When you sell stock, crypto or another capital asset, the IRS wants to know what you paid, what you sold it for and how long you held it. Form 8949 is where each sale is listed. Schedule D then adds those sales up. Here is how the two fit together.
What each form does
- Form 8949 lists every sale one by one: what it was, when you bought it, when you sold it, the proceeds, the cost and the gain or loss.
- Schedule D adds up the totals from Form 8949 and works out your overall capital gain or loss for the year.
- The result from Schedule D carries to your Form 1040.
Short-term versus long-term
Part I of Form 8949 is for short-term sales, assets held one year or less. Part II is for long-term sales, assets held for more than a year. The split matters because the two are taxed differently, so check the holding period for each sale carefully.
Which box to check
Each part has boxes that depend on how the sale was reported to you. In broad terms, one box is for sales where your Form 1099-B shows the cost basis was reported to the IRS, another is for sales where it was not reported, and another is for sales with no Form 1099-B at all. You use a separate Form 8949 page for each box. The instructions list the exact boxes, so match them to your statements.
What the columns ask for
- A description of the property, such as the number of shares and the company.
- The date you acquired it and the date you sold it.
- Proceeds (what you received) and cost or other basis (what you paid).
- Adjustments, with a code, if your basis needs correcting, for example for a wash sale.
- The gain or loss, which is proceeds minus basis plus or minus any adjustment.
When you may not need to list every sale
The instructions allow some sales, such as those where the broker reported the basis and no adjustments are needed, to be totalled directly on Schedule D instead of listed line by line. Read the current instructions to see whether that applies to you before you skip Form 8949.
Common mistakes
- Checking the wrong box, so the sale lands on the wrong page.
- Using the wrong holding period, which changes whether a sale is short-term or long-term.
- Leaving out an adjustment for a wash sale or a basis your broker did not report.
- Not matching the proceeds on Form 8949 to the 1099-B totals.
Form 8949 has room for many rows, so brokers and tax software usually produce it. If you have only a few sales, filling it in by hand is practical.
Fill it in without uploading it
Form 8949 opens in DocZap with its fields ready to type into, and what you enter stays in your browser, so nothing is uploaded. Use the Text tool for anything that is not a field, and add extra copies of the page if you have more sales than fit. Download your copy when you are done.
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