Instructions for Form 8949

What's New

Form 8949 and Schedule D have been revised to require additional reporting for certain dispositions of capital assets. These changes are designed to help taxpayers and the IRS match information reported on Forms 1099-B with information reported on tax returns.

General Instructions

Purpose of Form

Use Form 8949 to report sales and exchanges of capital assets. Form 8949 allows you and the IRS to reconcile amounts that were reported to you and the IRS on Form 1099-B or 1099-S (or substitute statement) with the amounts you report on your income tax return.

Who Must File

You must file Form 8949 with your Schedule D if you have:

• Gain or loss from the sale or exchange of a capital asset not reported on another form or schedule
• Gain from an installment sale not reported on Form 6252
• Gain or loss from the disposition of nonbusiness bad debt
• Undistributed long-term capital gain from a trust or estate

Column Instructions

Column (a) - Description of Property

Enter a description of the property sold or exchanged. For stocks, bonds, and other securities, enter the name of the security, the number of shares, and whether the transaction was a short sale. For real estate, enter the address or legal description.

Column (b) - Date Acquired

Enter the date you acquired the property. For property acquired by inheritance, enter the date of the decedent's death. Use the trade date for stocks and bonds.

Column (c) - Date Sold or Disposed Of

Enter the date you sold or disposed of the property. Use the trade date for stocks and bonds.

Column (d) - Proceeds (Sales Price)

Enter the gross proceeds from the sale or exchange. This should match the amount reported on Form 1099-B, Box 1d.

Column (e) - Cost or Other Basis

Enter your cost or other basis in the property. Include commissions and other costs of acquisition and sale.

Column (f) - Adjustment Code

Enter the appropriate adjustment code from the list in these instructions if you made any adjustments to basis or proceeds.

Column (g) - Amount of Adjustment

Enter the total amount of adjustments from column (f). Enter negative amounts in parentheses.

Column (h) - Gain or (Loss)

Subtract the adjusted basis (column (e) plus column (g)) from the proceeds (column (d)). Enter negative amounts in parentheses.

Adjustment Codes

Use the following codes to identify adjustments made to basis or proceeds:

• A: Nontaxable portion of an annuity payment
• B: Taxable portion of an annuity payment
• C: Exercise of employee stock option
• D: Qualified disaster loss deduction
• E: Qualified disaster distribution
• F: Qualified opportunity zone investment
• G: Rollover of qualified opportunity zone investment
• H: Qualified disaster recovery assistance

Part I vs. Part II

Part I - Short-Term

Use Part I for transactions resulting in short-term capital gains and losses (property held 1 year or less).

Part II - Long-Term

Use Part II for transactions resulting in long-term capital gains and losses (property held more than 1 year).

If you have both short-term and long-term transactions, complete both parts.

Reporting Cryptocurrency Transactions

For cryptocurrency transactions, report each disposition separately on Form 8949. Include:

• Description: Name of cryptocurrency (e.g., "Bitcoin")
• Quantity: Number of units sold
• Proceeds: Total sales price in U.S. dollars
• Cost Basis: Total cost of units sold
• Holding Period: Date acquired and date sold

Use the appropriate adjustment codes if you have wash sales or other adjustments.

Form 1099-B Reconciliation

Box A - Basis Reported to IRS

Check this box if the basis shown on Form 1099-B was reported to the IRS.

Box B - Basis Not Reported to IRS

Check this box if the basis shown on Form 1099-B was not reported to the IRS.

Box C - Basis Reported to IRS but Incorrect

Check this box if the basis shown on Form 1099-B was reported to the IRS but is incorrect.

Summary

After completing Form 8949, transfer the totals to Schedule D. The totals from Schedule D are then transferred to Form 1040.

Remember to keep detailed records of all your transactions, including dates, amounts, and cost basis information, in case of an audit.

Additional Resources