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16.   Reporting Gains and Losses

Table of Contents

What's New

Form 8949. Form 8949 is new. Many transactions that, in previous years, would have been reported on Schedule D (Form 1040) must be reported on Form 8949 if they occur in 2011. Complete Form 8949 before completing line 1, 2, 3, 8, 9, or 10 of Schedule D (Form 1040). Instructions on how to complete Form 8949 are included in the 2011 Instructions for Schedule D, Capital Gains and Losses.

Adjustments to gain or loss on Form 8949. In certain situations, you must put a code in column (b) of Form 8949 and make an adjustment to your gain or loss in column (g). See the Instructions for Schedule D.

Schedule D-1. Schedule D-1 is no longer in use. Form 8949 replaces it.

Introduction

This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Form 8949 and Schedule D (Form 1040). The discussion includes the following topics.

  • How to report short-term gains and losses.

  • How to report long-term gains and losses.

  • How to figure capital loss carryovers.

  • How to figure your tax on a net capital gain.

  • An illustrated example of how to complete Form 8949 and Schedule D (Form 1040).

If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D (Form 1040).

Useful Items - You may want to see:

Publication

  • 537 Installment Sales

  • 544 Sales and Other Dispositions of Assets

  • 550 Investment Income and Expenses

Form (and Instructions)

  • 8949 Sales and Other Dispositions of Capital Assets

  • Schedule D (Form 1040) Capital Gains and Losses

  • 4797 Sales of Business Property

  • 6252 Installment Sale Income

  • 8582 Passive Activity Loss Limitations

Reporting Capital Gains and Losses

At the time this publication went to print, the 2011 Instructions for Schedule D (Form 1040) had not been finalized. For the most current information about reporting gains and losses, see the 2011 Instructions for Schedule D at www.irs.gov/pub/irs-pdf/i1040sd.pdf and Form 8949 at www.irs.gov/form8949. Also see Publication 550.

Report capital gains and losses on Form 8949. Form 8949 is new. Many transactions that, in previous years, would have been reported on Schedule D (Form 1040) must be reported on Form 8949 if they occur in 2011. Complete Form 8949 before you complete line 1, 2, 3, 8, 9, or 10 of Schedule D (Form 1040).

Use Form 8949 to report:

  • The sale or exchange of a capital asset not reported on another form or schedule,

  • Gains from involuntary conversions (other than from casualty or theft) of capital assets not held for business or profit, and

  • Nonbusiness bad debts.

Use Schedule D (Form 1040):

  • To figure the overall gain or loss from transactions reported on Form 8949, and

  • To report capital gain distributions not reported directly on Form 1040, line 13 (or effectively connected capital gain distributions not reported directly on Form 1040NR, line 14).

On Form 8949, enter all sales and exchanges of capital assets, including stocks, bonds, etc., and real estate (if not reported on Form 4684, 4797, 6252, 6781, or 8824). Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. Report short-term gains or losses on line 1. Report long-term gains or losses on line 3. Use as many Forms 8949 as you need.

Exceptions to filing Form 8949 and Schedule D (Form 1040).   There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040).

Exception 1.   You do not have to file Form 8949 or Schedule D (Form 1040) if both of the following apply.

  1. You have no capital losses, and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements).

  2. None of the Form(s) 1099-DIV (or substitute statements) have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain).

If both the above statements apply, report your capital gain distributions directly on line 13 of Form 1040 and check the box on line 13. Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax.

  You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if both the following are true.

  • None of the Forms 1099-DIV (or substitute statements) you received have an amount in box 2b, 2c, or 2d.

  • You do not have to file Form 1040 for any other capital gains or losses.

Exception 2.   You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are:

  • Capital gain distributions,

  • A capital loss carryover from 2010,

  • A gain from Form 2439 or 6252 or Part I of Form 4797,

  • A gain or loss from Form 4684, 6781, or 8824, or

  • A gain or loss from a partnership, S corporation, estate, or trust.

Installment sales.   You cannot use the installment method to report a gain from the sale of stock or securities traded on an established securities market. You must report the entire gain in the year of sale (the year in which the trade date occurs).

Passive activity gains and losses.    If you have gains or losses from a passive activity, you may also have to report them on Form 8582. In some cases, the loss may be limited under the passive activity rules. Refer to Form 8582 and its separate instructions for more information about reporting capital gains and losses from a passive activity.

Form 1099-B transactions.   If you sold property, such as stocks, bonds, or certain commodities, through a broker, you should receive Form 1099-B or substitute statement from the broker. Use the Form 1099-B or the substitute statement to complete Form 8949. If you sold a covered security in 2011, your broker will send you a Form 1099-B (or substitute statement) that shows your basis. This will help you complete Form 8949. Generally, a covered security is a security you acquired after 2010, with certain exceptions explained in the Instructions for Schedule D.

  Report the gross proceeds shown in box 2 of Form 1099-B as the sales price in column (e) of either line 1 or line 3 of Form 8949, whichever applies. However, if the broker shows, in box 2 of Form 1099-B, that gross proceeds (sales price) less commissions and option premiums were reported to the IRS, enter that net sales price in column (e) of either line 1 or line 3 of Form 8949, whichever applies.

   If the net sales price is entered in column (e), do not include the commissions and option premiums in column (f).

Form 1099-CAP transactions.   If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP or a substitute statement from the corporation. Use the Form 1099-CAP or substitute statement to fill in Form 8949. If your computations show that you would have a loss because of the change, do not enter any amounts on Form 8949 or Schedule D (Form 1040). You cannot claim a loss on Schedule D (Form 1040) as a result of this transaction.

  Report the aggregate amount received shown in box 2 of Form 1099-CAP as the sales price in column (e) of either line 1 or line 3 of Form 8949, whichever applies.

Form 1099-S transactions.   If you sold or traded reportable real estate, you generally should receive from the real estate reporting person a Form 1099-S showing the gross proceeds.

   “Reportable real estate” is defined as any present or future ownership interest in any of the following:

  • Improved or unimproved land, including air space,

  • Inherently permanent structures, including any residential, commercial, or industrial building,

  • A condominium unit and its accessory fixtures and common elements, including land, and

  • Stock in a cooperative housing corporation (as defined in section 216 of the Internal Revenue Code).

  A “real estate reporting person” could include the buyer's attorney, your attorney, the title or escrow company, a mortgage lender, your broker, the buyer's broker, or the person acquiring the biggest interest in the property.

  Your Form 1099-S will show the gross proceeds from the sale or exchange in box 2. For how to report these transactions on Form 8949, see the Instructions for Schedule D. Report like-kind exchanges on Form 8824.

  It is unlawful for any real estate reporting person to separately charge you for complying with the requirement to file Form 1099-S.

Nominees.   If you receive gross proceeds as a nominee (that is, the gross proceeds are in your name but actually belong to someone else), see the Instructions for Schedule D for how to report these amounts on Form 8949.

File Form 1099-B or Form 1099-S with the IRS.   If you received gross proceeds as a nominee in 2011, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. Send the Form 1099-B or Form 1099-S with a Form 1096, Annual Summary and Transmittal of U.S. Information Returns, to your Internal Revenue Service Center by February 28, 2012 (April 2, 2012, if you file Form 1099-B or Form 1099-S electronically). Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 16, 2012. On Form 1099-B, you should be listed as the “Payer.” The other owner should be listed as the “Recipient.” On Form 1099-S, you should be listed as the “Filer.” The other owner should be listed as the “Transferor.” You do not, however, have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the 2011 General Instructions for Certain Information Returns. If you are filing electronically see Publication 1220.

Sale of property bought at various times.   If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on line 1 in Part I of Form 8949, and the long-term gain or loss on line 3 in Part II of Form 8949. Write “Various” in column (c) for the “Date acquired.” See the Comprehensive Example later in this chapter.

Sale expenses.    Add to your cost or other basis any expense of sale such as brokers' fees, commissions, state and local transfer taxes, and option premiums. Enter this adjusted amount in column (f) of either Part I or Part II of Form 8949, whichever applies, unless you reported the net sales price amount in column (e) of Form 8949.

  For more information about adjustments to basis, see chapter 13.

Short-term gains and losses.   Capital gain or loss on the sale or trade of investment property held 1 year or less is a short-term capital gain or loss. You report it in Part I of Form 8949.

  You combine your share of short-term capital gain or loss from partnerships, S corporations, estates, and trusts, and any short-term capital loss carryover, with your other short-term capital gains and losses to figure your net short-term capital gain or loss on line 7 of Schedule D (Form 1040).

Long-term gains and losses.    A capital gain or loss on the sale or trade of investment property held more than 1 year is a long-term capital gain or loss. You report it in Part II of Form 8949.

  You report the following in Part II of Schedule D (Form 1040):

  • Undistributed long-term capital gains from a mutual fund (or other regulated investment company) or real estate investment trust (REIT),

  • Your share of long-term capital gains or losses from partnerships, S corporations, estates, and trusts,

  • All capital gain distributions from mutual funds and REITs not reported directly on line 10 of Form 1040A or line 13 of Form 1040, and

  • Long-term capital loss carryovers.

   The result after combining these items with your other long-term capital gains and losses is your net long-term capital gain or loss (Schedule D (Form 1040), line 15).

Total net gain or loss.   To figure your total net gain or loss, combine your net short-term capital gain or loss (Schedule D (Form 1040), line 7) with your net long-term capital gain or loss (Schedule D (Form 1040), line 15). Enter the result on Schedule D (Form 1040), Part III, line 16. If your losses are more than your gains, see Capital Losses , next. If both lines 15 and 16 of Schedule D (Form 1040) are gains and line 43 of Form 1040 is more than zero, see Capital Gain Tax Rates , later.

Capital Losses

If your capital losses are more than your capital gains, you can claim a capital loss deduction. Report the amount of the deduction on line 13 of Form 1040, in parentheses.

Limit on deduction.   Your allowable capital loss deduction, figured on Schedule D (Form 1040), is the lesser of:

  • $3,000 ($1,500 if you are married and file a separate return), or

  • Your total net loss as shown on line 16 of Schedule D (Form 1040).

  You can use your total net loss to reduce your income dollar for dollar, up to the $3,000 limit.

Capital loss carryover.   If you have a total net loss on line 16 of Schedule D (Form 1040) that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. If part of the loss is still unused, you can carry it over to later years until it is completely used up.

  When you figure the amount of any capital loss carryover to the next year, you must take the current year's allowable deduction into account, whether or not you claimed it and whether or not you filed a return for the current year.

  When you carry over a loss, it remains long term or short term. A long-term capital loss you carry over to the next tax year will reduce that year's long-term capital gains before it reduces that year's short-term capital gains.

Figuring your carryover.   The amount of your capital loss carryover is the amount of your total net loss that is more than the lesser of:

  1. Your allowable capital loss deduction for the year, or

  2. Your taxable income increased by your allowable capital loss deduction for the year and your deduction for personal exemptions.

  If your deductions are more than your gross income for the tax year, use your negative taxable income in computing the amount in item (2).

   Complete the Capital Loss Carryover Worksheet in the Instructions for Schedule D or Publication 550 to determine the part of your capital loss for 2011 that you can carry over to 2012.

Example.

Bob and Gloria sold securities in 2011. The sales resulted in a capital loss of $7,000. They had no other capital transactions. Their taxable income was $26,000. On their joint 2011 return, they can deduct $3,000. The unused part of the loss, $4,000 ($7,000 − $3,000), can be carried over to 2012.

If their capital loss had been $2,000, their capital loss deduction would have been $2,000. They would have no carryover.

Use short-term losses first.   When you figure your capital loss carryover, use your short-term capital losses first, even if you incurred them after a long-term capital loss. If you have not reached the limit on the capital loss deduction after using the short-term capital losses, use the long-term capital losses until you reach the limit.

Decedent's capital loss.    A capital loss sustained by a decedent during his or her last tax year (or carried over to that year from an earlier year) can be deducted only on the final income tax return filed for the decedent. The capital loss limits discussed earlier still apply in this situation. The decedent's estate cannot deduct any of the loss or carry it over to following years.

Joint and separate returns.   If you and your spouse once filed separate returns and are now filing a joint return, combine your separate capital loss carryovers. However, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss.

Capital Gain Tax Rates

The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. These lower rates are called the maximum capital gain rates.

The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss.

For 2011, the maximum capital gain rates are 0%, 15%, 25%, or 28%. See Table 16-1 for details.

If you figure your tax using the maximum capital gain rates and the regular tax computation results in a lower tax, the regular tax computation applies.

Example.

All of your net capital gain is from selling collectibles, so the capital gain rate would be 28%. Because you are single and your taxable income is $25,000, none of your taxable income will be taxed above the 15% rate. The 28% rate does not apply.

Investment interest deducted.   If you claim a deduction for investment interest, you may have to reduce the amount of your net capital gain that is eligible for the capital gain tax rates. Reduce it by the amount of the net capital gain you choose to include in investment income when figuring the limit on your investment interest deduction. This is done on the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet. For more information about the limit on investment interest, see Interest Expenses in chapter 3 of Publication 550.

Table 16-1. What Is Your Maximum Capital Gain Rate?

IF your net capital gain is from ... THEN your  
maximum capital 
gain rate is ...
a collectibles gain 28%
an eligible gain on qualified small business stock minus the section 1202 exclusion 28%
an unrecaptured section 1250 gain 25%
other gain1 and the regular tax rate that would apply is 25% or higher 15%
other gain1 and the regular tax rate that would apply is lower than 25% 0%
1 Other gain means any gain that is not collectibles gain, gain on qualified small business stock, or 
unrecaptured section 1250 gain.
 
 

Collectibles gain or loss.   This is gain or loss from the sale or trade of a work of art, rug, antique, metal (such as gold, silver, and platinum bullion), gem, stamp, coin, or alcoholic beverage held more than 1 year.

  Collectibles gain includes gain from sale of an interest in a partnership, S corporation, or trust due to unrealized appreciation of collectibles.

Gain on qualified small business stock.    If you realized a gain from qualified small business stock that you held more than 5 years, you generally can exclude up to 50% of your gain from income. The exclusion can be up to 75% for stock acquired after February 17, 2009 (100% for stock acquired after September 27, 2010, and before January 1, 2012). The exclusion can be up to 60% for certain empowerment zone business stock. The eligible gain minus your section 1202 exclusion is a 28% rate gain. See Gains on Qualified Small Business Stock in chapter 4 of Publication 550.

Unrecaptured section 1250 gain.    Generally, this is any part of your capital gain from selling section 1250 property (real property) that is due to depreciation (but not more than your net section 1231 gain), reduced by any net loss in the 28% group. Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions to figure your unrecaptured section 1250 gain. For more information about section 1250 property and section 1231 gain, see chapter 3 of Publication 544.

Tax computation using maximum capital gains rates.   Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet (whichever applies) to figure your tax if you have qualified dividends or net capital gain. You have net capital gain if Schedule D (Form 1040), lines 15 and 16, are both gains.

Schedule D Tax Worksheet.   Use the Schedule D Tax Worksheet in the Schedule D instructions to figure your tax if:

  • You have to file Schedule D (Form 1040), and

  • Schedule D (Form 1040), line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain), is more than zero.

See Comprehensive Example , later, for an example of how to figure your tax using the Schedule D Tax Worksheet.

Qualified Dividends and Capital Gain Tax Worksheet.   If you do not have to use the Schedule D Tax Worksheet (as explained above) and any of the following apply, use the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040 or Form 1040A (whichever you file) to figure your tax.

Alternative minimum tax.   These capital gain rates are also used in figuring alternative minimum tax.

Comprehensive Example

For more information on Form 8949 and Schedule D (Form 1040), see Schedule D (Form 1040), Form 8949, and the Instructions for Schedule D. Also see Publication 550.

Emily Jones is single and, in addition to wages from her job, she has income from stocks and other securities. For the 2011 tax year, she had the following capital gains and losses, which she reports on Form 8949 and Schedule D. Her filled-in Form 8949 and Schedule D are shown at the end of this example.

Capital gains and losses — Form 8949 and Schedule D (Form 1040).   Emily sold stock in two different companies that she held for less than a year. In June, she sold 100 shares of Trucking Co. stock that she bought in February. She had an adjusted basis of $1,150 in the stock and sold it for $400. In July, she sold 25 shares of Computer Co. stock that she bought in June. She had an adjusted basis in the stock of $2,000 and sold it for $2,500. She reports these short-term transactions on line 1 in Part I of Form 8949.

  Emily had other stock sales that she reports as long-term transactions on line 3 in Part II of Form 8949.

  In June, she sold 500 shares of Furniture Co. stock for $5,000. She bought 100 of those shares in 1999, for $1,000. She bought 100 more shares in 2001 for $2,200, and an additional 300 shares in 2004 for $1,500. Her total basis in the stock is $4,700. She reports this transaction on line 3 in Part II of Form 8949.

  In December, she sold 20 shares of Toy Co. stock for $4,100. This was qualified small business stock that she bought in September 2006. Her basis is $1,100. She reports this transaction on line 3 of Part II of Form 8949.

  Emily received a Form 1099-B (not shown) from her broker for each of these transactions. Each Form 1099-B contains the correct information for the transaction, including the basis shown in box 3. She will check box A in Part I of Form 8949 where she reports her short-term transactions. She will also check box A in Part II of Form 8949 where she reports her long-term transactions.

  Emily held her qualified small business stock for more than 5 years, so she can exclude 50% ($1,500) of the gain. She takes the exclusion by reporting the gain realized on the sale on Form 8949, line 3, as if she were not taking the exclusion. She completes all columns on Form 8949. She enters “S” in column (b) and the amount of the excluded gain as a negative number (in parentheses) in column (g). She also enters the exclusion as a positive number on line 2 of the 28% Rate Gain Worksheet.

  Emily completes her Form 8949 and then transfers the amounts from her Form 8949 to Schedule D. She enters the amounts from her short-term transactions from columns (e) and (f) of line 2 of Form 8949, in columns (e) and (f) of line 1 of Schedule D. She has a short-term capital loss of $250 that she enters in column (h) of line 1 of Schedule D. She enters the amounts from her long-term transactions from columns (e), (f), and (g) of line 4 of Form 8949, in columns (e), (f), and (g) of line 8 of Schedule D. She has a long-term capital gain of $1,800 that she enters in column (h) of line 8 of Schedule D.

Capital loss carryover from 2010.   Emily has a capital loss carryover to 2011 of $800, of which $300 is short-term capital loss, and $500 is long-term capital loss. She enters these amounts on lines 6 and 14 of Schedule D. She also enters the $500 long-term capital loss carryover on line 5 of the 28% Rate Gain Worksheet.

  She kept the completed Capital Loss Carryover Worksheet in her 2010 edition of Publication 550 (not shown), so she could properly report her loss carryover for the 2011 tax year without refiguring it.

Tax computation.   Because Emily has gains on both lines 15 and 16 of Schedule D, she checks the “Yes” box on line 17 and goes to line 18. On line 18 she enters $450 from line 7 of the 28% Rate Gain Worksheet. Because line 18 of Schedule D is greater than zero, she checks the “No” box on line 20 and uses the Schedule D Tax Worksheet to figure her tax.

  After entering the gain from line 16 of Schedule D on line 13 of her Form 1040, she completes the rest of Form 1040 through line 43. She enters the amount from that line, $30,000, on line 1 of the Schedule D Tax Worksheet. After filling out the rest of that worksheet, she figures her tax as $4,034. This is less than the tax she would have figured without the capital gain tax rates, $4,079.

  

28% Rate Gain Worksheet for Emily Jones—Line 18

1. Enter the total of all collectibles gain or (loss) from items you reported on Form 8949, line 3 1. 0  
2. Enter as a positive number the amount of any section 1202 exclusion you reported in column (g) of Form 8949, line 3, with code “S” in column (b), for which you excluded 50% of the gain, plus 2/3 of any section 1202 exclusion you reported in column (g) of Form 8949, line 3, with code “S” in column (b), for which you excluded 60% of the gain 2. 1,500  
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.
Right brace
   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. ( 500)  
6. If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter -0- 6. ( 550)  
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. 450  

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.  
   
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.   30,000  
  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.   750    
  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.   750    
  10.   Add lines 6 and 9       10.   750    
  11.   Add lines 18 and 19 of Schedule D** 11.   450    
  12.   Enter the smaller of line 9 or line 11 12.   450    
  13.   Subtract line 12 from line 10 13.   300  
  14.   Subtract line 13 from line 1. If zero or less, enter -0- 14.   29,700  
  15.   Enter:  
       
•$34,500 if single or married filing separately; 
•$69,000 if married filing jointly or qualifying widow(er); or 
•$46,250 if head of household
Right brace
   15.   34,500    
  16.   Enter the smaller of line 1 or line 15 16.   30,000        
  17.   Enter the smaller of line 14 or line 16 17.   29,700    
  18.   Subtract line 10 from line 1. If zero or less, enter -0- 18.   29,250    
  19.   Enter the larger of line 17 or line 18 19.   29,700    
  20.   Subtract line 17 from line 16. This amount is taxed at 0%. 20.   300    
      If lines 1 and 16 are the same, skip lines 21 through 33 and go to line 34. 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.   Multiply line 23 by 15% (.15) 24.      
      If Schedule D, line 19, is zero or blank, skip lines 25 through 30 and go to line 31. Otherwise, go to line 25.  
  25.   Enter the smaller of line 9 above or Schedule D, line 19 25.        
  26.   Add lines 10 and 19 26.        
  27.   Enter the amount from line 1 above 27.        
  28.   Subtract line 27 from line 26. If zero or less, enter -0- 28.        
  29.   Subtract line 28 from line 25. If zero or less, enter -0- 29.        
  30.   Multiply line 29 by 25% (.25) 30.      
      If Schedule D, line 18, is zero or blank, skip lines 31 through 33 and go to line 34. Otherwise, go to line 31.  
  31.   Add lines 19, 20, 23, and 29 31.        
  32.   Subtract line 31 from line 1 32.        
  33.   Multiply line 32 by 28% (.28) 33.      
  34.   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 34.   4,034  
  35.   Add lines 24, 30, 33, and 34 35.   4,034  
  36.   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 36.   4,079  
  37.   Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 35 or line 36. 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) 37.   4,034  
               
      *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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Form 8949, Page 1

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Form 8949, Page 2

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Schedule (Form 1040): D, page 1

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Schedule D, page 2

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