What is IRS Form 8949?

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  • IRS Form 8949 is used to report capital gains and losses.
  • This form is for use by individuals, corporations, partnerships.
  • Form 8949 is used in conjunction with Schedule D on 1040 forms.

If you purchased or sold any assets with capital value (think stocks, businesses, artwork, property etc.) you must report these transactions to the IRS on your federal tax return via IRS Form 8949 – Sales and Other Dispositions of Capital Assets.

Use this form to report both short-term and long-term transactions. Separate your capital gains and losses according to how long you held or owned the property. The holding period for short-term gains or losses is usually 1 year or less. Short-term holdings are reported on Part 1 of Form 8949 while long-term holdings on Part 2.

Form 8949 is an accompaniment to Schedule D, which is also used to report capital gains and losses. Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D.

The IRS provides instructions on how to fill our IRS form 8949 online.

Find out what you must disclose on Form 8949 below, dependent on what you are filing as.

What is IRS Form 8949?

Form 8949 For Individuals

In addition to reporting the sale or exchange of capital assets, individual taxpayers should also use Form 8949 to report the following:
• Gains from involuntary conversions (other than from casualty or theft) of capital assets not used in your trade or business.
• Nonbusiness bad debts.
• Worthlessness of a security.
• The election to defer capital gain invested in a QOF (Qualified Opportunity Fund).
• The disposition of interests in QOFs.

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Form 8949 For Corporations & Partnerships

Corporations or Partnerships should use Form 8949 to report the following, in addition to standard capital gains & losses.

• Sale of stock of a specified 10%-owned foreign corporation, adjusted for the dividends-received deduction under section 245A, but only if the sale would otherwise generate a loss.
• Nonbusiness bad debts.
• Undistributed long-term capital gains from Form 2439.
• Worthlessness of a security.
• The election to defer capital gain invested in a QOF.
• The disposition of interests in QOFs.

Corporations also use Form 8949 to report their share of gain or (loss) from a partnership, estate, or trust.

Form 8949 For Estates & Trusts

Estates & Trusts also use form 8949 to report capital gains and losses. Here are the events they must report:

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• The sale or exchange of a capital asset not reported on another form or schedule.
• Nonbusiness bad debts.
• Worthlessness of a security.
• The election to defer capital gain invested in a QOF.
• The disposition of interests in QOFs

 

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