INSTRUCTIONS: CAPITAL GAINS AND LOSSES (Schedule D)

This form is used to report sales and exchanges of capital assets and gains for distributions to shareholders of appreciated capital assets. For more information on this form, regard the following instructions: http://www.irs.gov/pub/irs-pdf/i1120sd.pdf. Specific instructions for Parts I and II are provided below:

“Capital Gains and Losses (Schedule D) Step 1”

In column (b), an RIC or REITS acquisition date for an asset held on January 1, 2001 is the date of the sale and reacquisition.

“Capital Gains and Losses (Schedule D) Step 2”

In column (c), enter the date the corporation sold the asset. For stock and other property sold short, enter the date you sold the stock or property you borrowed to open the short sale.

“Capital Gains and Losses (Schedule D) Step 3”

In column (d), enter the gross sales price or the net sales price. If you enter the net sales price, do not increase the cost in column (e).

“Capital Gains and Losses (Schedule D) Step 4”

For column (e), see section 1012 an subchapters C, K, O, and P of the Code. The following rules may apply:

· receipt of certain distributions of stock

· liquidation of another corporation

· transfer from shareholder or reorganization

· bequest

· contribution or gift

· involuntary conversion

· certain asset acquisitions

· wash sale or stock

Before entering a figure in column (e), increase the cost by an expenses of sale like broker’s fee, commissions, state and local transfer taxes, or option premiums unless the net price was reported in column (d).

If a corporation is allowed a charitable deduction because it sold property in a bargain sale to a charitable organization, make an adjustment for the gain with the following equation:

(Amount realized / FMV) X adjusted basis

You cannot report a loss for a bargain sale to a charity.

“Capital Gains and Losses (Schedule D) Step 5”

In line 10, enter the total capital gain distributions paid by a REIT or a RIC. Disregard how long the corporation owned the stock in the RIC or REIT. Also, enter the amount received from a RIC or a REIT qualifying as a distribution in complete liquidation as defined under section 332(b).