Ohio Valuation Limitation on Gains and Losses From Sales or Exchanges of Capital Assets on I.R.C. Section 1231 Assets

Valuation Limitation on Gains and Losses From Sales or Exchanges of Capital Assets on I.R.C. Section 1231 Assets
FT 1120VL_Final_2007_GEN_060210.indd
hio

FT 1120VL
Rev. 10/06

Department of
Taxation
Attach this form to the Ohio Corporation Franchise Tax Report, Ohio form FT 1120.

Valuation Limitation on Gains and Losses From Sales
or Exchanges of Capital Assets or IRC Section 1231 Assets
See Ohio Revised Code Section (R.C.) 5733.04(I)(3)

For calendar year
, or other taxable year beginning
,
and ending
The beginning of the taxpayer’s first franchise tax accounting period, which ended after Dec. 20, 1971 was

,

.
,

Ohio franchise tax
ID number:

Corporation name:

.

Tax
Year:

A

B

C

D

E

F

G

Kind of Property

Date Acquired

Date Sold

Fraction

(if necessary, attach description)

(month,
day, year)

(month,
day, year)

Gain
or Loss

Valuation
Limitation

*Allocable
Gain or Loss

*Apportionable
Gain or Loss

Column E less
Column F

Column E less
Column F

OR

H

1. Short-term capital gains and losses (list below)

2. Unused capital loss carryover (attach computation).........................................................................................
3. Net short-term capital gain (or loss) .................................................................................................................
4. Long-term capital gains and losses (list below)

Net long-term capital gain (or loss) ......................................................................................................................
5. Gains and losses from the sale or exchange of property used in a trade or business (list below)

Amounts from reverse side
6. Total valuation limitation. If GAIN, enter here and on Ohio form FT 1120, Schedule B, line 2(b). If LOSS, enter here and on
Ohio form FT 1120, Schedule B, line 1(a) ................................................................................................................................
7. Total allocable gain or loss. Enter here and on Ohio form FT 1120, Schedule C, line 2, column 2. Enter Ohio
..................................................................................................................................................

portion
linefrom
4, column
1 depreciable tangible personal property and real property taxed as
*Gains
andon
losses
the sales of
ordinary (recapture) income or loss for federal income tax purposes are considered capital gains and
capital losses for franchise tax purposes. See Borden, Inc. v Limbach (1990), 49 Ohio St 3d 240.

Caution: For taxable years ending in on or after June 26, 2003, R.C. 5733.051 distinguishes business income from nonbusiness income. Only nonbusiness gains and losses are allocable. Gains
and losses from sales of depreciable tangible personal property and gains and losses from sales of
real property are generally apportionable business income.

Corporation name

FEIN

FT 1120VL
Rev. 10/06
Page 2

Tax Year

Instructions
In accordance with Ohio Revised Code section (R.C.) 5733.04(I)(3) valuation
limitation is the loss or gain resulting from the sale, exchange or other disposition of a capital asset or a section 1231 asset to the extent that such loss or gain
occurred prior to the first taxable year on which the franchise tax is computed on
the corporation’s net income.
The beginning of the first taxable year on which the franchise tax is computed on
the corporation’s net income is the beginning of the taxpayer’s first franchise tax
accounting period which ended after Dec. 20, 1971 (the date of enactment of the
net income basis of the franchise tax). See Clyde Williams Enterprises, Inc. and
Subsidiaries v Limbach, BTA Case No. 85-D-132, May 19, 1986.
Ohio Revised Code Section 5733.04(I)(3)
Add any loss or deduct any gain resulting from the sale, exchange or other disposition of a capital asset or an asset described in Internal Revenue Code section
1231, to the extent that such loss or gain occurred prior to the first taxable year

on which the tax provided for in R.C. 5733.06 is computed on the corporation’s
net income. For purposes of division (I)(3) of this section, the amount of the prior
loss or gain shall be measured by the difference between the original cost or
other basis of the asset and the fair market value as of the beginning of the first
taxable year on which the tax provided for in R.C. 5733.06 is computed on the
corporation’s net income. At the option of the taxpayer, the amount of the prior
loss or gain may be a percentage of the gain or loss, which percentage shall be
determined by multiplying the gain or loss by a fraction, the numerator of which
is the number of months from the acquisition of the asset to the beginning of the
first taxable year on which the fee provided in R.C. 5733.06 is computed on the
corporation’s net income, and the denominator of which is the number of months
from the acquisition of the asset to the sale, exchange or other disposition of
the asset. The adjustments described in this division do not apply to any gain
or loss where the gain or loss is recognized by a qualifying taxpayer, as defined
in R.C. 5733.0510, with respect to a qualifying taxable event, as defined in that
section.

Gains and Losses from the Sale or Exchange of Property used in a Trade or Business (continued)

Total

A

B

C

D

E

F

Kind of Property

Date Acquired

Date Sold

Fraction

(if necessary, attach description)

(month,
day, year)

(month,
day, year)

Gain
or Loss

Valuation
Limitation

G

OR

H

*Allocable
*Apportionable
Gain or Loss
Gain or Loss
Column E less
Column F

Column E less
Column F