What Is Schedule D?

Schedule D is one of many schedules provided by the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS) and filed with the U.S. Individual Income Tax Return 澳洲幸运5官方开奖结果体彩网:Form 1040. Schedule D is required when reporting any gains𒉰 or lo🐠sses realized from the sale of capital assets.

Capital assets include property owned for personal purposes or investment. The capital assets commonly reported on Schedule D include stocks, bonds, and homes.

Capital Gains and Losses

Investments or assets that are sold must be recorded for tax purposes. Capital gains or losses are categorized as 澳洲幸运5官方开奖结果体彩网:short-term, held less than 12 months from the purchase date, or 澳洲幸运5官方开奖结果体彩网:long-term, held 12 months or more from the purchase date.

Long-term capital gains tax is often more favorable depending on one’s income tax bracket than short-term gains taxed according to ordinary income tax brackets.

Who Files Schedule D?

As taxpayers collect information about the current year’s 澳洲幸运5官方开奖结果体彩网:capital asset sales and prior year’s 澳洲幸运5官方开奖结果体彩网:capital loss carryforwards, thoseಌ with reportable information 𝕴use Schedule D. The instructions for completing Schedule D advise tax filers to prepare and bring over information from the following tax forms:

• 澳洲幸运5官方开奖结果体彩网:Form 8949 for taxpayers who sell investments or their home
• 澳洲幸运5官方开奖结果体彩网:Form 4797 for taxpayers who sell a business property
• 澳洲幸运5官方开奖结果体彩网:Form 6252 for taxpayers who have installment sale income
• 澳洲幸运5官方开奖结果体彩网:Form 4684 for taxpayers who have a casualty or theft loss
• 澳洲幸运5官方开奖结果体彩网:Form 8824 for taxpayers who made a like-kind exchange

Ultimately, the capital gain or loss on Schedule D is combined with other income and loss to compute the total tax on Form 1040. Schedule D and Form 8949 are submitted with Form 1040 when taxpayers file their federal tax returns.

How to Complete Schedule D

The com🧸plete Schedule D form can be found on the IRS . Taxpayers can complete Schedule D following the instructions or may opt to use a personal accountant or e-file tax service provided by a thir♑d-party company.

All pages of Schedule D are available .

Schedule D Example

An individual sold shares of a stock and received a 澳洲幸运5官方开奖结果体彩网:Form 1099-B from their broker or financial institution that reports a $4 net short-term capital gain and a net $8 long-term capital gain from the following sales: 

• The stock was acquired on 1/1/23 for $4 and sold on 4/27/23 for $6, resulting in a short-term capital gain of $2.
• The stock was acquired on 1/1/23 for $3 and sold on 4/28/23 for $7, resulting in a short-term capital gain of $4.
• The stock was acquired on 1/1/23 for $9 and sold on 4/29/23 for $8, resulting in a short-term capital loss of $1.
• The stock was acquired on 1/1/23 for $9 and sold on 4/30/23 for $8, resulting in a short-term capital loss of $1.
• The stock was acquired on 1/1/17 for $1 and sold on 12/31/23 for $9, resulting in a long-term capital gain of $8.
• The stock was acquired on 1/2/17 for $1 and sold on 12/30/23 for $3, resulting in a long-term capital gain of $2.
• The stock was acquired on 1/3/17 for $4 and sold on 4/29/23 for $3, resulting in a long-term capital loss of $1.
• The stock was acquired on 1/4/17 for $4 and sold on 4/30/23 for $3, resulting in a long-term capital loss of $1.

These stock sales are sales of capital assets that must be reported on Schedule D. Schedule D instructs individuals to first complete Form 8949. Sales of stock that was owned for less than a year are sales of short-term capital assets reported on Part I of Form 8949, and sales of stock held for more than a year are sales of long-term capital assets reported on Part II of Form 8949.

A tally of gains and losses gives a total Part I, net short-term capital gain of $4 to transfer to Part I of Schedule D. The total Part II, net long-term capital gain of $8 will transfer to Part II of Schedule D. Schedule D, Part III uses this information to compute the net allowable capital gain or loss, which is a $12 total capital gain.

The Bottom Line

Schedule D is a tax form filed with IRS Form 1040 that reports the gains or losses realized from the sale of capital assets. Capital assets may include personal property such as a home, collectibles, or stocks and bonds. All gains earned or losses will be considered short-term or long-term depending on how long the asset was held. The instructions and Form Schedule D are found on the IRS website.