2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
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le gain. In column (a) of line 8, enter the • The replacement property must qual- include on Schedule D. The exclusion apname<br />
of the corporation whose stock was ify as an empowerment zone asset with re- plies to an interest in, or property of, certain<br />
sold. In column (f), enter the amount of spect to the same empowerment zone as the businesses operating in the District of Coyour<br />
allowable exclusion as a loss. If you asset sold. lumbia.<br />
are completing line 18 of Schedule D, enter • You must reduce the basis of the re- DC Zone asset. A DC Zone asset is any of<br />
as a positive number the amount of your placement property by the amount of post- the following.<br />
allowable exclusion on line 2 of the 28% poned gain.<br />
Rate Gain Worksheet on page D-7.<br />
• DC Zone business stock.<br />
• This election does not apply to any • DC Zone partnership interest.<br />
Alternative minimum tax. You must enter gain (a) treated as ordinary income or (b)<br />
attributable to real property, or an intangi- • DC Zone business property.<br />
7% of your allowable exclusion <strong>for</strong> the year<br />
on line 12 of <strong>Form</strong> 6251.<br />
ble asset, which is not an integral part of an Qualified capital gain. Qualified capital<br />
enterprise zone business.<br />
gain is any gain recognized on the sale or<br />
Rollover of Gain From QSB • The District of Columbia enterprise exchange of a DC Zone asset that is a capi-<br />
Stock<br />
zone is not treated as an empowerment tal asset or property used in a trade or busi-<br />
zone <strong>for</strong> this purpose.<br />
ness. It does not include any of the<br />
If you sold QSB stock (defined on page • The election is irrevocable without following gains.<br />
D-4) that you held <strong>for</strong> more than 6 months,<br />
IRS consent.<br />
• Gain treated as ordinary income under<br />
you may elect to postpone gain if you<br />
See Pub. 954 <strong>for</strong> the definition of empurchase<br />
other QSB stock during the<br />
section 1245.<br />
60-day period that began on the date of the powerment zone and enterprise zone busi- • Section 1250 gain figured as if section<br />
sale. A pass-through entity also may make ness. You can find out if your business is 1250 applied to all depreciation rather than<br />
the election to postpone gain. The benefit located within an empowerment zone by the additional depreciation.<br />
of the postponed gain applies to your share using the RC/EZ/EC Address Locator at • Gain attributable to real property, or<br />
of the entity’s postponed gain if you held an www.hud.gov/crlocator.<br />
an intangible asset, that is not an integral<br />
interest in the entity <strong>for</strong> the entire period the Qualified empowerment zone assets part of a DC Zone business.<br />
entity held the QSB stock. If a pass-through are:<br />
• Gain from a related-party transaction.<br />
entity sold QSB stock held <strong>for</strong> more than 6<br />
See Sales and Exchanges Between Related<br />
months and you held an interest in the en- 1. Tangible property, if:<br />
Persons in chapter 2 of Pub. 544.<br />
tity <strong>for</strong> the entire period the entity held the a. You acquired the property after Destock,<br />
you also may elect to postpone gain<br />
See Pub. 954 and section 1400B <strong>for</strong><br />
cember 21, 2000,<br />
if you, rather than the pass-through entity,<br />
more details on DC Zone assets and special<br />
purchase the replacement QSB stock<br />
b. The original use of the property in the rules.<br />
within the 60-day period.<br />
empowerment zone began with you, and<br />
How to report. Report the entire gain real-<br />
c. Substantially all of the use of the ized from the sale or exchange as you oth-<br />
You must recognize gain to the extent property, during substantially all of the erwise would without regard to the<br />
the sale proceeds exceed the cost of the re- time that you held it, was in your enterprise exclusion. On Schedule D, line 8, enter<br />
placement stock. Reduce the basis of the zone business; and “DC Zone Asset” in column (a) and enter<br />
replacement stock by any postponed gain. 2. Stock in a domestic corporation or a as a loss in column (f) the amount of the<br />
You must make the election no later capital or profits interest in a domestic part- allowable exclusion. If you are reporting<br />
than the due date (including extensions) <strong>for</strong> nership, if:<br />
the sale directly on Schedule D, line 8, use<br />
filing your tax return <strong>for</strong> the tax year in<br />
the line directly below the line on which<br />
a. You acquired the stock or partnership<br />
which the QSB stock was sold. If your orig-<br />
you are reporting the sale.<br />
interest after December 21, 2000, solely in<br />
inal return was filed on time, you may exchange <strong>for</strong> cash, from the corporation at<br />
make the election on an amended return its original issue (directly or through an unfiled<br />
no later than 6 months after the due derwriter) or from the partnership; Specific <strong>Instructions</strong><br />
date of your return (excluding extensions).<br />
b. The business was an enterprise zone<br />
Write “Filed pursuant to section<br />
business (or a new business being organ- Lines 1 and 8<br />
301.9100-2” at the top of the amended reized<br />
as an enterprise zone business) as of<br />
turn.<br />
Enter all sales and exchanges of capital as-<br />
the time you acquired the stock or partner- sets, including stocks, bonds, etc., and real<br />
To make the election, report the entire ship interest; and<br />
estate (if not reported on <strong>Form</strong> 4684, 4797,<br />
gain realized on the sale on line 1 or 8. Di- c. The business qualified as an enterrectly<br />
below the line on which you reported prise zone business during substantially all sale or exchange of your main home unless<br />
6252, 6781, or 8824). But do not report the<br />
the gain, enter in column (a) “Section 1045 of the time during which you held the stock required (see page D-2). Include these<br />
rollover,” and enter the amount of the post- or partnership interest.<br />
transactions even if you did not receive a<br />
poned gain as a (loss) in column (f).<br />
<strong>Form</strong> 1099-B or 1099-S (or substitute statement)<br />
<strong>for</strong> the transaction. You can use<br />
How to report. Report the entire gain realstock<br />
ticker symbols or abbreviations to de-<br />
Rollover of Gain From<br />
ized from the sale as you otherwise would<br />
Empowerment Zone Assets without regard to the election. On Schedule scribe the property as long as they are based<br />
D, line 8, enter “Section 1397B Rollover” on the descriptions of the property as<br />
If you sold a qualified empowerment zone in column (a) and enter as a loss in column shown on <strong>Form</strong> 1099-B or 1099-S (or sub-<br />
asset that you held <strong>for</strong> more than 1 year, (f) the amount of gain included on Schedyou<br />
may be able to elect to postpone part or ule D that you are electing to postpone. If<br />
stitute statement).<br />
all of the gain that you would otherwise in- Use Schedule D-1 to list additional<br />
you are reporting the sale directly on<br />
clude on Schedule D. If you make the elec- transactions <strong>for</strong> lines 1 and 8. Use as many<br />
Schedule D, line 8, use the line directly betion,<br />
the gain on the sale generally is Schedules D-1 as you need. Enter on<br />
low the line on which you are reporting the<br />
recognized only to the extent, if any, that Schedule D, lines 2 and 9, the combined<br />
sale.<br />
the amount realized on the sale exceeds the<br />
totals from all your Schedules D-1.<br />
cost of qualified empowerment zone assets See section 1397B <strong>for</strong> more details.<br />
Add the following amounts re-<br />
(replacement property) you purchased dur-<br />
Exclusion of Gain From DC<br />
ported to you <strong>for</strong> <strong>2004</strong> on<br />
ing the 60-day period beginning on the date<br />
<strong>Form</strong>s 1099-B and 1099-S (or<br />
of the sale. The following rules apply. Zone Assets<br />
substitute statements) that you<br />
• No portion of the cost of the replace- If you sold or exchanged a District of Co- are not reporting on another <strong>for</strong>m or schedment<br />
property may be taken into account to lumbia Enterprise Zone (DC Zone) asset ule included with your return: (a) proceeds<br />
the extent the cost is taken into account to that you held <strong>for</strong> more than 5 years, you from transactions involving stocks, bonds,<br />
exclude gain on a different empowerment may be able to exclude the amount of quali- and other securities and (b) gross proceeds<br />
zone asset. fied capital gain that you would otherwise from real estate transactions (other than the<br />
D-5