Schedule F (IL-1040), titled “Gains from Sales or Exchanges of Property Acquired Before August 1, 1969,” is a required attachment to your Illinois Form IL-1040 if you sold or exchanged property you owned before that date. It’s used to calculate the August 1, 1969 Valuation Limitation Amount, a specific Illinois-only adjustment that reduces taxable gains on older property. The Illinois Department of Revenue allows this special treatment because the state adopted its income tax system after that date, and therefore, gains on older property are limited to post-1969 appreciation.
When you file this schedule, you’ll also need to attach copies of your federal Schedule D, and, if applicable, Forms 4797, 6252, or 8949. These federal forms show your capital gains, business property sales, and installment sale details that Illinois references in its own calculations.
How To File Schedule F (IL-1040)
- Attach Schedule F to your Illinois Form IL-1040.
- Include copies of your federal Schedule D and any required federal Forms 4797, 6252, and 8949.
- Use this form if you reported any gains on property acquired before August 1, 1969.
- If you had installment sales, follow the special instructions on the back of the form (explained later in this article).
- Transfer totals from this form to Schedule M, Line 23 (Other Additions and Subtractions for Individuals).
How To Complete Schedule F (IL-1040)
Step 1: Provide The Following Information
- Your Name: As shown on your Form IL-1040.
- Your Social Security Number: Enter it exactly as on IL-1040.
- Tax Year Ending: Fill in the month, day, and year of your tax year end.
Step 2: August 1, 1969 Valuation Limitation Amounts for Capital (Non-Depreciable) Assets
This section applies to capital assets (like land or investments) not used in trade or business.
Each row (a–e) represents one property. Columns A–H must be completed carefully.
Line 1 (Rows a–e)
| Column | Description |
|---|---|
| A | Description of Property – Describe each property sold. If not a listed security, see detailed instructions. |
| B | Date Acquired (mo./yr.) – Enter month and year you acquired the property. |
| C | Date Sold (mo./yr.) – Enter month and year sold. |
| D | Federal Gain in Taxable Year (or applicable fraction) – The total gain from this sale reported on your federal return. |
| E | August 1, 1969 Value (or applicable fraction) – The value as of August 1, 1969. |
| F | Federal Tax Basis on August 1, 1969 minus Column E fraction in E times D) – Enter your federal tax basis on August 1, 1969. |
| G | Column E minus Column F (or fraction in E times D) – This column calculates the difference or proportional value. |
| H | Smaller of Column D or Column G – Enter the smaller number between the two. |
Line 2
Enter your share of August 1, 1969 valuation limitation amounts received from partnerships, S corporations, trusts, or estates. See specific entity instructions.
Line 3
Enter the amount from Form IL-4644, Line 18, if required.
Line 4
Add Lines 1 through 3. Enter the total here and again on Line 9 below.
Step 3: August 1, 1969 Valuation Limitation Amounts for Property Used in Trade or Business
For business or rental property (depreciable), use Step 3. Each row (a–e) covers one property.
Line 5 (Rows a–e)
| Column | Description |
|---|---|
| A | Description of Property – Identify the business property. |
| B | Date Acquired (mo./yr.) |
| C | Date Sold (mo./yr.) |
| D | Federal Gain in Taxable Year |
| D1 | Section 1245 & 1250 Gain – Enter gain amounts subject to these sections (depreciation recapture). |
| D2 | Section 1231 Gain – For gains reported under this section. |
| E | August 1, 1969 Value (or applicable fraction) |
| F | Federal Tax Basis on August 1, 1969 |
| G | Column E minus Column F (or fraction in E times D) |
| H | Smaller of Column D1 or (Column G minus H) or Column D2 – Used for recaptured or business property gains. |
| I | Smaller of Column G minus H or Column D2 – Fill out only if federal Schedule D Line 11 shows a gain. |
Line 6
Enter your share of August 1, 1969 valuation limitation amounts from partnerships, S corporations, trusts, or estates.
Line 7
Add Column H, Lines 5 and 6. Enter here and on Line 16 below.
Line 8
Add Column I, Lines 5 and 6. Enter here and on Line 10 below.
Only enter on Line 10 if your federal Schedule D, Line 11 shows a gain.
Step 4: August 1, 1969 Valuation Limitation Amount (Final Computation)
This section brings together your totals from above to determine your Illinois adjustment.
| Line | Instruction |
|---|---|
| 9 | Enter the amount from Line 4. |
| 10 | Enter the amount from Line 8. |
| 11 | Add Lines 9 and 10. |
| 12 | Enter net capital gain (if any) from your federal Schedule D, Line 16. Otherwise, enter zero. |
| 13 | Enter the amount from Form IL-4644, Line 13, if required. |
| 14 | Subtract Line 13 from Line 12. If equal or greater, enter zero. |
| 15 | Enter the smaller of Line 11 or Line 14. |
| 16 | Enter the amount from Line 7. |
| 17 | Add Lines 15 and 16. This is your August 1, 1969 Valuation Limitation Amount. |
| Transfer this total to Schedule M, Line 23. |
Attach Schedule F to your IL-1040.
Special Instructions For Installment Sales (Page 2)
If you reported an installment sale of property acquired before August 1, 1969, follow these special rules:
Installment Sales Before August 1, 1969
- Step 2, Line 1:
- Columns A–C – Same as Step 2.
- Column D – Enter “INST.”
- Columns E–G – Leave blank.
- Column H – Enter the gain reported this year on your federal Schedule D or Form 8949.
- Step 3, Line 5:
- Columns A–C – Same.
- Column D – Enter “INST.”
- Columns D1–G – Leave blank.
- Column H – Enter Section 1245 or 1250 gain reported this year.
- Column I – Enter Section 1231 gain reported this year.
- Step 4 (Lines 9–17): Follow normal instructions.
Installment Sales On or After August 1, 1969
- Step 2, Line 1:
Columns A–F – Follow normal instructions.
Column G – Complete the Column G Worksheet (explained below).
Column H – Same as normal instructions. - Step 3, Line 5:
Columns A–F – Normal.
Column G – Complete the worksheet.
Columns H & I – Same as normal. - Step 4: Lines 9–17 – Normal instructions.
Column G Worksheet (For Installment Sales After July 31, 1969)
| Column | Entry |
|---|---|
| 1 | Total federal gain realized on sale (entire gain, not just this year’s). |
| 2 | Fraction, if any, from Schedule F, Column E. |
| 3 | Multiply Column 1 by Column 2. If no fraction, subtract Column F from Column E on Schedule F. |
| 4 | Total gain reported on federal returns in prior years. |
| 5 | Subtract Column 4 from Column 3. Enter this in Schedule F, Column G. If negative, enter zero. |
Use this worksheet for each installment sale and attach it if needed.
Final Steps
- Attach Schedule F to your Form IL-1040.
- Attach federal supporting forms (Schedule D, Forms 4797, 6252, 8949).
- Transfer final totals to Schedule M, Line 23.
- Keep a copy for your records in case the Illinois Department of Revenue requests clarification.