Department of the Treasury

Internal Revenue Service

2023 Instructions for Schedule D

Capital Gains

and Losses

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 or 

1040-SR, line 7 (or effectively connected capital gain distributions not reported directly on Form 1040-NR, line 7); and

• To report a capital loss carryover from 2022 to 2023.

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

Section references are to the Internal 

Revenue Code unless otherwise noted.

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 IRS.gov/

ScheduleD.

What’s New

Deferral of gain invested in a qualified 

opportunity fund (QOF). Taxpayers 

who made a deferral election in a QOF 

that meets the 5-year holding period 

threshold shall be eligible for the 10% 

stepped up basis. See Form 8997 and its 

instructions for additional information 

regarding QOFs.

General 

Instructions

Other Forms You May Have 

To File

Use Form 461 to figure your excess 

business loss.

Use Form 8949 to report the sale or 

exchange of a capital asset (defined later) not reported on another form or 

schedule and to report the income deferral or exclusion of capital gains. See the 

Instructions for Form 8949. Complete 

all necessary pages of Form 8949 before 

you complete line 1b, 2, 3, 8b, 9, or 10 

of Schedule D. See Lines 1a and 8a, later, for more information about when 

Form 8949 is needed and when it isn't.

Use Form 4797 to report the following.

1. The sale or exchange of:

a. Real property used in your trade 

or business;

b. Depreciable and amortizable tangible property used in your trade or 

business (but see Disposition of Depreciable Property Not Used in Trade or 

Business in the Form 4797 instructions);

c. Oil, gas, geothermal, or other 

mineral property; and

d. Section 126 property.

2. The involuntary conversion (other 

than from casualty or theft) of property 

used in a trade or business and capital 

assets held more than 1 year for business 

or profit. But see Disposition of Depreciable Property Not Used in Trade or 

Business in the Form 4797 instructions.

3. The disposition of noncapital assets other than inventory or property 

held primarily for sale to customers in 

the ordinary course of your trade or 

business.

4. Ordinary loss on the sale, exchange, or worthlessness of small business investment company (section 1242) 

stock.

5. Ordinary loss on the sale, exchange, or worthlessness of small business (section 1244) stock.

6. Ordinary gain or loss on securities or commodities held in connection 

with your trading business, if you previously made a mark-to-market election. 

See Traders in Securities, later.

Use Form 4684 to report involuntary 

conversions of property due to casualty 

or theft.

Use Form 6781 to report gains and 

losses from section 1256 contracts and 

straddles.

Use Form 8824 to report like-kind 

exchanges. A like-kind exchange occurs 

when you exchange business or investment property for property of a like 

kind.

Use Form 8960 to figure any net investment income tax relating to gains 

and losses reported on Schedule D, including gains and losses from a securities trading activity.

Use Form 8997 to report each QOF 

investment you held at the beginning 

and end of the tax year and the deferred 

gains associated with each investment. 

Also, use Form 8997 to report any capital gains you are deferring by investing 

in a QOF during the tax year and any 

QOF investment you disposed of during 

the tax year.

Capital Asset

Most property you own and use for personal purposes or investment is a capital 

asset. For example, your house, furniture, car, stocks, and bonds are capital 

assets. A capital asset is any property 

owned by you except the following.

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Oct 30, 2023 Cat. No. 24331I
1. Stock in trade or other property 

included in inventory or held mainly for 

sale to customers in the ordinary course 

of your trade or business. But see the 

TIP about certain musical compositions 

or copyrights, later.

2. Accounts or notes receivable:

a. For services rendered in the ordinary course of your trade or business,

b. For services rendered as an employee, or

c. From the sale of stock in trade or 

other property included in inventory or 

held mainly for sale to customers.

3. Depreciable property used in your 

trade or business, even if it is fully depreciated.

4. Real estate used in your trade or 

business.

5. A patent, invention, model, or design (whether or not patented); a secret 

formula or process; a copyright; a literary, musical, or artistic composition; a 

letter or memorandum; or similar property that is:

a. Created by your personal efforts;

b. Prepared or produced for you (in 

the case of a letter, memorandum, or 

similar property); or

c. Received under circumstances 

(such as by gift) that entitle you to the 

basis of the person who created the 

property or for whom the property was 

prepared or produced. See section 

1221(a)(3).

But see the TIP about certain musical 

compositions or copyrights below.

6. A U.S. Government publication, 

including the Congressional Record, that 

you received:

a. From the U.S. Government (or 

any governmental agency) for an 

amount other than the normal sales 

price, or

b. Under circumstances (such as by 

gift) that entitle you to the basis of 

someone who received the publication 

for an amount other than the normal 

sales price.

7. Certain commodities derivative 

financial instruments held by a dealer 

and connected to the dealer's activities 

as a dealer. See section 1221(a)(6) and 

(b)(1).

8. Certain hedging transactions entered into in the normal course of your 

trade or business. See section 1221(a)(7) 

and (b)(2).

9. Supplies regularly used in your 

trade or business.

You can elect to treat as capital 

assets certain musical compositions or copyrights you sold or 

exchanged. See Pub. 550 for details.

Basis and Recordkeeping

Basis is the amount of your investment 

in property for tax purposes. The basis 

of property you buy is usually its cost. 

There are special rules for certain kinds 

of property, such as inherited property. 

You need to know your basis to figure 

any gain or loss on the sale or other disposition of the property. You must keep 

accurate records that show the basis and, 

if applicable, adjusted basis of your 

property. Your records should show the 

purchase price, including commissions; 

increases to basis, such as the cost of 

improvements; and decreases to basis, 

such as depreciation, nondividend distributions on stock, and stock splits.

If you received a Schedule A to Form 

8971 from an executor of an estate or 

other person required to file an estate tax 

return, you may be required to report a 

basis consistent with the estate tax value 

of the property.

For more information on consistent 

basis reporting and basis generally, see 

Column (e)—Cost or Other Basis in the 

Instructions for Form 8949, and the following publications.

• Pub. 551, Basis of Assets.

• Pub. 550, Investment Income and

Expenses.

Short- or Long-Term Gain or 

Loss

Report short-term gains or losses in Part 

I. Report long-term gains or losses in 

Part II. The holding period for 

short-term capital gains and losses is 

generally 1 year or less. The holding period for long-term capital gains and losses is generally more than 1 year. However, beginning in 2018, the long-term 

holding period for certain gains with respect to “applicable partnership interests” is more than 3 years. See Pub. 541 

for more information.

TIP

For more information about holding 

periods, see the Instructions for Form 

8949.

Capital Gain Distributions

These distributions are paid by a mutual 

fund (or other regulated investment 

company) or real estate investment trust 

from its net realized long-term capital 

gains. Distributions of net realized 

short-term capital gains aren't treated as 

capital gains. Instead, they are included 

on Form 1099-DIV as ordinary dividends.

Enter on Schedule D, line 13, the total capital gain distributions paid to you 

during the year, regardless of how long 

you held your investment. This amount 

is shown in box 2a of Form 1099-DIV.

If there is an amount in box 2b, include that amount on line 11 of the Unrecaptured Section 1250 Gain Worksheet in these instructions if you complete line 19 of Schedule D.

If there is an amount in box 2c, see 

Exclusion of Gain on Qualified Small 

Business (QSB) Stock, later.

If there is an amount in box 2d, include that amount on line 4 of the 28% 

Rate Gain Worksheet in these instructions if you complete line 18 of Schedule D.

If you received capital gain distributions as a nominee (that is, they were 

paid to you but actually belong to someone else), report on Schedule D, line 13, 

only the amount that belongs to you. Attach a statement showing the full 

amount you received and the amount 

you received as a nominee. See the Instructions for Schedule B to learn about 

the requirement for you to file Forms 

1099-DIV and 1096.

Sale of Your Home

You may not need to report the sale or 

exchange of your main home. If you 

must report it, complete Form 8949 before Schedule D.

Report the sale or exchange of your 

main home on Form 8949 if:

• You can't exclude all of your gain 

from income, or

• You received a Form 1099-S for 

the sale or exchange.

Any gain you can't exclude is taxable. 

Generally, if you meet the following two 

D-2
tests, you can exclude up to $250,000 of 

gain. If both you and your spouse meet 

these tests and you file a joint return, 

you can exclude up to $500,000 of gain 

(but only one spouse needs to meet the 

ownership requirement in Test 1).

Test 1. During the 5-year period ending 

on the date you sold or exchanged your 

home, you owned it for 2 years or more 

(the ownership requirement) and lived in 

it as your main home for 2 years or more 

(the use requirement).

Test 2. You haven't excluded gain on 

the sale or exchange of another main 

home during the 2-year period ending on 

the date of the sale or exchange of your 

home.

Reduced exclusion. Even if you don't 

meet one or both of the above two tests, 

you can still claim an exclusion if you 

sold or exchanged the home because of 

a change in place of employment, 

health, or certain unforeseen circumstances. In this case, the maximum amount 

of gain you can exclude is reduced. For 

more information, see Pub. 523.

Sale of home by surviving spouse. If 

your spouse died before the sale or exchange, you can still exclude up to 

$500,000 of gain if:

• The sale or exchange is no later 

than 2 years after your spouse's death;

• Just before your spouse's death, 

both spouses met the use requirement of 

Test 1, at least one spouse met the ownership requirement of Test 1, and both 

spouses met Test 2; and

• You didn't remarry before the sale 

or exchange.

Exceptions to Test 1. You can choose 

to have the 5-year test period for ownership and use in Test 1 suspended during 

any period you or your spouse serves 

outside the United States as a Peace 

Corps volunteer or serves on qualified 

official extended duty as a member of 

the uniformed services or Foreign Service of the United States, as an employee 

of the intelligence community, or outside the United States as an employee of 

the Peace Corps. This means you may 

be able to meet Test 1 even if, because 

of your service, you didn't actually use 

the home as your main home for at least 

the required 2 years during the 5-year 

period ending on the date of sale. The 

5-year period can't be extended for more 

than 10 years.

Example. Tamara buys a house in 

Virginia in 2011 that she uses as her 

main home for 3 years. For 8 years, 

from 2014 through 2022, Tamara serves 

on qualified official extended duty as a 

member of the uniformed services in 

Kuwait. In 2023, Tamara sells the house. 

Tamara didn't use the house as her main 

home for at least 2 of the 5 years before 

the sale. To meet Test 1, Tamara elects to 

suspend the 5-year test period during her 

8-year period of uniformed service in 

Kuwait. Because that 8-year period 

won't be counted in determining if she 

used the house as her main home for 2 

of the 5 years before the sale, she meets 

the ownership and use requirements of 

Test 1.

Qualified extended duty. You are on 

qualified extended duty if:

• You are called or ordered to active 

duty for an indefinite period or for a period of more than 90 days; and

• You are serving at a duty station at 

least 50 miles from your main home, or 

you are living in government quarters 

under government orders.

Sale of home acquired in a like-kind 

exchange. You can't exclude any gain 

if:

• You acquired your home in a 

like-kind exchange in which all or part 

of the gain wasn't recognized, and

• You sold or exchanged the home 

during the 5-year period beginning on 

the date you acquired it.

How to report the sale of your main 

home. If you have to report the sale or 

exchange, report it on Form 8949. If the 

gain or loss is short term, report it in 

Part I of Form 8949 with box C 

checked. If the gain or loss is long term, 

report it in Part II of Form 8949 with 

box F checked.

If you had a gain and can exclude 

part or all of it, enter “H” in column (f) 

of Form 8949. Enter the exclusion as a 

negative number (in parentheses) in column (g) of Form 8949. See the instructions for Form 8949, columns (f), (g), 

and (h). Complete all columns.

If you had a loss but have to report 

the sale or exchange because you got a 

Form 1099-S, see Nondeductible Losses, 

later, for instructions about how to report it.

More information. See Pub. 523 for 

additional details, including how to figure and report any taxable gain if:

• You (or your spouse if married) 

used any part of the home for business 

or rental purposes after May 6, 1997; or

• There was a period of time after 

2008 when the home wasn't your main 

home.

Partnership Interests

A sale or other disposition of an interest 

in a partnership may result in ordinary 

income, collectibles gain (28% rate 

gain), or unrecaptured section 1250 

gain. For details on 28% rate gain, see 

the instructions for line 18. For details 

on unrecaptured section 1250 gain, see 

the instructions for line 19.

Capital Assets Held for 

Personal Use

Generally, gain from the sale or exchange of a capital asset held for personal use is a capital gain. Report it on 

Form 8949 with box C checked (if the 

transaction is short term) or box F 

checked (if the transaction is long term). 

However, if you converted depreciable 

property to personal use, all or part of 

the gain on the sale or exchange of that 

property may have to be recaptured as 

ordinary income. Use Part III of Form 

4797 to figure the amount of ordinary 

income recapture. The recapture amount 

is included on line 31 (and line 13) of 

Form 4797. Don't enter any gain from 

this property on line 32 of Form 4797. If 

you aren't completing Part III for any 

other properties, enter “N/A” on line 32. 

If the total gain is more than the recapture amount, enter “From Form 4797” in 

column (a) of Part I of Form 8949 (if the 

transaction is short term) or Part II of 

Form 8949 (if the transaction is long 

term), and skip columns (b) and (c). In 

column (d) of Form 8949, enter the excess of the total gain over the recapture 

amount. Leave columns (e) through (g) 

blank. Complete column (h). Be sure to 

check box C at the top of Part I or box F 

at the top of Part II of this Form 8949 

(depending on how long you held the asset).

Loss from the sale or exchange of a 

capital asset held for personal use isn't 

deductible. But if you had a loss from 

the sale or exchange of real estate held 

for personal use for which you received 

D-3
a Form 1099-S, you must report the 

transaction on Form 8949 even though 

the loss isn't deductible. Also, if you had 

a loss from the sale or exchange of personal property for which you received a 

Form 1099-K, you must report the transaction on Form 8949 or on Schedule 1 

(Form 1040) even though the loss isn’t 

deductible.

Example. You have a loss on the 

sale of a vacation home that isn't your 

main home and you received a Form 

1099-S for the transaction. Report the 

transaction in Part I or Part II of Form 

8949, depending on how long you 

owned the home. Complete all columns. 

Because the loss isn't deductible, enter 

“L” in column (f). Enter the difference 

between column (d) and column (e) as a 

positive amount in column (g). Then 

complete column (h). (For example, if 

you entered $5,000 in column (d) and 

$6,000 in column (e), enter $1,000 in 

column (g). Then enter -0- ($5,000 − 

$6,000 + $1,000) in column (h). Be sure 

to check box C at the top of Part I or box 

F at the top of Part II of this Form 8949 

(depending on how long you owned the 

home).)

Capital Losses

You can deduct capital losses up to the 

amount of your capital gains plus $3,000 

($1,500 if married filing separately). 

You may be able to use capital losses 

that exceed this limit in future years. For 

details, see the instructions for line 21. 

Be sure to report all of your capital gains 

and losses even if you can't use all of 

your losses in 2023.

Certain Nondeductible 

Losses

You can’t deduct a loss from a sale or 

exchange between certain related parties. This includes a direct or indirect 

sale or exchange of property between 

any of the following.

• Members of a family.

• A corporation and an individual 

who directly (or indirectly) owns more 

than 50% of the corporation's stock (unless the loss is from a distribution in 

complete liquidation of a corporation).

• A grantor and a fiduciary of a 

trust.

• A fiduciary and a beneficiary of 

the same trust.

• A fiduciary of a trust and a fiduciary (or beneficiary) of another trust if 

both trusts were created by the same 

grantor.

• An executor of an estate and a beneficiary of that estate, unless the sale or 

exchange was to satisfy a pecuniary bequest (that is, a bequest of a sum of 

money).

• An individual and a tax-exempt organization controlled directly (or indirectly) by the individual or the individual's family.

See Pub. 544 for more details on 

sales and exchanges between related 

parties.

Report a transaction that results in a 

nondeductible loss in Part I or Part II of 

Form 8949 (depending on how long you 

held the property). Unless you received 

a Form 1099-B for the sale or exchange, 

check box C at the top of Part I or box F 

at the top of Part II of this Form 8949 

(depending on how long you owned the 

property). Complete all columns. Because the loss isn't deductible, enter “L” 

in column (f). Enter the amount of the 

nondeductible loss as a positive number 

in column (g). Complete column (h). 

See the instructions for Form 8949, columns (f), (g), and (h).

Example 1. You sold land you held 

as an investment for 5 years to your 

brother for $10,000. Your basis was 

$15,000. On Part II of Form 8949, check 

box F at the top. Enter $10,000 on Form 

8949, Part II, column (d). Enter $15,000 

in column (e). Because the loss isn't deductible, enter “L” in column (f) and 

$5,000 (the difference between $10,000 

and $15,000) in column (g). In column 

(h), enter -0- ($10,000 − $15,000 + 

$5,000). If this is your only transaction 

on this Form 8949, enter $10,000 on 

Schedule D, line 10, column (d). Enter 

$15,000 in column (e) and $5,000 in 

column (g). In column (h), enter -0- 

($10,000 − $15,000 + $5,000).

Example 2. You received a Form 

1099-B showing proceeds (sales price) 

of $1,000 and basis of $5,000. Box 7 on 

Form 1099-B is checked, indicating that 

your loss of $4,000 ($1,000 − $5,000) 

isn't allowed. On the top of Form 8949, 

check box A or box B in Part I or box D 

or box E in Part II (whichever applies). 

Enter $1,000 in column (d) and $5,000 

in column (e). Because the loss isn't deductible, enter “L” in column (f) and 

$4,000 (the difference between $1,000 

and $5,000) in column (g). In column 

(h), enter -0- ($1,000 − $5,000 + 

$4,000).

At-risk rules. If you disposed of (a) an 

asset used in an activity to which the 

at-risk rules apply, or (b) any part of 

your interest in an activity to which the 

at-risk rules apply, and you have 

amounts in the activity for which you 

aren't at risk, see the Instructions for 

Form 6198.

Passive activity rules. If the loss is allowable under the at-risk rules, it may be 

subject to the passive activity rules. See 

Form 8582 and its instructions for details on reporting capital gains and losses from a passive activity.

Items for Special Treatment

• Transactions by a securities dealer. 

See section 475 and Rev. Rul. 97-39, 

which begins on page 4 of Internal Revenue Bulletin 1997-39 at IRS.gov/pub/

irs-irbs/irb97-39.pdf.

• Bonds and other debt instruments. 

See Pub. 550.

• Certain real estate subdivided for 

sale that may be considered a capital asset. See section 1237.

• Gain on the sale of depreciable 

property to a more-than-50%-owned entity or to a trust of which you are a beneficiary. See Pub. 544.

• Gain on the disposition of stock in 

domestic international sales corporations. See section 995(c).

• Gain on the sale or exchange of 

stock in certain foreign corporations. 

See section 1248.

• Transfer of property to a partnership that would be treated as an investment company if it were incorporated. 

See Pub. 541.

• Sales of stock received under a 

qualified public utility dividend reinvestment plan. See Pub. 550.

• Transfer of appreciated property to 

a political organization. See section 84.

• Transfer of property by a U.S. person to a foreign estate or trust. See section 684.

• If you give up your U.S. citizenship, you may be treated as having sold 

all your property for its fair market value on the day before you gave up your 

citizenship. This also applies to 

long-term U.S. residents who cease to be 

D-4
lawful permanent residents. For details, 

exceptions, and rules for reporting these 

deemed sales, see Pub. 519 and Form 

8854.

• In general, no gain or loss is recognized on the transfer of property from an 

individual to a spouse or a former 

spouse if the transfer is incident to a divorce. See Pub. 504.

• Amounts received on the retirement of a debt instrument are generally 

treated as received in exchange for the 

debt instrument. See Pub. 550.

• Any loss on the disposition of converted wetland or highly erodible cropland that is first used for farming after 

March 1, 1986, is reported as a 

long-term capital loss on Form 8949, but 

any gain is reported as ordinary income 

on Form 4797.

• If qualified dividends that you reported on Form 1040, 1040-SR, or 

1040-NR, line 3a, include extraordinary 

dividends, any loss on the sale or exchange of the stock is a long-term capital loss to the extent of the extraordinary 

dividends. An extraordinary dividend is 

a dividend that equals or exceeds 10% 

(5% in the case of preferred stock) of 

your basis in the stock.

• Amounts received by shareholders 

in corporate liquidations. See Pub. 550.

• Cash received in lieu of fractional 

shares of stock as a result of a stock split 

or stock dividend. See Pub. 550.

• Load charges to acquire stock in a 

regulated investment company (including a mutual fund), which may not be 

taken into account in determining gain 

or loss on certain dispositions of the 

stock if reinvestment rights were exercised. See Pub. 550.

• The sale or exchange of S corporation stock or an interest in a partnership 

or trust held for more than 1 year, which 

may result in collectibles gain (28% rate 

gain). See the instructions for line 18.

• Gain or loss on the disposition of 

securities futures contracts. See Pub. 

550.

• Gain on the constructive sale of 

certain appreciated financial positions. 

See Pub. 550.

• Certain constructive ownership 

transactions. Gain in excess of the gain 

you would have recognized if you had 

held a financial asset directly during the 

term of a derivative contract must be 

treated as ordinary income. See section 

1260. If any portion of the constructive 

ownership transaction was open in any 

prior year, you may have to pay interest. 

See section 1260(b) for details, including how to figure the interest. Include 

the interest as an additional tax on 

Schedule 2 (Form 1040), line 17z. In the 

space provided, enter “Section 1260(b) 

interest” and the amount of the interest. 

This interest isn't deductible.

• Gain or loss from the disposition 

of stock or other securities in an investment club. See Pub. 550.

• Certain virtual currencies, such as 

Bitcoin. See the Instructions for Form 

1040 and IRS.gov/VirtualCurrencyFAQs.

• If you are deferring eligible gain 

by investing in a QOF, report the gain on 

the form on which you normally report 

the gain and report the deferral on Form 

8949. See How To Report an Election to 

Defer Tax on Eligible Gain Invested in a 

QOF in the Form 8949 instructions.

Market Discount Bonds

In general, a capital gain from the disposition of a market discount bond is treated as interest income to the extent of 

accrued market discount as of the date 

of disposition. See sections 1276 

through 1278 and Pub. 550 for more information on market discount. See the 

Instructions for Form 8949 for detailed 

information about how to report the disposition of a market discount bond.

Contingent Payment Debt 

Instruments

Any gain recognized on the sale, exchange, or retirement of a taxable contingent payment debt instrument subject 

to the noncontingent bond method is 

treated as interest income rather than as 

capital gain, even if you hold the debt 

instrument as a capital asset. If you sell 

a taxable contingent payment debt instrument subject to the noncontingent 

bond method at a loss, your loss is an ordinary loss to the extent of your prior 

original issue discount (OID) inclusions 

on the debt instrument. If the debt instrument is a capital asset, treat any loss 

that is more than your prior OID inclusions as a capital loss. See Regulations 

section 1.1275-4(b) for exceptions to 

these rules.

If you received a Form 1099-B (or 

substitute statement) reporting the sale 

of a taxable contingent payment debt instrument subject to the noncontingent 

bond method and the Ordinary box in 

box 2 is checked, an adjustment may be 

required. Report the transaction on Form 

8949 and complete the form’s Worksheet for Contingent Payment Debt Instrument Adjustment in Column (g) to 

figure the adjustment to enter in column 

(g) of Form 8949.

See Pub. 550 or Pub. 1212 for more 

details on any special rules or adjustments that might apply.

Wash Sales

A wash sale occurs when you sell or 

otherwise dispose of stock or securities 

(including a contract or option to acquire 

or sell stock or securities) at a loss and, 

within 30 days before or after the sale or 

disposition, you:

1. Buy substantially identical stock 

or securities,

2. Acquire substantially identical 

stock or securities in a fully taxable 

trade,

3. Enter into a contract or option to 

acquire substantially identical stock or 

securities, or

4. Acquire substantially identical 

stock or securities for your individual retirement arrangement (IRA) or Roth 

IRA.

You can't deduct losses from wash 

sales unless the loss was incurred in the 

ordinary course of your business as a 

dealer in stock or securities. The basis of 

the substantially identical property (or 

contract or option to acquire such property) is its cost increased by the disallowed loss (except in the case of (4) earlier).

These wash sale rules don't apply to a 

redemption of shares in a floating-NAV 

(net asset value) money market fund.

If you received a Form 1099-B (or 

substitute statement), box 1g of that 

form will generally show whether there 

was any nondeductible wash sale loss 

and its amount if:

• The stock or securities sold were 

covered securities (defined in the instructions for Form 8949, column (e)), 

and

• The substantially identical stock or 

securities you bought had the same CUSIP number as the stock or securities 

you sold and were bought in the same 

account as the stock or securities you 

D-5
sold. (CUSIP numbers are security identification numbers.)

However, you can't deduct a loss from a 

wash sale even if it isn't reported on 

Form 1099-B (or substitute statement). 

For more details on wash sales, see Pub. 

550.

Report a wash sale transaction in Part 

I or Part II (depending on how long you 

owned the stock or securities) of Form 

8949 with the appropriate box checked. 

Complete all columns. Enter “W” in column (f). Enter as a positive number in 

column (g) the amount of the loss not allowed. See the instructions for Form 

8949, columns (f), (g), and (h).

Traders in Securities

You are a trader in securities if you are 

engaged in the business of buying and 

selling securities for your own account. 

To be engaged in business as a trader in 

securities, all of the following statements must be true.

• You must seek to profit from daily 

market movements in the prices of securities and not from dividends, interest, 

or capital appreciation.

• Your activity must be substantial.

• You must carry on the activity with 

continuity and regularity.

The following facts and circumstances should be considered in determining 

if your activity is a business.

• Typical holding periods for securities bought and sold.

• The frequency and dollar amounts 

of your trades during the year.

• The extent to which you pursue the 

activity to produce income for a livelihood.

• The amount of time you devote to 

the activity.

You are considered an investor, and 

not a trader, if your activity doesn't meet 

the above definition of a business. It 

doesn't matter whether you call yourself 

a trader or a “day trader.”

Like an investor, a trader must generally report each sale of securities (taking 

into account commissions and any other 

costs of acquiring or disposing of the securities) on Form 8949 unless one of the 

exceptions described in the Instructions 

for Form 8949 applies. However, if a 

trader previously made the mark-to-market election (explained below), each 

transaction is reported in Part II of Form 

4797 instead of on Form 8949. Regardless of whether a trader reports his or her 

gains and losses on Form 8949 or Form 

4797, the gain or loss from the disposition of securities isn't taken into account 

when figuring net earnings from 

self-employment on Schedule SE. See 

the Instructions for Schedule SE for an 

exception that applies to section 1256 

contracts.

The limitation on investment interest 

expense that applies to investors doesn't 

apply to interest paid or incurred in a 

trading business. A trader reports interest expense and other expenses (excluding commissions and other costs of acquiring or disposing of securities) from a 

trading business on Schedule C (instead 

of Schedule A).

A trader may also hold securities for 

investment. The rules for investors will 

generally apply to those securities. Allocate interest and other expenses between 

your trading business and your investment securities.

Mark-to-Market Election for 

Traders

A trader may make an election under 

section 475(f) to report all gains and losses from securities held in connection 

with a trading business as ordinary income (or loss), including those from securities held at the end of the year. Securities held at the end of the year are 

“marked to market” by treating them as 

if they were sold for fair market value 

on the last business day of the year. 

Generally, the election must be made by 

the due date (not including extensions) 

of the tax return for the year prior to the 

year for which the election becomes effective. To be effective for 2023, the 

election must have been made by the 

due date of your 2022 return (not counting extensions).

Starting with the year the election becomes effective, a trader reports all 

gains and losses from securities held in 

connection with the trading business, including securities held at the end of the 

year, in Part II of Form 4797. If you previously made the election, see the Instructions for Form 4797. For details on 

making the mark-to-market election for 

2023, see Pub. 550 or Rev. Proc. 99-17, 

which starts on the bottom of page 52 of 

Internal Revenue Bulletin 1999-7 at 

IRS.gov/pub/irs-irbs/irb99-07.pdf.

If you hold securities for investment, 

you must identify them as such in your 

records on the day you acquired them 

(for example, by holding the securities 

in a separate brokerage account). Securities that you hold for investment aren't 

marked to market.

Short Sales

A short sale is a contract to sell property 

you borrowed for delivery to a buyer. At 

a later date, you either buy substantially 

identical property and deliver it to the 

lender or deliver property that you held 

but didn't want to transfer at the time of 

the sale.

Example. You think the value of 

XYZ stock will drop. You borrow 10 

shares from your broker and sell them 

for $100. This is a short sale. You later 

buy 10 shares for $80 and deliver them 

to your broker to close the short sale. 

Your gain is $20 ($100 − $80).

Holding period. Usually, your holding 

period is the amount of time you actually held the property eventually delivered 

to the broker or lender to close the short 

sale. However, your gain when closing a 

short sale is short term if you (a) held 

substantially identical property for 1 

year or less on the date of the short sale, 

or (b) acquired property substantially 

identical to the property sold short after 

the short sale but on or before the date 

you close the short sale. If you held substantially identical property for more 

than 1 year on the date of a short sale, 

any loss realized on the short sale is a 

long-term capital loss, even if the property used to close the short sale was held 

1 year or less.

Reporting a short sale. Report any 

short sale on Form 8949 in the year it 

closes.

If a short sale closed in 2023 but you 

didn't get a 2023 Form 1099-B (or substitute statement) for it because you entered into it before 2011, report it on 

Form 8949 in Part I with box C checked 

or Part II with box F checked (whichever applies). In column (a), enter (for example) “100 sh. XYZ Co.—2010 short 

sale closed.” Fill in the other columns 

according to their instructions. Report 

the short sale the same way if you received a 2023 Form 1099-B (or substiD-6
tute statement) that doesn't show proceeds (sales price).

Gain or Loss From Options

Report on Form 8949 gain or loss from 

the closing or expiration of an option 

that isn't a section 1256 contract but is a 

capital asset in your hands. If an option 

you purchased expired, enter the expiration date in column (c) and enter “EXPIRED” in column (d). If an option that 

was granted (written) expired, enter the 

expiration date in column (b) and enter 

“EXPIRED” in column (e). Fill in the 

other columns according to their instructions. See Pub. 550 for details.

If a call option you sold after 2013 

was exercised, the option premium you 

received will be reflected in the proceeds shown in box 1d of the Form 

1099-B (or substitute statement) you received. If you sold the call option before 

2014, the option premium you received 

may not be reflected on Form 1099-B. If 

it isn't, enter the premium as a positive 

number in column (g) of Form 8949. 

Enter “E” in column (f).

Example. For $10 in 2013, you sold 

Joe an option to buy one share of XYZ 

stock for $80. Joe later exercised the option. The Form 1099-B you get shows 

the proceeds to be $80. Enter $80 in column (d) of Form 8949. Enter “E” in column (f) and $10 in column (g). Complete the other columns according to the 

instructions.

NAV Method for Money 

Market Funds

If you have a capital gain or loss determined under the net asset value (NAV) 

method with respect to shares in an NAV 

money market fund, report the capital 

gain or loss on Form 8949, Part I, with 

box C checked. Enter the name of each 

fund followed by “(NAV)” in column 

(a). Enter the net gain or loss in column 

(h). Leave all other columns blank. See 

the Instructions for Form 8949.

Undistributed Capital Gains

Include on Schedule D, line 11, the 

amount from box 1a of Form 2439. This 

represents your share of the undistributed long-term capital gains of the regulated investment company (including a 

mutual fund) or real estate investment 

trust.

If there is an amount in box 1b of 

Form 2439, include that amount on 

line 11 of the Unrecaptured Section 

1250 Gain Worksheet if you complete 

line 19 of Schedule D.

If there is an amount in box 1c of 

Form 2439, see Exclusion of Gain on 

Qualified Small Business (QSB) Stock, 

later.

If there is an amount in box 1d of 

Form 2439, include that amount on 

line 4 of the 28% Rate Gain Worksheet 

if you complete line 18 of Schedule D.

Include on Schedule 3 (Form 1040), 

line 13a, the tax paid as shown in box 2 

of Form 2439. Add to the basis of your 

stock the excess of the amount included 

in income over the amount of the credit 

for the tax paid. See Pub. 550 for details.

Installment Sales

If you sold property (other than publicly 

traded stocks or securities) at a gain and 

you will receive a payment in a tax year 

after the year of sale, you must generally 

report the sale on the installment method 

unless you elect not to. Use Form 6252 

to report the sale on the installment 

method. Also, use Form 6252 to report 

any payment received in 2023 from a 

sale made in an earlier year that you reported on the installment method.

To elect out of the installment method, report the full amount of the gain on 

Form 8949 on a timely filed return (including extensions) for the year of the 

sale. If your original return was filed on 

time, you can make the election on an 

amended return filed no later than 6 

months after the due date of your return 

(excluding extensions). Enter “Filed pursuant to section 301.9100-2” at the top 

of the amended return.

Demutualization of Life 

Insurance Companies

Demutualization of a life insurance 

company occurs when a mutual life insurance company changes to a stock 

company. If you were a policyholder or 

annuitant of the mutual company, you 

may have received either stock in the 

stock company or cash in exchange for 

your equity interest in the mutual company.

If the demutualization transaction 

qualifies as a tax-free reorganization, no 

gain or loss is recognized on the exchange of your equity interest in the mutual company for stock. The company 

can advise you if the transaction is a 

tax-free reorganization. Your holding 

period for the new stock includes the period you held an equity interest in the 

mutual company. If you received cash in 

exchange for your equity interest, you 

must recognize any capital gain. If you 

held the equity interest for more than 1 

year, report the gain as a long-term capital gain in Part II of Form 8949. If you 

held the equity interest for 1 year or less, 

report the gain as a short-term capital 

gain in Part I of Form 8949. Be sure the 

appropriate box is checked at the top of 

Form 8949.

If the demutualization transaction 

doesn't qualify as a tax-free reorganization, you must recognize a capital gain 

or loss. If you held the equity interest for 

more than 1 year, report the gain or loss 

as a long-term capital gain or loss in Part 

II of Form 8949. If you held the equity 

interest for 1 year or less, report the gain 

or loss as a short-term capital gain or 

loss in Part I of Form 8949. Be sure the 

appropriate box is checked at the top of 

Form 8949. Your holding period for the 

new stock begins on the day after you 

received the stock.

Small Business (Section 

1244) Stock

Report an ordinary loss from the sale, 

exchange, or worthlessness of small 

business (section 1244) stock on Form 

4797. However, if the total loss is more 

than the maximum amount that can be 

treated as an ordinary loss for the year 

($50,000 or, on a joint return, $100,000), 

also report the transaction on Form 8949 

as follows.

1. In column (a), enter “Capital portion of section 1244 stock loss.”

2. Complete columns (b) and (c) as 

you normally would.

3. In column (d), enter the entire 

sales price of the stock sold.

4. In column (e), enter the entire basis of the stock sold.

5. Enter “S” in column (f). See the 

instructions for Form 8949, columns (f), 

(g), and (h).

6. In column (g), enter the loss you 

claimed on Form 4797 for this transaction. Enter it as a positive number.

D-7
7. Complete column (h) according 

to its instructions.

Report the transaction in Part I or 

Part II of Form 8949 (depending on how 

long you held the stock) with the appropriate box checked.

Example. You sold section 1244 

stock for $1,000. Your basis was 

$60,000. You had held the stock for 3 

years. You can claim $50,000 of your 

loss as an ordinary loss on Form 4797. 

To claim the rest of the loss on Form 

8949, check the appropriate box at the 

top. Enter $1,000 on Form 8949, Part II, 

column (d). Enter $60,000 in column 

(e). Enter “S” in column (f) and $50,000 

(the ordinary loss claimed on Form 

4797) in column (g). In column (h), enter ($9,000) ($1,000 − $60,000 + 

$50,000). Put it in parentheses to show it 

is a negative amount.

Exclusion of Gain on 

Qualified Small Business 

(QSB) Stock

Section 1202 allows you to exclude a 

portion of the eligible gain on the sale or 

exchange of QSB stock. The section 

1202 exclusion applies only to QSB 

stock held for more than 5 years. If you 

acquired the QSB stock on or before 

February 17, 2009, you can exclude up 

to 50% of the qualified gain. However, 

you can exclude up to 60% of the qualified gain on certain empowerment zone 

business stock for gain attributable to 

periods on or before December 31, 

2018. The 60% exclusion doesn’t apply 

to gain attributable to periods after December 31, 2018. See Empowerment 

Zone Business Stock, later.

If you acquired the QSB stock after 

February 17, 2009, and before September 28, 2010, you can exclude up to 75% 

of the qualified gain.

If you acquired the QSB stock after 

September 27, 2010, you can exclude up 

to 100% of the qualified gain.

To be QSB stock, the stock must 

meet all of the following tests.

1. It must be stock in a C corporation (that is, not S corporation stock).

2. It must have been originally issued after August 10, 1993.

3. As of the date the stock was issued, the corporation was a domestic C 

corporation with total gross assets of 

$50 million or less (a) at all times after 

August 9, 1993, and before the stock 

was issued; and (b) immediately after 

the stock was issued. Gross assets include those of any predecessor of the 

corporation. All corporations that are 

members of the same parent-subsidiary 

controlled group are treated as one corporation.

4. You must have acquired the stock 

at its original issue (either directly or 

through an underwriter), either in exchange for money or other property 

(other than stock) or as pay for services 

(other than as an underwriter) to the corporation. In certain cases, you may meet 

this test if you acquired the stock from 

another person who met the test (such as 

by gift or inheritance) or through a conversion or exchange of QSB stock you 

held.

5. During substantially all the time 

you held the stock:

a. The corporation was a C corporation;

b. At least 80% of the value of the 

corporation's assets were used in the active conduct of one or more qualified 

businesses (defined next); and

c. The corporation wasn't a foreign 

corporation, DISC, former DISC, regulated investment company, real estate investment trust, REMIC, FASIT, or cooperative, or a corporation that has made 

(or that has a subsidiary that has made) a 

section 936 election.

SSBIC. A specialized small 

business investment company 

(SSBIC) is treated as having 

met test 5b.

Definition of qualified business. A 

qualified business is any business that 

isn't one of the following.

• A business involving services performed in the field of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, 

athletics, financial services, or brokerage 

services.

• A business whose principal asset is 

the reputation or skill of one or more 

employees.

• A banking, insurance, financing, 

leasing, investing, or similar business.

• A farming business (including the 

raising or harvesting of trees).

TIP

• A business involving the production of products for which percentage 

depletion can be claimed.

• A business of operating a hotel, 

motel, restaurant, or similar business.

For more details about limits and additional requirements that may apply, 

see Pub. 550 or section 1202.

Acquisition date of stock acquired after February 17, 2009. When you are 

determining whether your exclusion is 

limited to 50%, 75%, or 100% of the 

gain from QSB stock, your acquisition 

date is considered to be the first day you 

held the stock (determined after applying the holding period rules in section 

1223).

Empowerment Zone Business 

Stock

You can generally exclude up to 60% of 

your gain from the sale or exchange of 

QSB stock held for more than 5 years if 

you meet the following additional requirements.

1. The stock you sold or exchanged 

was stock in a corporation that qualified 

as an empowerment zone business during substantially all of the time you held 

the stock.

2. You acquired the stock after December 21, 2000, and before February 

18, 2009.

3. The gain from the sale or exchange of the stock is attributable to periods on or before December 31, 2018.

Requirement 1 will still be met if the 

corporation ceased to qualify after the 

5-year period that began on the date you 

acquired the stock. However, the gain 

that qualifies for the 60% exclusion can't 

be more than the gain you would have 

had if you had sold the stock on the date 

the corporation ceased to qualify.

Stock acquired after February 17, 

2009. You can exclude up to 75% of 

your gain if you acquired the stock after 

February 17, 2009, and before September 28, 2010.

You can exclude up to 100% of your 

gain if you acquired the stock after September 27, 2010.

More information. For more information about empowerment zone businesses, see section 1397C.

D-8
Pass-Through Entities

If you held an interest in a pass-through 

entity (a partnership, S corporation, 

common trust fund, or mutual fund or 

other regulated investment company) 

that sold QSB stock, to qualify for the 

exclusion you must have held the interest on the date the pass-through entity 

acquired the QSB stock and at all times 

thereafter until the stock was sold.

How To Report

Report the sale or exchange of the QSB 

stock on Form 8949, Part II, with the appropriate box checked, as you would if 

you weren't taking the exclusion. Then 

enter “Q” in column (f) and enter the 

amount of the excluded gain as a negative number in column (g). Put it in parentheses to show it is negative. See the 

instructions for Form 8949, columns (f), 

(g), and (h). Complete all remaining columns. If you are completing line 18 of 

Schedule D, enter as a positive number 

the amount of your allowable exclusion 

on line 2 of the 28% Rate Gain Worksheet; if you excluded 60% of the gain, 

enter 2/3 of the exclusion; if you excluded 75% of the gain, enter 1/3 of the exclusion; if you excluded 100% of the 

gain, don't enter an amount.

Gain from Form 1099-DIV. If you received a Form 1099-DIV with a gain in 

box 2c, part or all of that gain (which is 

also included in box 2a) may be eligible 

for the section 1202 exclusion. Report 

the total gain (box 2a) on Schedule D, 

line 13. In column (a) of Form 8949, 

Part II, enter the name of the corporation 

whose stock was sold. In column (f), enter “Q,” and in column (g), enter the 

amount of the excluded gain as a negative number. See the instructions for 

Form 8949, columns (f), (g), and (h). If 

you are completing line 18 of Schedule D, enter as a positive number the 

amount of your allowable exclusion on 

line 2 of the 28% Rate Gain Worksheet; 

if you excluded 60% of the gain, enter 

2/3 of the exclusion; if you excluded 

75% of the gain, enter 1/3 of the exclusion; if you excluded 100% of the gain, 

don't enter an amount.

Gain from Form 2439. If you received 

a Form 2439 with a gain in box 1c, part 

or all of that gain (which is also included 

in box 1a) may be eligible for the section 1202 exclusion. Report the total 

gain (box 1a) on Schedule D, line 11. In 

column (a) of Form 8949, Part II, enter 

the name of the corporation whose stock 

was sold. In column (f), enter “Q,” and 

in column (g), enter the amount of the 

excluded gain as a negative number. See 

the instructions for Form 8949, columns 

(f), (g), and (h). If you are completing 

line 18 of Schedule D, enter as a positive number the amount of your allowable exclusion on line 2 of the 28% Rate 

Gain Worksheet; if you excluded 60% of 

the gain, enter 2/3 of the exclusion; if 

you excluded 75% of the gain, enter 1/3 

of the exclusion; if you excluded 100% 

of the gain, don't enter an amount.

Gain from an installment sale of QSB 

stock. If all payments aren't received in 

the year of sale, a sale of QSB stock that 

isn't traded on an established securities 

market is generally treated as an installment sale and is reported on Form 6252. 

Report the long-term gain from Form 

6252 on Schedule D, line 11. Figure the 

allowable section 1202 exclusion for the 

year by multiplying the total amount of 

the exclusion by a fraction, the numerator of which is the amount of eligible 

gain to be recognized for the tax year 

and the denominator of which is the total amount of eligible gain. In column 

(a) of Form 8949, Part II, enter the name 

of the corporation whose stock was sold. 

In column (f), enter “Q,” and in column 

(g), enter the amount of the allowable 

exclusion for the year as a negative 

number. See the instructions for Form 

8949, columns (f), (g), and (h). If you 

are completing line 18 of Schedule D, 

enter as a positive number the amount of 

your allowable exclusion for the year on 

line 2 of the 28% Rate Gain Worksheet; 

if you excluded 60% of the gain, enter 

2/3 of the allowable exclusion for the 

year; if you excluded 75% of the gain, 

enter 1/3 of the allowable exclusion for 

the year; if you excluded 100% of the 

gain, don't enter an amount.

Alternative minimum tax. If you qualify for the 50%, 60%, or 75% exclusion, 

enter 7% of your allowable exclusion for 

the year on line 13 of Form 6251. If you 

qualify for the 100% exclusion, leave 

line 13 of Form 6251 blank.

Rollover of Gain From QSB 

Stock

If you sold QSB stock (defined earlier) 

that you held for more than 6 months, 

you can elect to postpone gain if you 

buy other QSB stock during the 60-day 

period that began on the date of the sale. 

A pass-through entity can also make the 

election to postpone gain. The benefit of 

the postponed gain applies to your share 

of the entity's postponed gain if you held 

an interest in the entity for the entire period the entity held the QSB stock. If a 

pass-through entity sold QSB stock held 

for more than 6 months and you held an 

interest in the entity for the entire period 

the entity held the stock, you can also 

elect to postpone gain if you, rather than 

the pass-through entity, buy the replacement QSB stock within the 60-day period. If you were a partner in a partnership 

that sold or bought QSB stock, see 

box 11 of the Schedule K-1 (Form 1065) 

sent to you by the partnership; also, see 

Regulations section 1.1045-1.

You must recognize gain to the extent 

the sale proceeds are more than the cost 

of the replacement stock. Reduce the basis of the replacement stock by any postponed gain.

You must make the election no later 

than the due date (including extensions) 

for filing your tax return for the tax year 

in which the QSB stock was sold. If 

your original return was filed on time, 

you can make the election on an amended return filed no later than 6 months 

after the due date of your return (excluding extensions). Enter “Filed pursuant to 

section 301.9100-2” at the top of the 

amended return.

To make the election, report the sale 

in Part I or Part II (depending on how 

long you, or the pass-through entity, if 

applicable, owned the stock) of Form 

8949 as you would if you weren't making the election. Then enter “R” in column (f). Enter the amount of the postponed gain as a negative number in column (g). Put it in parentheses to show it 

is negative. See the instructions for 

Form 8949, columns (f), (g), and (h). 

Complete all remaining columns.

Exclusion of Gain From DC 

Zone Assets

If you sold or exchanged a District of 

Columbia Enterprise Zone (DC Zone) 

asset that you acquired after 1997 and 

before 2012 and held for more than 5 

years, you may be able to exclude the 

amount of qualified capital gain that you 

D-9
would otherwise include in income. The 

exclusion applies to an interest in, or 

property of, certain businesses operating 

in the District of Columbia.

DC Zone asset. A DC Zone asset is any 

of the following.

• DC Zone business stock.

• DC Zone partnership interest.

• DC Zone business property.

Qualified capital gain. Qualified capital gain is any gain recognized on the 

sale or exchange of a DC Zone asset that 

is a capital asset or property used in a 

trade or business. It doesn't include any 

of the following gains.

• Gain attributable to periods after 

December 31, 2016.

• Gain treated as ordinary income 

under section 1245.

• Section 1250 gain figured as if 

section 1250 applied to all depreciation 

rather than the additional depreciation.

• Gain attributable to real property, 

or an intangible asset, that isn't an integral part of a DC Zone business.

• Gain from a related-party transaction. See Sales and Exchanges Between 

Related Persons in chapter 2 of Pub. 

544.

How to report. Report the sale or exchange of DC Zone business stock or a 

DC Zone partnership interest on Form 

8949, Part II, as you would if you 

weren't taking the exclusion. Then enter 

“X” in column (f). Enter the amount of 

the exclusion as a negative number in 

column (g). Put it in parentheses to show 

it is negative. See the instructions for 

Form 8949, columns (f), (g), and (h). 

Complete all remaining columns.

Report the sale or exchange of DC 

Zone business property on Form 4797. 

See the Form 4797 instructions for details.

Exclusion of Gain From 

Qualified Community Assets

If you sold or exchanged a qualified 

community asset that you acquired after 

2001 and before 2010 and held for more 

than 5 years, you may be able to exclude 

the qualified capital gain that you would 

otherwise include in income. The exclusion applies to an interest in, or property 

of, certain renewal community businesses.

Qualified community asset. A qualified community asset is any of the following.

• Qualified community stock.

• Qualified community partnership

interest.

• Qualified community business 

property.

Qualified capital gain. Qualified capital gain is any gain recognized on the 

sale or exchange of a qualified community asset but doesn't include any of the 

following.

• Gain attributable to periods after 

December 31, 2014.

• Gain treated as ordinary income 

under section 1245.

• Section 1250 gain figured as if 

section 1250 applied to all depreciation 

rather than the additional depreciation.

• Gain attributable to real property, 

or an intangible asset, that isn't an integral part of a renewal community business.

• Gain from a related-party transaction. See Sales and Exchanges Between 

Related Persons in chapter 2 of Pub. 

544.

How to report. Report the sale or exchange of qualified community stock or 

a qualified community partnership interest on Form 8949, Part II, with the appropriate box checked, as you would if 

you weren't taking the exclusion. Then 

enter “X” in column (f) and enter the 

amount of the exclusion as a negative 

number in column (g). Put it in parentheses to show it is negative. See the instructions for Form 8949, columns (f), 

(g), and (h). Complete all remaining columns.

Report the sale or exchange of qualified community business property on 

Form 4797. See the Form 4797 instructions for details.

Deferral of Gain Invested in 

a QOF

If you have an eligible gain, you can invest that gain in a QOF and elect to defer part or all of the gain that you would 

otherwise include in income until you 

sell or exchange the investment in the 

QOF or December 31, 2026, whichever 

is earlier. If you make the election, you 

only include gain to the extent, if any, 

the amount of realized gain is more than 

the aggregate amount invested in a QOF 

during the 180-day period beginning on 

the date the gain was realized. You may 

also be able to permanently exclude the 

gain from the sale or exchange of any 

investment in a QOF if the investment is 

held for at least 10 years.

If you elect to defer tax on an 

eligible gain by investing in a 

QOF, you will need to complete 

a Form 8997 for each year you hold the 

investment and for the year you dispose 

of the investment. If you have held that 

investment for more than 5 years, see 

the instructions for Form 8997 for additional information regarding the basis of 

that investment.

QOF. A QOF is any investment vehicle 

that is organized as either a corporation 

or partnership for the purpose of investing in eligible property that is located in 

a qualified opportunity zone.

How to report. Report the eligible gain 

as you normally would on Schedule D. 

See the Form 8949 instructions for how 

to report the deferral. See the Form 8997 

instructions for additional reporting instructions.

Rollover of Gain From Stock 

Sold to ESOPs or Certain 

Cooperatives

You can postpone all or part of any gain 

from the sale of qualified securities, held 

for at least 3 years, to an employee stock 

ownership plan (ESOP) or eligible 

worker-owned cooperative, if you buy 

qualified replacement property. See Pub. 

550. Also, see the instructions for Form 

8949, columns (f), (g), and (h).

Specific 

Instructions

Rounding Off to Whole 

Dollars

You can round off cents to whole dollars 

on your Schedule D. If you do round to 

whole dollars, you must round all 

amounts. To round, drop amounts under 

50 cents and increase amounts from 50 

to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.

If you have to add two or more 

amounts to figure the amount to enter on 

CAUTION

!

D-10
a line, include cents when adding the 

amounts and round off only the total.

Disposal of QOF investment. If you 

disposed of any investment in a QOF 

during the tax year, check the box on 

page 1 of Schedule D and see the Instructions for Form 8949 for additional 

reporting requirements. You must also 

complete Part III of Form 8997. See the 

instructions for Form 8997 for details.

Lines 1a and 8a—

Transactions Not Reported 

on Form 8949

You can report on line 1a (for short-term 

transactions) or line 8a (for long-term 

transactions) the aggregate totals from 

any transactions (except sales of collectibles) for which:

• You received a Form 1099-B (or 

substitute statement) that shows basis 

was reported to the IRS and doesn't 

show any adjustments in box 1f or 1g;

• The Ordinary box in box 2 isn’t 

checked;

• The QOF box in box 3 isn’t 

checked;

• You aren’t electing to defer income 

due to an investment in a QOF and 

aren’t terminating deferral from an investment in a QOF; and

• You don't need to make any adjustments to the basis or type of gain or loss 

reported on Form 1099-B (or substitute 

statement), or to your gain or loss.

See How To Complete Form 8949, Columns (f) and (g) in the Form 8949 instructions for details about possible adjustments to your gain or loss.

If you choose to report these transactions on lines 1a and 8a, don't report 

them on Form 8949. You don't need to 

attach a statement to explain the entries 

on lines 1a and 8a and, if you e-file your 

return, you don't need to file Form 8453.

Figure gain or loss on each line. Subtract the cost or other basis in column (e) 

from the proceeds (sales price) in column (d). Enter the gain or loss in column (h). Enter negative amounts in parentheses.

Example 1—basis reported to the 

IRS. You received a Form 1099-B reporting the sale of stock you held for 3 

years. It shows proceeds (in box 1d) of 

$6,000 and cost or other basis (in 

box 1e) of $2,000. Box 3 is checked, 

meaning that basis was reported to the 

IRS. You don't need to make any adjustments to the amounts reported on Form 

1099-B or enter any codes. This was 

your only 2023 transaction. Instead of 

reporting this transaction on Form 8949, 

you can enter $6,000 on Schedule D, 

line 8a, column (d); $2,000 in column 

(e); and $4,000 ($6,000 − $2,000) in column (h).

If you had a second transaction that 

was the same except that the proceeds 

were $5,000 and the basis was $3,000, 

combine the two transactions. Enter 

Capital Loss Carryover Worksheet—Lines 6 and 14 Keep for Your Records

Use this worksheet to figure your capital loss carryovers from 2022 to 2023 if your 2022 Schedule D, line 21, is a loss and (a) that loss is a smaller loss 

than the loss on your 2022 Schedule D, line 16; or (b) if the amount on your 2022 Form 1040 or 1040-SR, line 15, (or your 2022 Form 1040-NR, 

line 15, if applicable) would be less than zero if you could enter a negative amount on that line. Otherwise, you don't have any carryovers. 

If you and your spouse once filed a joint return and are filing separate returns for 2023, any capital loss carryover from the joint return can be deducted 

only on the return of the spouse who actually had the loss.

If you excluded canceled debt from income in 2023, see Pub. 4681.

1. Enter the amount from your 2022 Form 1040 or 1040-SR, line 15; or your 2022 Form 1040-NR, line 15. If 

the amount would have been a loss if you could enter a negative number on that line, enclose the amount in 

parentheses ..................................................................... 1.

2. Enter the loss from your 2022 Schedule D, line 21, as a positive amount .......................... 2.

3. Combine lines 1 and 2. If zero or less, enter -0- ........................................... 3.

4. Enter the smaller of line 2 or line 3 ...................... 4.

If line 7 of your 2022 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9.

5. Enter the loss from your 2022 Schedule D, line 7, as a positive amount .......................... 5.

6. Enter any gain from your 2022 Schedule D, line 15. If a loss, 

enter -0- ......................................... 6.

7. Add lines 4 and 6 ................................................................. 7.

8. Short-term capital loss carryover for 2023. Subtract line 7 from line 5. If zero or less, enter -0-. If more 

than zero, also enter this amount on Schedule D, line 6 ...................................... 8.

If line 15 of your 2022 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13.

9. Enter the loss from your 2022 Schedule D, line 15, as a positive amount .......................... 9.

10. Enter any gain from your 2022 Schedule D, line 7. If a loss, 

enter -0- ......................................... 10.

11. Subtract line 5 from line 4. If zero or less, enter -0- ........... 11.

12. Add lines 10 and 11 ............................................................... 12.

13. Long-term capital loss carryover for 2023. Subtract line 12 from line 9. If zero or less, enter -0-. If more 

than zero, also enter this amount on Schedule D, line 14 ..................................... 13.

D-11
$11,000 ($6,000 + $5,000) on Schedule D, line 8a, column (d); $5,000 

($2,000 + $3,000) in column (e); and 

$6,000 ($11,000 − $5,000) in column 

(h).

Example 2—basis not reported to 

the IRS. You received a Form 1099-B 

showing proceeds (in box 1d) of $6,000 

and cost or other basis (in box 1e) of 

$2,000. Box 3 isn't checked, meaning 

that basis wasn't reported to the IRS. 

Don't report this transaction on line 1a 

or line 8a. Instead, report the transaction 

on Form 8949. Complete all necessary 

pages of Form 8949 before completing 

line 1b, 2, 3, 8b, 9, or 10 of Schedule D.

Example 3—adjustment. You received a Form 1099-B showing proceeds (in box 1d) of $6,000 and cost or 

other basis (in box 1e) of $2,000. Box 3 

is checked, meaning that basis was reported to the IRS. However, the basis 

shown in box 1e is incorrect. Don't report this transaction on line 1a or 

line 8a. Instead, report the transaction on 

Form 8949. See the instructions for 

Form 8949, columns (f), (g), and (h). 

Complete all necessary pages of Form 

8949 before completing line 1b, 2, 3, 8b, 

9, or 10 of Schedule D.

Lines 1b, 2, 3, 8b, 9, and 10, 

Column (h)—Transactions 

Reported on Form 8949

Figure gain or loss on each line. First, 

subtract the cost or other basis in column (e) from the proceeds (sales price) 

in column (d). Then combine the result 

with any adjustments in column (g). Enter the gain or loss in column (h). Enter 

negative amounts in parentheses.

Example 1—gain. Column (d) is 

$6,000 and column (e) is $2,000. Enter 

$4,000 in column (h).

Example 2—loss. Column (d) is 

$6,000 and column (e) is $8,000. Enter 

($2,000) in column (h).

Example 3—adjustment. Column 

(d) is $6,000, column (e) is $2,000, and 

column (g) is ($1,000). Enter $3,000 

($6,000 − $2,000 − $1,000) in column 

(h).

Line 13

See Capital Gain Distributions, earlier.

Line 18

If you checked “Yes” on line 17, complete the 28% Rate Gain Worksheet in 

these instructions if either of the following applies for 2023.

• You reported in Part II of Form 

8949 a section 1202 exclusion from the 

eligible gain on QSB stock (see Exclusion of Gain on Qualified Small Business (QSB) Stock, earlier).

• You reported in Part II of Form 

8949 a collectibles gain or (loss). A collectibles gain or (loss) is any long-term 

gain or deductible long-term loss from 

the sale or exchange of a collectible that 

is a capital asset.

Collectibles include works of art, 

rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, 

stamps, coins, alcoholic beverages, and 

certain other tangible property.

Include on the worksheet any gain 

(but not loss) from the sale or exchange 

of an interest in a partnership, S corporation, or trust held for more than 1 year 

and attributable to unrealized appreciation of collectibles. For details, see Regulations section 1.1(h)-1. Also, attach 

the statement required under Regulations section 1.1(h)-1(e).

Line 19

If you checked “Yes” on line 17, complete the Unrecaptured Section 1250 

Gain Worksheet in these instructions if 

any of the following apply for 2023.

• You sold or otherwise disposed of 

section 1250 property (generally, real 

property that you depreciated) held more 

than 1 year.

• You received installment payments 

for section 1250 property held more than 

28% Rate Gain Worksheet—Line 18 Keep for Your Records

1. Enter the total of all collectibles gain or (loss) from items you reported on Form 8949, Part II ....................... 1.

2. Enter as a positive number the total of:

• Any section 1202 exclusion you reported in column (g) of Form 8949, Part II, with 

code “Q” in column (f), that is 50% of the gain;

•

2/3 of any section 1202 exclusion you reported in column (g) of Form 8949, Part II, 

with code “Q” in column (f), that is 60% of the gain; and

•

1/3 of any section 1202 exclusion you reported in column (g) of Form 8949, Part II, 

with code “Q” in column (f), that is 75% of the gain.

Don’t make an entry for any section 1202 exclusion that is 100% of the gain.

...................... 2.

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.

.................... 4.

5. Enter your long-term capital loss carryovers from Schedule D, line 14; and Schedule K-1 (Form 1041), 

box 11, code D ............................................................................

5. ( )

6. If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter -0- .................................... 6. ( )

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.

D-12
1 year for which you are reporting gain 

on the installment method.

• You received a Schedule K-1 from 

an estate or trust, a partnership, or an S 

corporation that shows “unrecaptured 

section 1250 gain.”

• You received a Form 1099-DIV or 

Form 2439 from a real estate investment 

trust or regulated investment company 

(including a mutual fund) that reports 

“unrecaptured section 1250 gain.”

• You reported a long-term capital 

gain from the sale or exchange of an interest in a partnership that owned section 

1250 property.

Instructions for the Unrecaptured 

Section 1250 Gain Worksheet

Lines 1 through 3. If you had more 

than one property described on line 1, 

complete lines 1 through 3 for each 

property on a separate worksheet. Enter 

the total of the line 3 amounts for all 

properties on line 3 and go to line 4.

Line 4. To figure the amount to enter on 

line 4, follow the steps below for each 

installment sale of trade or business 

property held more than 1 year.

Step 1. Figure the smaller of (a) the 

depreciation allowed or allowable, or (b) 

the total gain for the sale. This is the 

smaller of line 22 or line 24 of your 

2023 Form 4797 (or the comparable 

lines of Form 4797 for the year of sale) 

for the property.

Step 2. Reduce the amount figured in 

Step 1 by any section 1250 ordinary income recapture for the sale. This is the 

amount from line 26g of your 2023 

Form 4797 (or the comparable line of 

Form 4797 for the year of sale) for the 

property. The result is your total unrecaptured section 1250 gain that must be 

allocated to the installment payments received from the sale.

Step 3. Generally, the entire amount 

of gain from the sale of trade or business 

property included in each installment 

payment is treated as unrecaptured section 1250 gain until the total unrecaptured section 1250 gain figured in Step 2 

has been used in full. Figure the amount 

of gain treated as unrecaptured section 

1250 gain for installment payments received in 2023 as the smaller of (a) the 

amount from line 26 or line 37 of your 

2023 Form 6252, whichever applies; or 

(b) the amount of unrecaptured section 

1250 gain remaining to be reported. This 

amount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years 

(excluding section 1250 ordinary income recapture). However, if you chose 

not to treat all of the gain from payments 

received after May 6, 1997, and before 

August 24, 1999, as unrecaptured section 1250 gain, use only the amount you 

chose to treat as unrecaptured section 

1250 gain for those payments to reduce 

the total unrecaptured section 1250 gain 

remaining to be reported for the sale. Include this amount on line 4.

D-13
Line 10. Include on line 10 your share 

of the partnership's unrecaptured section 

1250 gain that would result if the partnership had transferred all of its section 

1250 property in a fully taxable transaction immediately before you sold or exchanged your interest in that partnership. 

If you recognized less than all of the realized gain, the partnership will be treated as having transferred only a proportionate amount of each section 1250 

property. For details, see Regulations 

section 1.1(h)-1. Also, attach the statement required under Regulations

section 1.1(h)-1(e).

Line 12. An example of an amount to 

include on line 12 is unrecaptured section 1250 gain from the sale of a vacation home you previously used as a rental property but converted to personal use 

prior to the sale. To figure the amount to 

enter on line 12, follow the applicable 

instructions below.

Installment sales. To figure the 

amount to include on line 12, follow the 

steps below for each installment sale of 

property held more than 1 year for 

which you didn't make an entry in Part I 

of your Form 4797 for the year of sale.

• Step 1. Figure the smaller of (a) 

the depreciation allowed or allowable, or 

(b) the total gain for the sale. This is the 

smaller of line 22 or line 24 of your 

2023 Form 4797 (or the comparable 

lines of Form 4797 for the year of sale) 

for the property.

• Step 2. Reduce the amount figured 

in Step 1 by any section 1250 ordinary 

income recapture for the sale. This is the 

amount from line 26g of your 2023 

Form 4797 (or the comparable line of 

Form 4797 for the year of sale) for the 

property. The result is your total unrecaptured section 1250 gain that must be 

allocated to the installment payments received from the sale.

• Step 3. Generally, the amount of 

capital gain on each installment payment 

is treated as unrecaptured section 1250 

gain until the total unrecaptured section 

1250 gain figured in Step 2 has been 

used in full. Figure the amount of gain 

treated as unrecaptured section 1250 

gain for installment payments received 

in 2023 as the smaller of (a) the amount 

from line 26 or line 37 of your 2023 

Form 6252, whichever applies; or (b) 

the amount of unrecaptured section 1250 

gain remaining to be reported. This 

amount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years 

(excluding section 1250 ordinary income recapture). However, if you chose 

not to treat all of the gain from payments 

received after May 6, 1997, and before 

August 24, 1999, as unrecaptured section 1250 gain, use only the amount you 

chose to treat as unrecaptured section 

1250 gain for those payments to reduce 

the total unrecaptured section 1250 gain 

remaining to be reported for the sale. Include this amount on line 12.

Unrecaptured Section 1250 Gain Worksheet—Line 19 Keep for Your Records

If you aren't reporting a gain on Form 4797, line 7, skip lines 1 through 9 and go to line 10.

1. If you have a section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form 4797 (but 

not on Form 6252), enter the smaller of line 22 or line 24 of Form 4797 for that property. If you didn't have any such 

property, go to line 4. If you had more than one such property, see instructions ............................ 1.

2. Enter the amount from Form 4797, line 26g, for the property for which you made an entry on line 1 ............. 2.

3. Subtract line 2 from line 1 .................................................................. 3.

4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 from installment sales 

of trade or business property held more than 1 year. See instructions ................................... 4.

5. Enter the total of any amounts reported to you on a Schedule K-1 from a partnership or an S corporation as 

“unrecaptured section 1250 gain” ............................................................ 5.

6. Add lines 3 through 5 ..................................................................... 6.

7. Enter the smaller of line 6 or the gain from Form 4797, line 7 ..................... 7.

8. Enter the amount, if any, from Form 4797, line 8 .............................. 8.

9. Subtract line 8 from line 7. If zero or less, enter -0- ................................................ 9.

10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable to unrecaptured 

section 1250 gain. See instructions ........................................................... 10.

11. Enter the total of any amounts reported to you as “unrecaptured section 1250 gain” on a Schedule K-1, Form 

1099-DIV, or Form 2439 from an estate, a trust, a real estate investment trust, or a mutual fund (or other regulated 

investment company) or in connection with a Form 1099-R .......................................... 11.

12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or other dispositions of 

section 1250 property held more than 1 year for which you didn't make an entry in Part I of Form 4797 for the year of 

sale. See instructions ..................................................................... 12.

13. Add lines 9 through 12 .................................................................... 13.

14. If you had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1 

through 4 of the 28% Rate Gain Worksheet. Otherwise, enter -0- ................. 14.

15. Enter the (loss), if any, from Schedule D, line 7. If Schedule D, line 7, is zero or a gain, 

enter -0- ........................................................... 15. ( )

16. Enter your long-term capital loss carryovers from Schedule D, line 14; and Schedule K-1 

(Form 1041), box 11, code D* ............................................ 16. ( )

17. Combine lines 14 through 16. If the result is a (loss), enter it as a positive amount. If the result is zero or a gain, 

enter -0- .............................................................................. 17.

18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. If more than zero, enter the 

result here and on Schedule D, line 19 ......................................................... 18.

* If you are filing Form 2555 (relating to foreign earned income), see the footnote in the Foreign Earned Income Tax 

Worksheet in the Instructions for Form 1040 before completing this line.

D-14
Other sales or dispositions of section 

1250 property. For each sale of property held more than 1 year (for which you 

didn't make an entry in Part I of Form 

4797), figure the smaller of (a) the depreciation allowed or allowable, or (b) 

the total gain for the sale. This is the 

smaller of line 22 or line 24 of Form 

4797 for the property. Next, reduce that 

amount by any section 1250 ordinary income recapture for the sale. This is the 

amount from line 26g of Form 4797 for 

the property. The result is the total unrecaptured section 1250 gain for the 

sale. Include this amount on line 12.

Line 21

You have a capital loss carryover from 

2023 to 2024 if you have a loss on 

line 16 and either:

• That loss is more than the loss on 

line 2; or

• The amount on Form 1040 or 

1040-SR, line 15, (or Form 1040-NR, 

line 15, if applicable) would be less than 

zero if you could enter a negative 

amount on that line.

To figure any capital loss carryover 

to 2024, you will use the Capital Loss 

Carryover Worksheet in the 2024 Instructions for Schedule D. If you want to 

figure your carryover to 2024 now, see 

Pub. 550.

You will need a copy of your 

2023 Form 1040 or 1040-SR 

and Schedule D to figure your 

capital loss carryover to 2024.

TIP

D-15
Schedule D Tax Worksheet Keep for Your Records

Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero and lines 15 and 16 of Schedule D are gains or 

if you file Form 4952 and you have an amount on line 4g, even if you don’t need to file Schedule D. Otherwise, complete the 

Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 16, (or in the instructions for Form 

1040-NR, line 16) to figure your tax. Before completing this worksheet, complete Form 1040, 1040-SR, or 1040-NR through 

line 15.

Exception: Don’t 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, 1040-SR, or 1040-NR, line 3a; 

or 

• Form 1040, 1040-SR, or 1040-NR, line 15, is zero or less.

 Instead, see the instructions for Form 1040, line 16 (or Form 1040-NR, line 16).

1. Enter your taxable income from Form 1040, 1040-SR, or 1040-NR, line 15. (However, if you are filing Form 

2555 (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 16.) ....................................... 1.

2. Enter your qualified dividends from Form 1040, 

1040-SR, or 1040-NR, line 3a ................. 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.

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.

10. Add lines 6 and 9 ........................................................ 10.

11. Add lines 18 and 19 of Schedule D** ........................... 11.

12. Enter the smaller of line 9 or line 11 .......................................... 12.

13. Subtract line 12 from line 10 ............................................................. 13.

14. Subtract line 13 from line 1. If zero or less, enter -0- ........................................... 14.

15. Enter:

• $44,625 if single or married filing 

separately;

• $89,250 if married filing jointly or 

qualifying surviving spouse; or

• $59,750 if head of household.

.............. 15.

16. Enter the smaller of line 1 or line 15 ......................................... 16.

17. Enter the smaller of line 14 or line 16 ........................... 17.

18. Subtract line 10 from line 1. If zero or less, 

enter -0- ................................. 18.

19. Enter the smaller of line 1 or: 

• $182,100 if single or married filing 

separately;

• $364,200 if married filing jointly or 

qualifying surviving spouse; or

• $182,100 if head of household.

.....19.

20. Enter the smaller of line 14 or line 19 ........... 20.

21. Enter the larger of line 18 or line 20 .......................................... 21.

22. Subtract line 17 from line 16. This amount is taxed at 0% .......................... 22.

If lines 1 and 16 are the same, skip lines 23 through 43 and go to line 44. Otherwise, go to line 23.

23. Enter the smaller of line 1 or line 13 ........................... 23.

24. Enter the amount from line 22. (If line 22 is blank, enter -0-.) ......... 24.

25. Subtract line 24 from line 23. If zero or less, enter -0- ............... 25.

26. Enter:

• $492,300 if single;

• $276,900 if married filing separately;

• $553,850 if married filing jointly or 

qualifying surviving spouse; or

• $523,050 if head of household.

.............. 26.

27. Enter the smaller of line 1 or line 26 ............................ 27.

28. Add lines 21 and 22 ........................................ 28.

29. Subtract line 28 from line 27. If zero or less, enter -0- ............... 29.

30. Enter the smaller of line 25 or line 29 ........................... 30.

D-16
Schedule D Tax Worksheet—Continued Keep for Your Records

31. Multiply line 30 by 15% (0.15) ........................................................... 31 .

32. Add lines 24 and 30 ........ 32.

If lines 1 and 32 are the same, skip lines 33 through 43 and go to line 44. Otherwise, go to line 33.

33. Subtract line 32 from line 23 ............................................... 33.

34. Multiply line 33 by 20% (0.20) ........................................................... 34.

If Schedule D, line 19, is zero or blank, skip lines 35 through 40 and go to line 41. Otherwise, go to line 35.

35. Enter the smaller of line 9 above or Schedule D, line 19 ........... 35.

36. Add lines 10 and 21 ....................... 36.

37. Enter the amount from line 1 above ........... 37.

38. Subtract line 37 from line 36. If zero or less, enter -0- ............. 38.

39. Subtract line 38 from line 35. If zero or less, enter -0- ............................ 39.

40. Multiply line 39 by 25% (0.25) ........................................................... 40.

If Schedule D, line 18, is zero or blank, skip lines 41 through 43 and go to line 44. Otherwise, go to line 41.

41. Add lines 21, 22, 30, 33, and 39 ............................................ 41.

42. Subtract line 41 from line 1 ................................................ 42.

43. Multiply line 42 by 28% (0.28) ........................................................... 43.

44. Figure the tax on the amount on line 21. If the amount on line 21 is less than $100,000, use the Tax Table to 

figure the tax. If the amount on line 21 is $100,000 or more, use the Tax Computation Worksheet ........ 44.

45. Add lines 31, 34, 40, 43, and 44 .......................................................... 45.

46. 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 ......... 46.

47. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 45 

or line 46. Also, include this amount on Form 1040, 1040-SR, or 1040-NR, line 16. (If you are filing Form 

2555, don't enter this amount on Form 1040 or 1040-SR, line 16. Instead, enter it on line 4 of the Foreign 

Earned Income Tax Worksheet in the Instructions for Form 1040.) ................................ 47.

* 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, see the footnote in the Foreign Earned Income Tax Worksheet in the 

instructions for Form 1040, line 16, before completing this line.

D-17