Instructions for the IRS Schedule D

Attach Schedule D to your federal Form 1040.

Schedule D is the federal tax form that calculates a taxpayer’s capital gains or losses. Capital gains and losses are determined from the sale of property and must be reported on federal income tax Form 1040 for individual taxpayers. Gains or losses from the sale of property are considered part of a taxpayer’s income. Schedule D is also used by non-resident taxpayers, which are residents of Mexico or Canada, that have purchased and sold property in the United States.

Instructions

1. Enter the descriptive information of any of your short-term gains or losses. Short-term losses or gains come from properties purchased and sold in less than one year’s time. Schedule D needs the description, date of acquisition, date of sale, purchase price, sale price, sale date and the amount of the gain or loss.

2. Enter the total amount located on Schedule D-1, if applicable, on line two of Schedule D. Add lines one and two and enter the amount on line three. If you did not have to file a Schedule D-1, skip lines two and three.

3. Determine whether you filled out any of the following forms: 6252, 4684, 6781, or 8824. If so, enter the amount of any short-term gain or loss from those worksheets on line four. Line five requires any loss or gain from a corporation, partnership, estate or trust. If you filled out a Capital Loss Carryover worksheet enter the amount from line 10 on line six of Schedule D. Add lines one through six and enter the amount on line seven.

4. Follow the instructions from steps one through three of this article to fill out lines 8-15 on Schedule D. The information required is for long-term capital gains or losses, properties sold after being owned for more than one year. This section is to be filled out identically to the first.

5. Fill out the summary. Add together the amounts located on lines seven and lines 15 and enter the total on line 16. Follow the guidelines located under line 16 to know where to enter this information on your federal income tax return.

6. Answer the question on line 17. If the totals on lines 15 and 16 are both gains you need to carry on filling out Schedule D. If they are not both gains, skip lines 18 through 21 and fill out line 22.

References

• IRS.gov: Schedule D