Question

Given these information:

1) Year-end 20Y5, includes a $3,600 capital losses from the sale of securities.

2) The beginning other investment is $100,000 and the ending balance is $80,000. Therefore the cost is $20,000.

Can you please advise how Form 8949 - Sales and Other Dispositions of Capital Assets and Schedule D Capital Gains and Losses should be filled out?

Answer 1

Hey there,

Before filling up Form 8949, it is very essential to have a basic understanding as to what this form is.

Let me explain you..

• Form 8949 is an Internal Revenue Service (IRS) form used by individuals, partnerships, and corporations to report capital gains and losses from investment activity.
• Taxpayers must use Form 8949 – Sales and Other Dispositions of Capital Assets, to report short- and long-term capital gains and losses from sales or investment exchanges
• Before 2011, taxpayers used only Schedule D to report such transactions.

When a capital asset is sold, a capital gain (or loss) is generated and must be reported to the IRS for tax purposes.

Schedule D of Form 1040 is used to report most capital gain (or loss) transactions. However, before an individual can enter his net gain or loss on Schedule D, he has to complete Form 8949.

The transactions that taxpayers must report on Form 8949 are reported by brokerages annually to the IRS and to taxpayers using Form 1099-B – Proceeds from Broker and Barter Exchange Transactions.

Now, let us come to the technical aspect or the procedure in filing Form 8949.

Have a look on the steps stated below or you may even check IRS page.

Form 8949 consists of 2 parts; Short-Term and Long-Term (In a worksheet-like format)

The purpose is to report sales and exchanges of capital assets (Which are then moved to Schedule D). When you enter these details in TurboTax this Form is filled out for you automatically.

• To enter sales or exchanges of capital assets in TurboTax Online , Click on My Account > Tools> Tye in the search phrase investment sales in your TurboTax search box, click go and then click the Jump to investment sales link.
• To enter the sales or exchanges of capital assets in TurboTax Desktop, simply click on the Forms button on the top right corner, and do a form search.

• If you need to print this form specifically
  1. Open your return in TurboTax.
  2. From the File menu select Print.
  3. In the pop-up, select Specific Forms on the left. You can choose to print just the form, or the form plus supporting documentation.
  4. On the right side, check off the form(s) you want to print, and then click the Preview Print Copy button. Your form will open in Adobe Reader.
  5. Click the "printer" icon at top (or select Print from the Adobe File menu) to print your form.

I hope that above expalantion and the stated procedure clears your query. Do let me know if you have any other concerns. I'll be happy to help :)

All the best with IRS filling !! :)