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Corporation reporting stock trades

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EagerB

Guest
State: DE

A beginners question:

If a C corporations' primary business is trading securities (stocks and bonds) for its own account, what is the correct way to report gains/losses:
- form 1120 Schedule D - Capital Gains
- form 4797 Sales of Business Property
- through "Gross Receipts or Sales" less "Cost of Goods sold" on form 1120?

Thanks,
Allan
 


abezon

Senior Member
Report gains from sales of capital assets on Form 1120 Schedule D. Special rules apply. See instructions that go with the form.
Report sales/exchanges of non-capital property on Form 4797.
Report involuntary conversions on Form 4684.
Report like-kind exchanges on Form 8824.
 
E

EagerB

Guest
thank you for reply!

So the question narrows down to: whether to treat stocks bought and sold for a trade as capital assets or not. What would be the preferred way for IRS purposes?
 

abezon

Senior Member
Not just preferred, the only way. Stocks are capital assets. Report corporate stock trades on Schedule D. Other income such as commission the corporation charges for making trades would be regular income on the corporate return.
 

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