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Capital Gains and Losses


Introduction

These instructions explain how to complete Schedule D (Form 1040). Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D.

Use Schedule D:

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

  • To report certain transactions you don't have to report on Form 8949;

  • To report a gain from Form 2439 or 6252 or Part I of Form 4797;

  • To report a gain or loss from Form 4684, 6781, or 8824;

  • To report a gain or loss from a partnership, S corporation, estate or trust;

  • 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); and

  • To report a capital loss carryover from 2015 to 2016.

Additional information.   See Pub. 544 and Pub. 550 for more details.

Future Developments

For the latest information about developments related to Schedule D and its instructions, such as legislation enacted after they were published, go to www.irs.gov/scheduled.

What's New

Basis of property acquired from decedent.   Section 2004 of Public Law 114-41 has two major requirements.
  1. An executor of an estate (or other person) who files an estate tax return after July 31, 2015, must provide Form 8971 with attached Schedules A to the IRS and a copy of the beneficiary's Schedule A to that beneficiary who receives or is to receive property from the estate. The statement must show the final estate tax value of the property. An executor (or other person) who files an estate tax return only to make an election regarding the generation-skipping transfer tax or portability of the deceased spousal unused exclusion (DSUE) may not be required to provide statements.

  2. If the property increases the estate tax liability, you must use a basis consistent with the estate tax value of the property to determine your initial basis in that property. Calculate a basis consistent with the final estate tax value by starting with the reported value and then making any allowed adjustments.

Notice 2016-27, 2016-15 I.R.B. 576 available at www.irs.gov/irb/2016-15_IRB/ar09.html, delayed the due date for providing the Schedule A in (1) above until June 30, 2016. For more information, see the Instructions for Form 8971 and Schedule A.


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