IRS Form 8949: Sales and Other Dispositions of Capital Assets

Search Fintrev

Search our guides, reviews and glossary.

IRS Form 8949, Sales and Other Dispositions of Capital Assets, is the federal tax form used to list individual sales and exchanges of capital assets, such as stocks, bonds, mutual fund shares, cryptocurrency and investment real estate. Individuals, partnerships, corporations, trusts and estates all use it. Each row records one transaction: what was sold, when it was bought and sold, the proceeds, the cost basis and any adjustments. The form’s totals then go to Schedule D (Form 1040), where short-term and long-term results are netted and the taxable capital gain or deductible loss is figured.

What Form 8949 Reports

Under the IRS instructions, Form 8949 is used to report:

• Sales or exchanges of capital assets not reported on another form or schedule
• Gains from involuntary conversions (other than casualty or theft) of capital assets not used in a trade or business
• Nonbusiness bad debts
• Securities that became worthless during the year
• The election to defer capital gain invested in a Qualified Opportunity Fund, and later dispositions of interests in those funds

How Form 8949 Works

Parts and checkboxes

The form has two parts: Part I for short-term transactions (assets held one year or less) and Part II for long-term transactions (held more than one year). Within each part, you check one box per page to describe how the transaction was reported to you:

Transactions in different boxes go on separate pages. You complete as many pages as needed, and the totals from every page carry to Schedule D. Sales with no 1099-B, such as a private sale of investment land, generally go in Box C or Box F. Joint filers combine both spouses’ transactions on the same set of forms.

The columns

Each transaction row asks for:

• (a) Description of the property (for example, “100 sh. XYZ”)
• (b) Date acquired
• (c) Date sold or disposed of
• (d) Proceeds (sales price)
• (e) Cost or other basis
• (f) Adjustment code, if any
• (g) Amount of adjustment
• (h) Gain or loss

The formula for column (h) is:

Gain or loss = Proceeds (d) − Basis (e) + Adjustment (g)

The adjustment can be positive or negative. Codes in column (f) explain it. Among the most common: B when the basis on the 1099-B is wrong, W for a disallowed wash sale loss, H for the excludable gain on a main home sale, and M when several transactions are reported on one row with an attached statement. When more than one applies, the letters are combined in alphabetical order, so a row with both a wash sale and multiple transactions uses MW.

Example of Form 8949

Hypothetical example for illustration only.

An investor makes two sales during the year:

1. Buys 50 shares for $4,000 in March and sells them for $5,200 in November of the same year. The broker reports the basis to the IRS. This is short-term, Box A: $5,200 − $4,000 = $1,200 gain.
2. Buys 20 shares of a fund for $3,000 four years earlier and sells them for $2,400. The 1099-B shows the basis as not reported. This is long-term, Box E: $2,400 − $3,000 = $600 loss.

Part I totals a $1,200 short-term gain and Part II a $600 long-term loss. On Schedule D, these are netted. The short-term gain exceeds the long-term loss, so the result is a $600 net short-term capital gain, taxed at ordinary income rates. If the long-term sale had been at a gain instead, it would generally qualify for the lower long-term rates covered in our guide to capital gains tax.

Form 8949, Schedule D and Form 1099-B

• Form 1099-B is an information return you receive from a broker or barter exchange. You do not file it. Its figures are the starting point for Form 8949.
• Form 8949 lists the transactions and corrects anything the 1099-B got wrong or left out, such as missing basis.
• Schedule D nets short-term and long-term results, applies capital loss carryovers and the annual capital loss deduction limit ($3,000, or $1,500 if married filing separately), and sends the result to Form 1040.

Schedule D is required whenever you have reportable capital gains or losses. Form 8949 sometimes is not. If a transaction falls in Box A or Box D and needs no adjustment code, you may enter the totals directly on Schedule D (lines 1a and 8a) and skip Form 8949 for those sales.

For large volumes, such as hundreds of trades, you can report totals on Form 8949 using code M and attach a statement with the required detail, such as a broker statement. E-filers send that attachment with Form 8453. Form 8949 and Schedule D are not separate filings. Both attach to your Form 1040 and are filed with the IRS as part of the return.

Cryptocurrency on Form 8949

The IRS treats digital assets as property. Selling crypto for cash, trading one coin for another, or using it to pay for goods or services is a disposition that can produce a capital gain or loss. Each disposition goes on Form 8949 with its own dates, proceeds and basis, under the same holding period rules as stock. Without a broker form, it goes in Box C or Box F.

What Does Not Go on Form 8949

Several transactions that look similar are reported elsewhere:

• Business property, such as depreciable equipment or rental real estate used in a trade or business, is generally reported on Form 4797. Depreciation recapture that is taxed as ordinary income is figured there, not on Form 8949.
• Capital gain distributions from mutual funds, reported on Form 1099-DIV, go directly on Schedule D or Form 1040 when no other capital transactions require Schedule D.
• Casualty and theft losses use Form 4684.
• Installment sales are first figured on Form 6252.
• A main home sale with the entire gain excluded and no 1099-S generally does not need to be reported. If it must be reported, it goes on Form 8949 with code H.

Limitations

Form 8949 only records what you enter. The tax, the loss limit and the rate are worked out on Schedule D and its worksheets. Its figures are only as good as your basis records. When a 1099-B shows basis as not reported, or when you inherited, received as a gift or reinvested dividends into an asset, you must establish the correct basis yourself. An error in column (e) carries straight through to the gain or loss.

The Bottom Line

Anyone who sold stocks, funds, crypto or investment real estate during the year will likely deal with Form 8949 alongside Schedule D. The form only records what you enter, so accurate basis records matter most, especially when a 1099-B shows basis as not reported or the asset was inherited, gifted or bought with reinvested dividends. Business property, casualty losses and installment sales belong on other forms.