Question

I am in need of Schedule D instructions. How do I complete a Schedule D tax form?

Answer

Regarding Schedule D tax instructions, if you have any sales of capital assets, you must first complete Form 8949: Sales and Dispositions of Capital Assets. Use Part I for sales of short-term assets — held for one year or less. Use Part II for sales of long-term assets — held for more than one year. You’ll need this information:

  • Description of property
  • Purchase price
  • Purchase date
  • Selling price
  • Selling date
  • Adjustments

After you enter this information, you’ll calculate the gain or loss in the last column. Enter the totals at the bottom of each part. Then, enter the results on the Schedule D tax form, on the appropriate lines (1, 2, 3, 8, 9 or 10).

You’ll then fill in other applicable information on the Schedule D tax form. This information includes:

  • Gains and losses from other forms — like Forms 4797, 6252, 8824, and others
  • Gains and losses from Schedule K-1
  • Loss carryovers
  • Qualified dividends

Enter this in Parts I (for short-term) and II (for long-term) that correspond to Form 8949, Parts I and II. In Part III, you’ll net Parts I and II. Then, you’ll calculate:

  • Which tax calculation form to use
  • How much capital gain or loss to report on Form 1040

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