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Line 17. Taxes and Licenses

Line 19. Charitable

Form 8283, Noncash Charitable

Contributions, discussed below.

Contributions

Enter taxes paid or accrued during the tax

year, except the following.

For more information on charitable

Enter contributions or gifts paid within the

•

Federal income taxes.

contributions, including substantiation and

tax year to or for the use of charitable and

•

recordkeeping requirements, see section

governmental organizations described in

Foreign or U.S. possession income

170, the related regulations, and Pub.

section 170(c), and any unused

taxes if a tax credit is claimed (however,

contributions carried over from prior

526, Charitable Contributions.

see the Instructions for Form 5735 for

years.

special rules for possession income

Contributions of property other than

taxes).

Cooperatives reporting taxable income

cash. If a cooperative contributes

•

Taxes not imposed on the cooperative.

on the accrual method can elect to treat

property other than cash and claims over

•

as paid during the tax year any

Taxes, including state or local sales

a $500 deduction for the property, it must

taxes, that are paid or incurred in

contributions paid by the 15th day of the

attach a schedule to the return describing

3rd month after the end of the tax year if

connection with an acquisition or

the kind of property contributed and the

disposition of property (these taxes are

the contributions were authorized by the

method used to determine its fair market

board of directors during the tax year.

treated as part of the cost of the acquired

value (FMV). Cooperatives generally

Attach a declaration to the return stating

property, or in the case of a disposition,

must complete and attach Form 8283 to

that the resolution authorizing the

as a reduction in the amount realized on

their returns for contributions of property

contributions was adopted by the board of

the disposition).

(other than money) if the total claimed

•

directors during the current tax year. The

deduction for all property contributed was

Taxes assessed against local benefits

declaration must include the date the

more than $5,000.

that increase the value of the property

resolution was adopted.

assessed (such as for paving, etc.).

Contributions after June 3, 2004.

•

Taxes deducted elsewhere on the

Limitation on deduction. The total

For contributions of certain property made

amount claimed may not be more than

return, such as those reflected in cost of

after June 3, 2004, a cooperative must file

10% of taxable income (line 30)

goods sold.

Form 8283 and get a qualified appraisal if

computed without regard to the following:

claiming a deduction of more than $5,000.

•

See section 164(d) for the rule on

Any deduction for contributions;

Do not attach the appraisal to the tax

•

apportionment of taxes on real property

The special deductions on line 29b;

return unless claiming a deduction of

•

between the seller and purchaser.

Any net operating loss (NOL) carryback

more than $500,000 or, for art, a

to the tax year under section 172;

deduction of $20,000 or more. See Form

Line 18. Interest

•

Any capital loss carryback to the tax

8283.

Do not offset interest income against

year under section 1212(a)(1); and

•

Contributions of used vehicles.

interest expense.

The deduction allowed under section

Special rules apply to contributions after

249.

Do not deduct the following:

2004 of used motor vehicles, boats, or

•

Carryover. Charitable contributions

Interest on indebtedness used to

airplanes with a claimed value of more

over the 10% limitation cannot be

purchase or carry exempt interest

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

deducted for the current tax year but may

obligations. For exceptions, see section

Reduced deduction for

be carried over to the next 5 tax years.

265(b).

contributions of certain property. For a

•

Special rules apply if the cooperative

For cash basis taxpayers, prepaid

charitable contribution of property, the

has an NOL carryover to the tax year. In

interest allocable to years following the

cooperative must reduce the contribution

figuring the charitable contributions

current tax year (that is, a cash basis

by the sum of:

deduction for the tax year, the 10% limit is

calendar year taxpayer who in 2004

•

The ordinary income and short-term

applied using the taxable income after

prepaid interest allocable to any period

capital gain that would have resulted if the

taking into account any deduction for the

after 2004 can deduct only the amount

property were sold at its FMV, and

NOL.

allocable to 2004).

•

For certain contributions, the long-term

•

Interest and carrying charges on

To figure the amount of any remaining

capital gain that would have resulted if the

straddles. Generally, these amounts must

NOL carryover to later years, taxable

property were sold at its FMV.

be capitalized. See section 263(g).

income must be modified (see sections

•

The reduction for the long-term capital

172(b)). To the extent that contributions

Interest paid or incurred on any portion

gain applies to:

are used to reduce taxable income for this

of an underpayment of tax that is

•

Contributions of tangible personal

purpose and increase an NOL carryover,

attributable to an understatement arising

property for use by an exempt

a contributions carryover is not allowed.

from an undisclosed listed transaction or

organization for a purpose or function

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

an undisclosed reportable avoidance

unrelated to the basis for its exemption,

transaction (other than a listed

Substantiation requirements.

•

Contributions of any property to or for

transaction) entered into in tax years

Generally, no deduction is allowed for any

the use of certain private foundations

beginning after October 22, 2004.

contribution of $250 or more unless the

except for stock for which market

cooperative gets a written

Special rules apply to:

quotations are readily available (section

acknowledgment from the donee

•

170(e)(5)), and

Interest on which no tax is imposed

organization that shows the amount of

•

Any patent or certain other intellectual

(see section 163(j)).

cash contributed, describes any property

•

property contributed after June 3, 2004.

Forgone interest on certain

contributed, and either gives a description

See section 170(e)(1)(B). However, the

below-market-rate loans (see section

and a good faith estimate of the value of

cooperative can deduct certain qualified

7872).

any goods or services provided in return

•

donee income from this property. See

Original issue discount on certain high

for the contribution or states that no

section 170(m).

yield discount obligations (see section

goods or services were provided in return

163(e) to figure the disqualified portion).

for the contribution. The acknowledgment

Larger deduction. A larger deduction

•

Interest which is allocable to

must be obtained by the due date

is allowed for certain contributions of:

•

unborrowed policy cash values of life

(including extensions) of the cooperative’s

Inventory and other property to certain

insurance, endowment, or annuity

return, or, if earlier, the date the return is

organizations for use in the care of the ill,

contracts issued after June 8, 1997. See

filed. Do not attach the acknowledgment

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

section 264(f). Attach a statement

to the tax return, but keep it with the

and Regulations section 1.170A-4A;

•

showing the computation of the

cooperative’s records. These rules apply

Scientific equipment used for research

deduction.

in addition to the filing requirements for

to institutions of higher learning or to

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Instructions For Form 990-C - Farmers' Cooperative Association Income Tax Return - Internal Revenue Service - 2004 Page 11

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