What Is IRS Form 8949?
Let me explain what IRS Form 8949 is—it's the form you use to report sales and other dispositions of capital assets, covering capital gains and losses from your investments. If you're an individual taxpayer, or if you represent a partnership, corporation, trust, or estate, this is the form you'll need.
You have to report both short-term and long-term capital gains and losses from selling investments. The details on Form 8949 match up with what you and the IRS get on Form 1099-B, which your brokerage sends you every year.
Key Takeaways
Form 8949 lets you report those capital gains and losses for your tax filing. It has Part I for short-term stuff and Part II for long-term, since the tax rates differ. You'll also need to fill out Schedule D and use the Form 1099-B from your brokerage.
Who Can File Form 8949?
According to the IRS, you can file Form 8949 if you're an individual, partnership, corporation, trust, or estate reporting things like the sale or exchange of a capital asset not on another form, gains from involuntary conversions not related to your business (excluding casualty or theft), non-business bad debts, worthless securities, electing to defer gains in a Qualified Opportunity Fund, or disposing of interests in those funds.
If you're filing jointly, complete as many pages as you need for all transactions, then transfer totals to Schedule D. Corporations, note that you can report sales of stock from certain foreign corporations adjusted for deductions, but only if it generates a loss.
Remember, if you have an eligible gain, you can invest it in a Qualified Opportunity Fund and defer part or all of it.
How to File Form 8949
When you sell a capital asset, that creates a gain or loss you report to the IRS. You use Schedule D on Form 1040 for most of these, but you complete Form 8949 first to get the net gain or loss for Schedule D.
Put your name and taxpayer ID on the form. Part I covers assets held a year or less, Part II for longer. For each asset, list its description, purchase and sale dates, and prices.
Your transactions come from Form 1099-B, which brokerages send you and the IRS—it includes cost basis for buys and sells. If the 1099-B lacks cost basis, calculate it yourself on a separate Form 8949. Transactions without a 1099-B go on another Form 8949.
You can correct errors on the 1099-B using Form 8949. If everything on your 1099-B is accurate with correct basis for all assets, you might not need Form 8949, but Schedule D is still required.
Where to Find Form 8949
You can get all pages of Form 8949 from the IRS website.
Can Schedule D Be Completed Without Form 8949?
No, if you have capital gains or losses, you need both Form 8949 and Schedule D. Form 8949 details each transaction with cost basis, dates, and gain/loss, then summarizes on Schedule D to figure your taxes.
What Information Is Required on Form 8949?
For each asset, include the description, purchase price and date, selling price and date.
Is Form 8949 Required for Reporting Cryptocurrency Transactions?
Yes, if you gain from selling crypto for profit in a taxable account or exchanging it for goods/services that increase in value, you may need Form 8949.
The Bottom Line
Form 8949 is what you and businesses use to report investment capital gains and losses. You need it and Schedule D with your tax return if you sold assets like stock. List each asset's details—description, prices, dates—and for stocks, your brokerage's 1099-B provides most of that info annually.
