A Schedule D form is a supplemental form completed and sent in with your 1040 if you have capital gains or losses to report from the tax year. You use the Capital Gains and Losses form to report certain types of sales, exchanges, gains, debts, and distributions. When completed, this form helps you determine what federal income tax you must pay as a result of your capital gains or losses.
This form is used by the U.S. Internal Revenue Service for tax filing and reporting purposes. The Schedule D is known as a Capital Gains and Losses form. This form is used in conjunction with Form 1040. This form will be used to report certain sales, exchanges, gains, distributions, or debts. It will be required by certain parties for a complete income tax return.
Different financial information is required for this form. The first section should list short-term capital gains and losses. These are things that were held for less than a year. The second part of the form is for long term capital gains and losses, which have been held for longer than one year. The last section will calculate the totals of these gains and losses in order to help a filer determine their owed taxes or tax refund.
Schedule D is commonly used to report the sale or exchange of a capital asset not reported on another form or schedule, gains from involuntary conversions of capital assets not held for business or profit, capital gain distributions not reported directly on Form 1040, or nonbusiness bad debts.
A Form 1040 Schedule D contains the following sections:
To complete a Form 1040 Schedule D, you need to provide the following information:
