to an eligible donee within 30

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goods or services were provided in return

Contributions of any property to or for

days after the contribution and notifies the

for the contribution. The acknowledgment

the use of certain private foundations

donor of the contribution. For more

except for stock for which market

must be obtained by the due date

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

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quotations are readily available (section

(including extensions) of the corporation’s

For contributions of property reacquired

170(e)(5)).

return, or if earlier, the date the return is

by the manufacturer of the property, the 3

filed. Do not attach the acknowledgment

year period begins on the date that the

Larger deduction. A larger deduction

to the tax return, but keep it with the

original construction of the property was

is allowed for certain contributions of:

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corporation’s records. These rules apply

substantially completed. Also, the original

Inventory and other property to certain

in addition to the filing requirements for

use of the property may be by someone

organizations for use in the care of the ill,

Form 8283, Noncash Charitable

other than the donor or donee.

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

Contributions described below.

and Regulations section 1.170A-4A);

Line 22. Depreciation. Besides

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For more information on substantiation

Scientific equipment used for research

depreciation, include on line 22 the part of

and recordkeeping requirements, see the

to institutions of higher learning or to

the cost that the corporation elected to

regulations under section 170 and Pub.

certain scientific research organizations

expense under section 179 for certain

526, Charitable Contributions.

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

tangible property placed in service during

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Instructions For Form 1120-Pc - 2001 Page 12

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