Income Tax Schedule D Tutorial

Written by amanda maddox
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Income Tax Schedule D Tutorial
Capital gains and losses are figured on the Schedule D. (profit/loss image by Warren Millar from Fotolia.com)

The Schedule D form is used when filing federal income tax to figure and report capital losses or gains. Any individual participating in the sale of real estate, stock or other personal assets for a profit must complete a Schedule D. Business sales are separate and not included on the Schedule D. The Schedule D is attached to the 1040 Form.

Skill level:
Easy

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Things you need

  • 1099B
  • Form 6252
  • Form 4684
  • Form 6781
  • Form 8824

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Instructions

  1. 1

    Separate short-term capital gains, or those held less than a year, from your long-term capital gains, or those held longer than a year. Use your 1099B forms to complete the Schedule D form.

  2. 2

    Enter short-term capital gains and losses in Part I of the schedule D and long-term capital gains in Part II. Provide a description in section a, the date acquired in section b, the date sold in section c, the sales price in section d, the cost in section e, and the gain or loss from the sale in section f.

  3. 3

    Calculate the losses not related to asset sales. The following lines include the calculated amount from other capital losses or gains from additional activities. Sales on Form 6252, contracts and straddles on Form 6781, casualty losses on Form 4684, like exchanges on Form 8824, and losses or gains from partnerships, estates or S-Corporations trusts, or K1s, are included.

  4. 4

    Enter the corresponding amount from the forms in lines 2 through 6. Add the lines and put the total on line 7. Complete all lines in Part I and Part II and enter the total from lines 7 and 15 on line 16. Answer the questions on line 17 and check the correct box.

  5. 5

    Enter the figures on lines 18 though 21 only if you answered "yes" on line 17. Skip to line 22 if the answer is "no". Review line 9b on the 1040 Form to answer line 22. Check "yes" or "no" on line 22 and complete the Schedule D.

Tips and warnings

  • Keep detailed records during the year to make completing the Schedule D easier.
  • Completing the Schedule D may be confusing. Contact a tax professional if you need assistance.

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