Specific Instructions

Rounding Off to Whole Dollars

You can round off cents to whole dollars on your Schedule D. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.

If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.

Lines 1a and 8a—Transactions Not Reported on Form 8949

You can report on line 1a (for short-term transactions) or line 8a (for long-term transactions) the aggregate totals from any transactions (except sales of collectibles) for which:

  • You received a Form 1099-B (or substitute statement) that shows basis was reported to the IRS and does not show a nondeductible wash sale loss in box 5, and

  • You do not need to make any adjustments to the basis or type of gain or loss (short term or long term) reported on Form 1099-B (or substitute statement), or to your gain or loss.

See How To Complete Form 8949, Columns (f) and (g), in the Form 8949 instructions for details about possible adjustments to your gain or loss.

If you choose to report these transactions on lines 1a and 8a, do not report them on Form 8949. You do not need to attach a statement to explain the entries on lines 1a and 8a and, if you e-file your return, you do not need to file Form 8453.

Figure gain or loss on each line. Subtract the cost or other basis in column (e) from the proceeds (sales price) in column (d). Enter the gain or loss in column (h). Enter negative amounts in parentheses.

Example 1 – basis reported to the IRS.

You received a Form 1099-B reporting the sale of stock you held for 3 years. It shows proceeds (in box 2a) of $6,000 and cost or other basis (in box 3) of $2,000. Box 6b is checked, meaning that basis was reported to the IRS. You do not need to make any adjustments to the amounts reported on Form 1099-B or enter any codes. This was your only 2013 transaction. Instead of reporting this transaction on Form 8949, you can enter $6,000 on Schedule D, line 8a, column (d), $2,000 in column (e), and $4,000 ($6,000 – $2,000) in column (h).

Example 2 – basis not reported to the IRS.

You received a Form 1099-B showing proceeds (in box 2a) of $6,000 and cost or other basis (in box 3) of $2,000. Box 6b is not checked, meaning that basis was not reported to the IRS. Do not report this transaction on line 1a or line 8a. Instead, report the transaction on Form 8949. Complete all necessary pages of Form 8949 before completing line 1b, 2, 3, 8b, 9, or 10 of Schedule D.

Example 3 – adjustment.

You received a Form 1099-B showing proceeds (in box 2a) of $6,000 and cost or other basis (in box 3) of $2,000. Box 6b is checked, meaning that basis was reported to the IRS. However, the basis shown in box 3 is incorrect. Do not report this transaction on line 1a or line 8a. Instead, report the transaction on Form 8949. See the instructions for Form 8949, columns (f), (g), and (h). Complete all necessary pages of Form 8949 before completing line 1b, 2, 3, 8b, 9, or 10 of Schedule D.

Capital Loss Carryover Worksheet—Lines 6 and 14

Use this worksheet to figure your capital loss carryovers from 2012 to 2013 if your 2012 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2012 Schedule D, line 16, or (b) the amount on your 2012 Form 1040, line 41 (or your 2012 Form 1040NR, line 39, if applicable) is less than zero. Otherwise, you do not have any carryovers.
If you and your spouse once filed a joint return and are filing separate returns for 2013, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss.
If you excluded canceled debt from income in 2013, see Pub. 4681.
1. Enter the amount from your 2012 Form 1040, line 41, or your 2012 Form 1040NR, line 39. If a loss, enclose the amount in parentheses 1.    
2. Enter the loss from your 2012 Schedule D, line 21, as a positive amount 2.    
3. Combine lines 1 and 2. If zero or less, enter -0- 3.    
4. Enter the smaller of line 2 or line 3 4.        
  If line 7 of your 2012 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9.      
5. Enter the loss from your 2012 Schedule D, line 7, as a positive amount 5.    
6. Enter any gain from your 2012 Schedule D, line 15. If a loss, enter -0- 6.        
7. Add lines 4 and 6 7.    
8. Short-term capital loss carryover for 2013. Subtract line 7 from line 5. If zero or less, enter -0-. If more than zero, also enter this amount on Schedule D, line 6 8.    
  If line 15 of your 2012 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13.      
9. Enter the loss from your 2012 Schedule D, line 15, as a positive amount 9.    
10. Enter any gain from your 2012 Schedule D, line 7. If a loss, enter -0- 10.        
11. Subtract line 5 from line 4. If zero or less, enter -0- 11.        
12. Add lines 10 and 11 12.    
13. Long-term capital loss carryover for 2013. Subtract line 12 from line 9. If zero or less, enter -0-. If more than zero, also enter this amount on Schedule D, line 14 13.    
             

Lines 1b, 2, 3, 8b, 9, and 10, Column (h)—Transactions Reported on Form 8949

Figure gain or loss on each line. First, subtract the cost or other basis in column (e) from the proceeds (sales price) in column (d). Then combine the result with any adjustments in column (g). Enter the gain or loss in column (h). Enter negative amounts in parentheses.

Example 1 – gain.

Column (d) is $6,000 and column (e) is $2,000. Enter $4,000 in column (h).

Example 2 – loss.

Column (d) is $6,000 and column (e) is $8,000. Enter ($2,000) in column (h).

Example 3 – adjustment.

Column (d) is $6,000, column (e) is $2,000, and column (g) is ($1,000). Enter $3,000 ($6,000 − $2,000 − $1,000) in column (h).

Line 13

See Capital Gain Distributions, earlier.

Line 18

If you checked “Yes” on line 17, complete the 28% Rate Gain Worksheet in these instructions if either of the following apply for 2013.

  • You reported in Part II of Form 8949 a section 1202 exclusion from the eligible gain on qualified small business stock (see Exclusion of Gain on Qualified Small Business (QSB) Stock, earlier).

  • You reported in Part II of Form 8949 a collectibles gain or (loss). A collectibles gain or (loss) is any long-term gain or deductible long-term loss from the sale or exchange of a collectible that is a capital asset.

Collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible property.

Include on the worksheet any gain (but not loss) from the sale or exchange of an interest in a partnership, S corporation, or trust held for more than 1 year and attributable to unrealized appreciation of collectibles. For details, see Regulations section 1.1(h)-1. Also, attach the statement required under Regulations section 1.1(h)-1(e).

28% Rate Gain Worksheet—Line 18

1. Enter the total of all collectibles gain or (loss) from items you reported on Form 8949, Part II 1.    
2. Enter as a positive number the amount of any section 1202 exclusion you reported in column (g) of Form 8949, Part II, with code “Q” in column (f), for which you excluded 50% of the gain, plus 2/3 of any section 1202 exclusion you reported in column (g) of Form 8949, Part II, with code “Q” in column (f), for which you excluded 60% of the gain 2.    
3. Enter the total of all collectibles gain or (loss) from Form 4684, line 4 (but only if Form 4684, line 15, is more than zero); Form 6252; Form 6781, Part II; and Form 8824 3.    
4. Enter the total of any collectibles gain reported to you on:
  • Form 1099-DIV, box 2d;

  • Form 2439, box 1d; and

  • Schedule K-1 from a partnership, S corporation, estate, or trust.

    4.    
5. Enter your long-term capital loss carryovers from Schedule D, line 14, and Schedule K-1 (Form 1041),  
box 11, code C
5. ( )  
6. If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter -0- 6. ( )  
7. Combine lines 1 through 6. If zero or less, enter -0-. If more than zero, also enter this amount on  
Schedule D, line 18
7.    
                     

Line 19

If you checked “Yes” on line 17, complete the Unrecaptured Section 1250 Gain Worksheet in these instructions if any of the following apply for 2013.

  • You sold or otherwise disposed of section 1250 property (generally, real property that you depreciated) held more than 1 year.

  • You received installment payments for section 1250 property held more than 1 year for which you are reporting gain on the installment method.

  • You received a Schedule K-1 from an estate or trust, partnership, or S corporation that shows “unrecaptured section 1250 gain.

  • You received a Form 1099-DIV or Form 2439 from a real estate investment trust or regulated investment company (including a mutual fund) that reports “unrecaptured section 1250 gain.

  • You reported a long-term capital gain from the sale or exchange of an interest in a partnership that owned section 1250 property.

Instructions for the Unrecaptured Section 1250 Gain Worksheet

Lines 1 through 3.   If you had more than one property described on line 1, complete lines 1 through 3 for each property on a separate worksheet. Enter the total of the line 3 amounts for all properties on line 3 and go to line 4.

Line 4.   To figure the amount to enter on line 4, follow the steps below for each installment sale of trade or business property held more than 1 year.

Step 1.

Figure the smaller of (a) the depreciation allowed or allowable, or (b) the total gain for the sale. This is the smaller of line 22 or line 24 of your 2013 Form 4797 (or the comparable lines of Form 4797 for the year of sale) for the property.

Step 2.

Reduce the amount figured in step 1 by any section 1250 ordinary income recapture for the sale. This is the amount from line 26g of your 2013 Form 4797 (or the comparable line of Form 4797 for the year of sale) for the property. The result is your total unrecaptured section 1250 gain that must be allocated to the installment payments received from the sale.

Step 3.

Generally, the entire amount of gain from the sale of trade or business property included in each installment payment is treated as unrecaptured section 1250 gain until the total unrecaptured section 1250 gain figured in step 2 has been used in full. Figure the amount of gain treated as unrecaptured section 1250 gain for installment payments received in 2013 as the smaller of (a) the amount from line 26 or line 37 of your 2013 Form 6252, whichever applies, or (b) the amount of unrecaptured section 1250 gain remaining to be reported. This amount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years (excluding section 1250 ordinary income recapture). However, if you chose not to treat all of the gain from payments received after May 6, 1997, and before August 24, 1999, as unrecaptured section 1250 gain, use only the amount you chose to treat as unrecaptured section 1250 gain for those payments to reduce the total unrecaptured section 1250 gain remaining to be reported for the sale. Include this amount on line 4.

Unrecaptured Section 1250 Gain Worksheet—Line 19

  If you are not reporting a gain on Form 4797, line 7, skip lines 1 through 9 and go to line 10.  
1. If you have a section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form 4797 (but not on Form 6252), enter the smaller of line 22 or line 24 of Form 4797 for that property. If you did not have any such property, go to line 4. If you had more than one such property, see instructions 1.      
2. Enter the amount from Form 4797, line 26g, for the property for which you made an entry on line 1 2.      
3. Subtract line 2 from line 1 3.      
4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 from installment sales of trade or business property held more than 1 year (see instructions) 4.      
5. Enter the total of any amounts reported to you on a Schedule K-1 from a partnership or an S corporation as “unrecaptured section 1250 gain 5.      
6. Add lines 3 through 5 6.      
7. Enter the smaller of line 6 or the gain from Form 4797, line 7 7.      
8. Enter the amount, if any, from Form 4797, line 8 8.      
9. Subtract line 8 from line 7. If zero or less, enter -0- 9.      
10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable to unrecaptured section 1250 gain (see instructions) 10.      
11. Enter the total of any amounts reported to you as “unrecaptured section 1250 gain” on a Schedule K-1, Form 1099-DIV, or Form 2439 from an estate, trust, real estate investment trust, or mutual fund (or other regulated investment company) or in connection with a Form 1099-R 11.      
12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or other dispositions of section 1250 property held more than 1 year for which you did not make an entry in Part I of Form 4797 for the year of sale (see instructions) 12.      
13. Add lines 9 through 12 13.      
14. If you had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1 through 4 of the 28% Rate Gain Worksheet. Otherwise, enter -0- 14.      
15. Enter the (loss), if any, from Schedule D, line 7. If Schedule D, line 7, is zero or a gain, enter -0- 15.   ( )  
16. Enter your long-term capital loss carryovers from Schedule D, line 14, and Schedule K-1 (Form 1041), box 11, code C* 16.   ( )  
17. Combine lines 14 through 16. If the result is a (loss), enter it as a positive amount. If the result is zero or a gain, enter -0- 17.      
18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. If more than zero, enter the result here and on Schedule D, line 19 18.      
           
  *If you are filing Form 2555 or 2555-EZ (relating to foreign earned income), see the footnote in the Foreign Earned Income Tax Worksheet in the Form 1040 instructions before completing this line.        
Line 10.   Include on line 10 your share of the partnership's unrecaptured section 1250 gain that would result if the partnership had transferred all of its section 1250 property in a fully taxable transaction immediately before you sold or exchanged your interest in that partnership. If you recognized less than all of the realized gain, the partnership will be treated as having transferred only a proportionate amount of each section 1250 property. For details, see Regulations section 1.1(h)-1. Also attach the statement required under Regulations 
section 1.1(h)-1(e).

Line 12.   An example of an amount to include on line 12 is unrecaptured section 1250 gain from the sale of a vacation home you previously used as a rental property but converted to personal use prior to the sale. To figure the amount to enter on line 12, follow the applicable instructions below.

Installment sales.

To figure the amount to include on line 12, follow the steps below for each installment sale of property held more than 1 year for which you did not make an entry in Part I of your Form 4797 for the year of sale.

  • Step 1. Figure the smaller of (a) the depreciation allowed or allowable, or (b) the total gain for the sale. This is the smaller of line 22 or line 24 of your 2013 Form 4797 (or the comparable lines of Form 4797 for the year of sale) for the property.

  • Step 2. Reduce the amount figured in step 1 by any section 1250 ordinary income recapture for the sale. This is the amount from line 26g of your 2013 Form 4797 (or the comparable line of Form 4797 for the year of sale) for the property. The result is your total unrecaptured section 1250 gain that must be allocated to the installment payments received from the sale.

  • Step 3. Generally, the amount of capital gain on each installment payment is treated as unrecaptured section 1250 gain until the total unrecaptured section 1250 gain figured in step 2 has been used in full. Figure the amount of gain treated as unrecaptured section 1250 gain for installment payments received in 2013 as the smaller of (a) the amount from line 26 or line 37 of your 2013 Form 6252, whichever applies, or (b) the amount of unrecaptured section 1250 gain remaining to be reported. This amount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years (excluding section 1250 ordinary income recapture). However, if you chose not to treat all of the gain from payments received after May 6, 1997, and before August 24, 1999, as unrecaptured section 1250 gain, use only the amount you chose to treat as unrecaptured section 1250 gain for those payments to reduce the total unrecaptured section 1250 gain remaining to be reported for the sale. Include this amount on line 12.

Other sales or dispositions of section 1250 property.

For each sale of property held more than 1 year (for which you did not make an entry in Part I of Form 4797), figure the smaller of (a) the depreciation allowed or allowable, or (b) the total gain for the sale. This is the smaller of line 22 or line 24 of Form 4797 for the property. Next, reduce that amount by any section 1250 ordinary income recapture for the sale. This is the amount from line 26g of Form 4797 for the property. The result is the total unrecaptured section 1250 gain for the sale. Include this amount on line 12.

Line 21

You have a capital loss carryover from 2013 to 2014 if you have a loss on line 16 and either:

  • That loss is more than the loss on line 21, or

  • The amount on Form 1040, line 41 (or Form 1040NR, line 39, if applicable), is less than zero.

To figure any capital loss carryover to 2014, you will use the Capital Loss Carryover Worksheet in the 2014 Instructions for Schedule D. If you want to figure your carryover to 2014 now, see Pub. 550.

You will need a copy of your 2013 Form 1040 and Schedule D to figure your capital loss carryover to 2014.

Schedule D Tax Worksheet

  Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero. Otherwise, complete the Qualified Dividends and Capital Gain Tax Worksheet in the Instructions for Form 1040, line 44 (or in the Instructions for Form 1040NR, line 42) to figure your tax. Before completing this worksheet, complete Form 1040 through line 43 (or Form 1040NR through line 41).  
   
Exception: Do not use the Qualified Dividends and Capital Gain Tax Worksheet or this worksheet to figure your tax if:
  • Line 15 or line 16 of Schedule D is zero or less and you have no qualified dividends on Form 1040, line 9b (or Form 1040NR, line 10b); or

  • Form 1040, line 43 (or Form 1040NR, line 41) is zero or less.

 
Instead, see the instructions for Form 1040, line 44 (or Form 1040NR, line 42).
 
 
  1.   Enter your taxable income from Form 1040, line 43 (or Form 1040NR, line 41). (However, if you are filing Form 2555 or 2555-EZ (relating to foreign earned income), enter instead the amount from line 3 of the Foreign Earned Income Tax Worksheet in the Instructions for Form 1040, line 44) 1.      
  2.   Enter your qualified dividends from Form 1040, line 9b (or Form 1040NR, line 10b) 2.        
  3.   Enter the amount from Form 4952 (used to figure investment interest expense deduction), line 4g 3.        
  4.   Enter the amount from Form 4952, line 4e* 4.        
  5.   Subtract line 4 from line 3. If zero or less, enter -0- 5.        
  6.   Subtract line 5 from line 2. If zero or less, enter -0-** 6.        
  7.   Enter the smaller of line 15 or line 16 of Schedule D 7.        
  8.   Enter the smaller of line 3 or line 4 8.        
  9.   Subtract line 8 from line 7. If zero or less, enter -0-** 9.        
  10.   Add lines 6 and 9 10.        
  11.   Add lines 18 and 19 of Schedule D** 11.        
  12.   Enter the smaller of line 9 or line 11 12.        
  13.   Subtract line 12 from line 10 13.      
  14.   Subtract line 13 from line 1. If zero or less, enter -0- 14.      
  15.   Enter:  
       
•$36,250 if single or married filing separately; 
•$72,500 if married filing jointly or qualifying widow(er); or 
•$48,600 if head of household
    15.        
  16.   Enter the smaller of line 1 or line 15 16.            
  17.   Enter the smaller of line 14 or line 16 17.        
  18.   Subtract line 10 from line 1. If zero or less, enter -0- 18.        
  19.   Enter the larger of line 17 or line 18 19.        
  20.   Subtract line 17 from line 16. This amount is taxed at 0%. 20.        
      If lines 1 and 16 are the same, skip lines 21 through 41 and go to line 42. Otherwise, go to line 21.  
  21.   Enter the smaller of line 1 or line 13 21.        
  22.   Enter the amount from line 20 (if line 20 is blank, enter -0-) 22.        
  23.   Subtract line 22 from line 21. If zero or less, enter -0- 23.              
  24.   Enter:        
   
•$400,000 if single; 
•$225,000 if married filing separately; 
•$450,000 if married filing jointly or qualifying widow(er); or 
•$425,000 if head of household
    24.      
 
  25.   Enter the smaller of line 1 or line 24 25.                    
  26.   Add lines 19 and 20 26.                    
  27.   Subtract line 26 from line 25. If zero or less, enter -0- 27.                    
  28.   Enter the smaller of line 23 or line 27       28.              
  29.   Multiply line 28 by 15% (.15) 29.        
  30.   Add lines 22 and 28 30.                    
      If lines 1 and 30 are the same, skip lines 31 through 41 and go to line 42. Otherwise, go to line 31.    

Schedule D Tax Worksheet—Continued

  31.   Subtract line 30 from line 21 31.            
  32.   Multiply line 31 by 20% (.20) 32.      
      If Schedule D, line 19, is zero or blank, skip lines 33 through 38 and go to line 39. Otherwise, go to line 33.  
  33.   Enter the smaller of line 9 above or Schedule D, line 19 33.        
  34.   Add lines 10 and 19 34.        
  35.   Enter the amount from line 1 above 35.        
  36.   Subtract line 35 from line 34. If zero or less, enter -0- 36.        
  37.   Subtract line 36 from line 33. If zero or less, enter -0- 37.        
  38.   Multiply line 37 by 25% (.25) 38.      
      If Schedule D, line 18, is zero or blank, skip lines 39 through 41 and go to line 42. Otherwise, go to line 39.  
  39.   Add lines 19, 20, 28, 31, and 37 39.        
  40.   Subtract line 39 from line 1 40.        
  41.   Multiply line 40 by 28% (.28) 41.      
  42.   Figure the tax on the amount on line 19. If the amount on line 19 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 19 is $100,000 or more, use the Tax Computation Worksheet 42.      
  43.   Add lines 29, 32, 38, 41, and 42 43.      
  44.   Figure the tax on the amount on line 1. If the amount on line 1 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet 44.      
  45.   Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 43 or line 44. Also include this amount on Form 1040, line 44 (or Form 1040NR, line 42). (If you are filing Form 2555 or 2555-EZ, do not enter this amount on Form 1040, line 44. Instead, enter it on line 4 of the Foreign Earned Income Tax Worksheet in the Form 1040 instructions) 45.      
               
      *If applicable, enter instead the smaller amount you entered on the dotted line next to line 4e of Form 4952.        
      **If you are filing Form 2555 or 2555-EZ, see the footnote in the Foreign Earned Income Tax Worksheet in the Instructions for Form 1040, line 44, before completing this line.        

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