I Need to Report Gains and Losses for Stocks I Sold. Where Do I Report This?
When you sell stocks or other capital assets, you must report the resulting gains or losses on your federal tax return. The reporting process involves specific IRS forms, primarily Form 8949 and Schedule D (Form 1040).
Step-by-Step Reporting Process
- Start with Form 8949: Use Form 8949, Sales and Other Dispositions of Capital Assets, to list each individual transaction. This form captures details such as the date of acquisition, date of sale, proceeds, and cost basis.
- Classify as Short-Term or Long-Term:
- Short-term gains/losses (held 1 year or less) go on Part I of Form 8949.
- Long-term gains/losses (held more than 1 year) go on Part II of Form 8949.
- Summarize on Schedule D: After completing Form 8949, summarize your total short-term and long-term gains and losses on Schedule D (Form 1040). This form calculates your net capital gain or loss and includes it in your overall taxable income.
- Attach Supporting Documents: If you received a 1099-B or 1099-S from your broker, you may need to reference those forms when entering data into Form 8949.
Special Cases
- Digital Assets: If you sold virtual currency (like cryptocurrency), report the gain or loss on Form 8949 and summarize on Schedule D, just like stocks.
- Main Home Sale: If you sold your main home and need to report a gain or loss, use Form 8949. Short-term gains go in Part I; long-term in Part II.
- Section 1244 Stock: If you sold small business stock and have an ordinary loss, report it on Form 4797. If the loss exceeds $50,000 ($100,000 on joint return), also report the excess on Form 8949.
Using OLT Software
In the Online Taxes (OLT) software, navigate to the Federal return section. Under Income, scroll to "Capital Gains or Losses" and click "Show More." Then select "Start" next to "Capital Gain/Loss - Schedule D, Form 8949, 1099-B, 1099-S." You can add transactions from a 1099-B or 1099-S directly.
Source:
Form 8949
Schedule D (Form 1040)
Digital Asset Reporting
Form 4797
Disclaimer: Always verify details with official IRS forms and instructions or your state Department of Revenue. The information provided is based on retrieved context and may not reflect all current tax law changes.