The sale or exchange of any capital asset that’s not reported on another form or scheduleGains from involuntary conversions of capital assets not used in your trade or business, not including casualty or theftNon-business bad debtsWorthlessness of a securityThe election to defer a capital gain invested in a qualified opportunity fund (QOF)The disposition of interests in an QOF
Corporations, partnerships, estates, and trusts would use Form 8949 for many of the same reasons. Complete as many copies of Form 8949 as necessary to include all transactions made by both you and your spouse if you’re married and filing a joint tax return. You can enter the transactions on separate forms according to which of you completed the transaction, or combine them into one form. In any case, you must enter the total from all of your and your spouse’s 8949 forms on your Schedule D.
An Example of Using Form 8949
Say you bought and sold several investments during they year through one broker. The broker sends you a 1099-B with data that doesn’t match up with your records. You want to file your numbers on your 1040, so you use Form 8949 to document the differences between what’s on the 1099-B you received and what you reported on your return.
Who Uses IRS Form 8949?
Anyone who has received one or more Form 1099-B, Form 1099-S, and IRS-allowed substitutes for those forms should file Form 8949. Look carefully at the 1099 forms you’ve received from your broker. You may not need to file Form 8949 if the cost or other basis for all of your transactions was reported to the IRS and if you don’t need to make any adjustments. Your 1099 forms should give you information on whether you should check Box A, B, or C (Part I) for short-term transactions, or Box D, E, or F (Part II) for long-term transactions, all for a given transaction or set of transactions. However, you’ll have to determine from your own records whether the transaction was short-term or long-term if Box 2 of Form 1099 is left blank, and if code X is in the “Applicable checkbox on Form 8949” box. Short-term transactions are generally those that involve assets you held for a year or less. Long-term transactions are generally those that involve assets you held for more than a year. But there are exceptions to this general rule. It’s always considered to be a long-term transaction if you sell a property that you’ve inherited or were given as a gift, even if you owned it for a year or less. To calculate how long you held an asset, count from the day after you got it to when you sold it or gave it to someone.
Where To Get a Form 8949
The IRS provides an interactive Form 8949 on its website. You can complete it online and print it out. The form should also be available from any tax preparation software you use.
How To Fill Out and Read Form 8949
Check Box A, B, or C in Part I, depending on which reporting option applies. Enter information on all of your short-term transactions under Line 1 (sales and exchanges) of capital assets, including stocks, bonds, and real estate that fit that reporting category. Your description for each property in Column “a” on Form 8949 should be based on the description given on the applicable Form 1099-B or Form 1099-S (if you received one). Column “d” is for proceeds, “e” is for cost or other basis, “g” is for the amount of the adjustment, and “h” is for gain or loss. The gain or loss for each transaction is calculated by subtracting the cost or other basis from the proceeds, then adding or subtracting any adjustment if applicable. Examples of adjustments you might be required to make include increasing the basis of a property you sold by the value of any improvements you made to it, and adjusting for any stock splits that occurred before you sold shares of a company. Publication 551 provides detailed information on various increases and decreases to basis. Enter the totals of the figures in columns (d), (e), (g), and (h) on Line 2. Enter these same amounts on Schedule D. You’ll enter the amounts on Line 1b of Schedule D if you checked Box A. You’ll enter the amounts on Line 2 if you checked Box B. Enter the amounts on Line 3 if you checked Box C. Follow the same steps in Part II for all your long-term transactions that fall under one of the reporting categories. Check Box D, E, or F, and enter the information for all of the transactions. Add up the same columns and enter the totals on Line 2, as well as on Schedule D. Enter the amounts on Line 8b of Schedule D if you checked Box D. Enter the amounts on Line 9 if you checked Box E. Enter the amounts on Line 10 if you checked Box F.
Using Schedule D
In addition to the total gain or loss from transactions reported on your Form(s) 8949, you might have to use Schedule D to report certain transactions you don’t have to report on Form 8949.
Can Form 8949 Be E-Filed?
You must enter each transaction in separate rows of the electronic form if you want to e-file your Form 8949, or you can include Form 8949 as a PDF attachment to your return. You can also mail paper copies of both Form 8949 and Form 8453 for an IRS e-filed return.
Where To Mail Form 8949
You can mail Form 8949 along with Schedule D and your Form 1040 or Form 1040-SR to the appropriate address. Where you mail your return is based on where you live. You can find the proper address on the IRS’ website.
