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        Department of the Treasury
        Internal Revenue Service

2023 Instructions for Schedule D
                                              These instructions explain how to complete Schedule D (Form 1040). Complete Form 
Capital Gains                                 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D.
                                              Use Schedule D:
and Losses                                    •    To figure the overall gain or loss from transactions reported on Form 8949;
                                              •    To report certain transactions you don't have to report on Form 8949;
                                              •    To report a gain from Form 2439 or 6252 or Part I of Form 4797;
                                              •    To report a gain or loss from Form 4684, 6781, or 8824;
                                              •    To report a gain or loss from a partnership, S corporation, estate, or trust;
                                              •    To  report  capital  gain  distributions  not  reported  directly  on  Form  1040  or 
                                              1040-SR, line 7 (or effectively connected capital gain distributions not reported direct-
                                              ly on Form 1040-NR, line 7); and
                                              •    To report a capital loss carryover from 2022 to 2023.
                                              Additional information. See Pub. 544 and Pub. 550 for more details.

Section references are to the Internal        er,  for  more  information  about  when       with your trading business, if you previ-
Revenue Code unless otherwise noted.          Form 8949 is needed and when it isn't.         ously  made  a  mark-to-market  election. 
                                                                                             See Traders in Securities, later.
Future Developments                           Use Form 4797 to report the follow-
                                              ing.                                           Use Form 4684 to report involuntary 
For  the  latest  information  about  devel-                                                 conversions of property due to casualty 
opments  related  to  Schedule  D  and  its   1. The sale or exchange of:
                                                                                             or theft.
instructions,  such  as  legislation  enacted a. Real  property  used  in  your  trade 
after they were published, go to IRS.gov/     or business;                                   Use  Form  6781  to  report  gains  and 
ScheduleD.                                    b. Depreciable and amortizable tan-            losses  from  section  1256  contracts  and 
                                              gible  property  used  in  your  trade  or     straddles.
What’s New                                    business (but see  Disposition of Depre-
                                                                                             Use  Form  8824  to  report  like-kind 
                                              ciable  Property  Not  Used  in  Trade  or 
Deferral of gain invested in a qualified                                                     exchanges. A like-kind exchange occurs 
                                              Business in the Form 4797 instructions);
opportunity  fund  (QOF).   Taxpayers                                                        when  you  exchange  business  or  invest-
who made a deferral election in a QOF         c. Oil,  gas,  geothermal,  or  other          ment  property  for  property  of  a  like 
that  meets  the  5-year  holding  period     mineral property; and                          kind.
threshold  shall  be  eligible  for  the  10% d. Section 126 property.
                                                                                             Use Form 8960 to figure any net in-
stepped up basis. See Form 8997 and its       2. The involuntary conversion (other           vestment  income  tax  relating  to  gains 
instructions  for  additional  information    than from casualty or theft) of property       and  losses  reported  on  Schedule  D,  in-
regarding QOFs.                               used  in  a  trade  or  business  and  capital cluding gains and losses from a securi-
                                              assets held more than 1 year for business      ties trading activity.
                                              or profit. But see Disposition of Depre-
General 
                                              ciable  Property  Not  Used  in  Trade  or     Use  Form  8997  to  report  each  QOF 
Instructions                                  Business in the Form 4797 instructions.        investment  you  held  at  the  beginning 
Other Forms You May Have                      3. The disposition of noncapital as-           and end of the tax year and the deferred 
                                              sets  other  than  inventory  or  property     gains  associated  with  each  investment. 
To File                                       held  primarily  for  sale  to  customers  in  Also, use Form 8997 to report any capi-
Use  Form  461  to  figure  your  excess      the  ordinary  course  of  your  trade  or     tal gains you are deferring by investing 
business loss.                                business.                                      in  a  QOF  during  the  tax  year  and  any 
Use Form 8949 to report the sale or           4. Ordinary  loss  on  the  sale,  ex-         QOF investment you disposed of during 
exchange of a capital asset (defined lat-     change, or worthlessness of small busi-        the tax year.
er)  not  reported  on  another  form  or     ness investment company (section 1242)         Capital Asset
schedule and to report the income defer-      stock.
                                                                                             Most property you own and use for per-
ral or exclusion of capital gains. See the    5. Ordinary  loss  on  the  sale,  ex-         sonal purposes or investment is a capital 
Instructions  for  Form  8949.  Complete      change, or worthlessness of small busi-        asset.  For  example,  your  house,  furni-
all necessary pages of Form 8949 before       ness (section 1244) stock.                     ture,  car,  stocks,  and  bonds  are  capital 
you complete line 1b, 2, 3, 8b, 9, or 10      6. Ordinary  gain  or  loss  on  securi-       assets.  A  capital  asset  is  any  property 
of Schedule D. See Lines 1a and 8a, lat-      ties  or  commodities  held  in  connection    owned by you except the following.
                                                                 D-1
Oct 30, 2023                                               Cat. No. 24331I

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1. Stock  in  trade  or  other  property      8. Certain  hedging  transactions  en-          For  more  information  about  holding 
included in inventory or held mainly for      tered into in the normal course of your         periods,  see  the  Instructions  for  Form 
sale to customers in the ordinary course      trade or business. See section 1221(a)(7)       8949.
of  your  trade  or  business.  But  see  the and (b)(2).
                                                                                              Capital Gain Distributions
TIP about certain musical compositions        9. Supplies  regularly  used  in  your 
or copyrights, later.                         trade or business.                              These distributions are paid by a mutual 
2. Accounts or notes receivable:                                                              fund  (or  other  regulated  investment 
                                                   You can elect to treat as capital          company) or real estate investment trust 
a. For services rendered in the ordi-         TIP  assets certain musical composi-            from  its  net  realized  long-term  capital 
nary course of your trade or business,             tions or copyrights you sold or            gains.  Distributions  of  net  realized 
b. For  services  rendered  as  an  em-       exchanged. See Pub. 550 for details.            short-term capital gains aren't treated as 
ployee, or                                                                                    capital gains. Instead, they are included 
c. From the sale of stock in trade or         Basis and Recordkeeping                         on  Form  1099-DIV  as  ordinary  divi-
other  property  included  in  inventory  or  Basis is the amount of your investment          dends.
held mainly for sale to customers.            in  property  for  tax  purposes.  The  basis   Enter on Schedule D, line 13, the to-
3. Depreciable property used in your          of  property  you  buy  is  usually  its  cost. tal capital gain distributions paid to you 
trade or business, even if it is fully de-    There are special rules for certain kinds       during the year, regardless of how long 
preciated.                                    of  property,  such  as  inherited  property.   you held your investment. This amount 
                                              You  need  to  know  your  basis  to  figure 
4. Real estate used in your trade or                                                          is shown in box 2a of Form 1099-DIV.
                                              any gain or loss on the sale or other dis-
business.
                                              position of the property. You must keep         If  there  is  an  amount  in  box  2b,  in-
5. A patent, invention, model, or de-         accurate records that show the basis and,       clude that amount on line 11 of the Un-
sign (whether or not patented); a secret      if  applicable,  adjusted  basis  of  your      recaptured  Section  1250  Gain  Work-
formula or process; a copyright; a liter-     property. Your records should show the          sheet  in  these  instructions  if  you  com-
ary,  musical,  or  artistic  composition;  a purchase  price,  including  commissions;       plete line 19 of Schedule D.
letter or memorandum; or similar prop-        increases  to  basis,  such  as  the  cost  of 
                                                                                              If there is an amount in box 2c, see 
erty that is:                                 improvements;  and  decreases  to  basis, 
                                                                                              Exclusion  of  Gain  on  Qualified  Small 
a. Created by your personal efforts;          such as depreciation, nondividend distri-
                                                                                              Business (QSB) Stock, later.
b. Prepared or produced for you (in           butions on stock, and stock splits.
the  case  of  a  letter,  memorandum,  or                                                    If  there  is  an  amount  in  box  2d,  in-
                                              If you received a Schedule A to Form 
similar property); or                                                                         clude that amount on line 4 of the 28% 
                                              8971  from  an  executor  of  an  estate  or    Rate  Gain  Worksheet  in  these  instruc-
c. Received  under  circumstances             other person required to file an estate tax     tions if you complete line 18 of Sched-
(such as by gift) that entitle you to the     return, you may be required to report a         ule D.
basis  of  the  person  who  created  the     basis consistent with the estate tax value 
property or for whom the property was         of the property.                                If you received capital gain distribu-
prepared  or  produced.  See  section                                                         tions  as  a  nominee  (that  is,  they  were 
1221(a)(3).                                   For  more  information  on  consistent          paid to you but actually belong to some-
                                              basis  reporting  and  basis  generally,  see 
But see the TIP about certain musical                                                         one else), report on Schedule D, line 13, 
                                              Column (e)—Cost or Other Basis in the 
compositions or copyrights below.                                                             only the amount that belongs to you. At-
                                              Instructions for Form 8949, and the fol-        tach  a  statement  showing  the  full 
6. A  U.S.  Government  publication,          lowing publications.                            amount  you  received  and  the  amount 
including the Congressional Record, that       Pub. 551, Basis of Assets.                     you received as a nominee. See the In-
                                              •
you received:                                  Pub. 550, Investment Income and                structions for Schedule B to learn about 
                                              •
a. From  the  U.S.  Government  (or           Expenses.                                       the  requirement  for  you  to  file  Forms 
any  governmental  agency)  for  an                                                           1099-DIV and 1096.
amount  other  than  the  normal  sales       Short- or Long-Term Gain or 
price, or                                     Loss                                            Sale of Your Home
b. Under circumstances (such as by            Report short-term gains or losses in Part       You may not need to report the sale or 
gift)  that  entitle  you  to  the  basis  of I.  Report  long-term  gains  or  losses  in    exchange  of  your  main  home.  If  you 
someone  who  received  the  publication      Part  II.  The  holding  period  for            must report it, complete Form 8949 be-
for  an  amount  other  than  the  normal     short-term  capital  gains  and  losses  is     fore Schedule D.
sales price.                                  generally 1 year or less. The holding pe-       Report  the  sale  or  exchange  of  your 
7. Certain  commodities  derivative           riod for long-term capital gains and los-       main home on Form 8949 if:
financial  instruments  held  by  a  dealer   ses is generally more than 1 year. How-              You can't exclude all of your gain 
                                                                                              •
and  connected  to  the  dealer's  activities ever,  beginning  in  2018,  the  long-term     from income, or
as  a  dealer.  See  section  1221(a)(6)  and holding period for certain gains with re-            You  received  a  Form  1099-S  for 
                                                                                              •
(b)(1).                                       spect  to  “applicable  partnership  inter-     the sale or exchange.
                                              ests” is more than 3 years. See Pub. 541        Any  gain  you  can't  exclude  is  taxable. 
                                              for more information.                           Generally, if you meet the following two 

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tests, you can exclude up to $250,000 of            Example. Tamara  buys  a  house  in          More  information.      See  Pub.  523  for 
gain. If both you and your spouse meet          Virginia  in  2011  that  she  uses  as  her     additional details, including how to fig-
these  tests  and  you  file  a  joint  return, main  home  for  3  years.  For  8  years,       ure and report any taxable gain if:
you can exclude up to $500,000 of gain          from 2014 through 2022, Tamara serves                 You  (or  your  spouse  if  married) 
                                                                                                 •
(but only one spouse needs to meet the          on qualified official extended duty as a         used any part of the home for business 
ownership requirement in Test 1).               member  of  the  uniformed  services  in         or rental purposes after May 6, 1997; or
Test 1.  During the 5-year period ending        Kuwait. In 2023, Tamara sells the house.              There  was  a  period  of  time  after 
                                                                                                 •
on the date you sold or exchanged your          Tamara didn't use the house as her main          2008  when  the  home  wasn't  your  main 
home, you owned it for 2 years or more          home for at least 2 of the 5 years before        home.
(the ownership requirement) and lived in        the sale. To meet Test 1, Tamara elects to 
it as your main home for 2 years or more        suspend the 5-year test period during her        Partnership Interests
(the use requirement).                          8-year  period  of  uniformed  service  in       A sale or other disposition of an interest 
                                                Kuwait.  Because  that  8-year  period 
Test  2. You  haven't  excluded  gain  on                                                        in  a  partnership  may  result  in  ordinary 
                                                won't  be  counted  in  determining  if  she 
the  sale  or  exchange  of  another  main                                                       income,  collectibles  gain  (28%  rate 
                                                used the house as her main home for 2 
home during the 2-year period ending on                                                          gain),  or  unrecaptured  section  1250 
                                                of the 5 years before the sale, she meets 
the date of the sale or exchange of your                                                         gain.  For  details  on  28%  rate  gain,  see 
                                                the  ownership  and  use  requirements  of 
home.                                                                                            the  instructions  for  line  18.  For  details 
                                                Test 1.                                          on  unrecaptured  section  1250  gain,  see 
Reduced  exclusion.  Even  if  you  don't                                                        the instructions for line 19.
meet one or both of the above two tests,            Qualified extended duty. You are on 
you  can  still  claim  an  exclusion  if  you  qualified extended duty if:                      Capital Assets Held for 
sold or exchanged the home because of               • You are called or ordered to active 
a  change  in  place  of  employment,           duty for an indefinite period or for a pe-       Personal Use
health, or certain unforeseen circumstan-       riod of more than 90 days; and                   Generally,  gain  from  the  sale  or  ex-
ces. In this case, the maximum amount               • You are serving at a duty station at       change of a capital asset held for person-
of gain you can exclude is reduced. For         least 50 miles from your main home, or           al  use  is  a  capital  gain.  Report  it  on 
more information, see Pub. 523.                 you  are  living  in  government  quarters       Form  8949  with  box  C  checked  (if  the 
                                                under government orders.                         transaction  is  short  term)  or  box  F 
Sale  of  home  by  surviving  spouse.  If                                                       checked (if the transaction is long term). 
your spouse died before the sale or ex-         Sale  of  home  acquired  in  a  like-kind 
change,  you  can  still  exclude  up  to       exchange. You  can't  exclude  any  gain         However,  if  you  converted  depreciable 
$500,000 of gain if:                            if:                                              property  to  personal  use,  all  or  part  of 
• The  sale  or  exchange  is  no  later            • You  acquired  your  home  in  a           the gain on the sale or exchange of that 
than 2 years after your spouse's death;         like-kind  exchange  in  which  all  or  part    property  may  have  to  be  recaptured  as 
• Just  before  your  spouse's  death,          of the gain wasn't recognized, and               ordinary  income.  Use  Part  III  of  Form 
both spouses met the use requirement of             • You  sold  or  exchanged  the  home        4797  to  figure  the  amount  of  ordinary 
Test 1, at least one spouse met the own-        during  the  5-year  period  beginning  on       income recapture. The recapture amount 
ership  requirement  of Test  1,  and  both     the date you acquired it.                        is  included  on  line  31  (and  line  13)  of 
                                                                                                 Form  4797.  Don't  enter  any  gain  from 
spouses met Test 2; and                         How  to  report  the  sale  of  your  main       this property on line 32 of Form 4797. If 
• You didn't remarry before the sale            home.   If you have to report the sale or        you  aren't  completing  Part  III  for  any 
or exchange.                                    exchange, report it on Form 8949. If the         other properties, enter “N/A” on line 32. 
Exceptions  to  Test  1. You  can  choose       gain  or  loss  is  short  term,  report  it  in If the total gain is more than the recap-
to have the 5-year test period for owner-       Part  I  of  Form  8949  with  box  C            ture amount, enter “From Form 4797” in 
ship and use in Test 1 suspended during         checked. If the gain or loss is long term,       column (a) of Part I of Form 8949 (if the 
any  period  you  or  your  spouse  serves      report  it  in  Part  II  of  Form  8949  with   transaction  is  short  term)  or  Part  II  of 
outside  the  United  States  as  a  Peace      box F checked.                                   Form  8949  (if  the  transaction  is  long 
Corps  volunteer  or  serves  on  qualified         If  you  had  a  gain  and  can  exclude     term), and skip columns (b) and (c). In 
official  extended  duty  as  a  member  of     part or all of it, enter “H” in column (f)       column (d) of Form 8949, enter the ex-
the uniformed services or Foreign Serv-         of Form 8949. Enter the exclusion as a           cess of the total gain over the recapture 
ice of the United States, as an employee        negative number (in parentheses) in col-         amount. Leave columns (e) through (g) 
of  the  intelligence  community,  or  out-     umn (g) of Form 8949. See the instruc-           blank. Complete column (h). Be sure to 
side the United States as an employee of        tions  for  Form  8949,  columns  (f),  (g),     check box C at the top of Part I or box F 
the  Peace  Corps.  This  means  you  may       and (h). Complete all columns.                   at  the  top  of  Part  II  of  this  Form  8949 
be able to meet Test 1 even if, because                                                          (depending on how long you held the as-
                                                    If  you  had  a  loss  but  have  to  report 
of  your  service,  you  didn't  actually  use                                                   set).
                                                the sale or exchange because you got a 
the home as your main home for at least 
                                                Form 1099-S, see Nondeductible Losses, 
the  required  2  years  during  the  5-year                                                     Loss from the sale or exchange of a 
                                                later,  for  instructions  about  how  to  re-
period  ending  on  the  date  of  sale.  The                                                    capital  asset  held  for  personal  use  isn't 
                                                port it.
5-year period can't be extended for more                                                         deductible.  But  if  you  had  a  loss  from 
than 10 years.                                                                                   the sale or exchange of real estate held 
                                                                                                 for personal use for which you received 

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a  Form  1099-S,  you  must  report  the         • A fiduciary of a trust and a fiducia-          ductible,  enter  “L”  in  column  (f)  and 
transaction  on  Form  8949  even  though        ry  (or  beneficiary)  of  another  trust  if    $4,000  (the  difference  between  $1,000 
the loss isn't deductible. Also, if you had      both  trusts  were  created  by  the  same       and  $5,000)  in  column  (g).  In  column 
a loss from the sale or exchange of per-         grantor.                                         (h),  enter  -0-  ($1,000  −  $5,000  + 
sonal property for which you received a          • An executor of an estate and a ben-            $4,000).
Form 1099-K, you must report the trans-          eficiary of that estate, unless the sale or      At-risk rules. If you disposed of (a) an 
action on Form 8949 or on Schedule 1             exchange was to satisfy a pecuniary be-          asset  used  in  an  activity  to  which  the 
(Form 1040) even though the loss isn’t           quest  (that  is,  a  bequest  of  a  sum  of    at-risk  rules  apply,  or  (b)  any  part  of 
deductible.                                      money).                                          your interest in an activity to which the 
Example.    You  have  a  loss  on  the          • An individual and a tax-exempt or-             at-risk  rules  apply,  and  you  have 
sale  of  a  vacation  home  that  isn't  your   ganization  controlled  directly  (or  indi-     amounts  in  the  activity  for  which  you 
main  home  and  you  received  a  Form          rectly) by the individual or the individu-       aren't  at  risk,  see  the  Instructions  for 
1099-S  for  the  transaction.  Report  the      al's family.                                     Form 6198.
transaction in Part I or Part II of Form         See  Pub.  544  for  more  details  on           Passive activity rules. If the loss is al-
8949,  depending  on  how  long  you             sales  and  exchanges  between  related          lowable under the at-risk rules, it may be 
owned the home. Complete all columns.            parties.                                         subject to the passive activity rules. See 
Because  the  loss  isn't  deductible,  enter                                                     Form  8582  and  its  instructions  for  de-
“L”  in  column  (f).  Enter  the  difference    Report a transaction that results in a           tails on reporting capital gains and los-
between column (d) and column (e) as a           nondeductible loss in Part I or Part II of       ses from a passive activity.
positive  amount  in  column  (g).  Then         Form 8949 (depending on how long you 
complete  column  (h).  (For  example,  if       held the property). Unless you received          Items for Special Treatment
you  entered  $5,000  in  column  (d)  and       a Form 1099-B for the sale or exchange,          • Transactions by a securities dealer. 
$6,000  in  column  (e),  enter  $1,000  in      check box C at the top of Part I or box F        See  section  475  and  Rev.  Rul.  97-39, 
column  (g).  Then  enter  -0-  ($5,000  −       at  the  top  of  Part  II  of  this  Form  8949 which begins on page 4 of Internal Rev-
$6,000 + $1,000) in column (h). Be sure          (depending on how long you owned the             enue  Bulletin  1997-39  at IRS.gov/pub/
to check box C at the top of Part I or box       property).  Complete  all  columns.  Be-         irs-irbs/irb97-39.pdf.
F at the top of Part II of this Form 8949        cause the loss isn't deductible, enter “L”       • Bonds and other debt instruments. 
(depending on how long you owned the             in  column  (f).  Enter  the  amount  of  the    See Pub. 550.
home).)                                          nondeductible loss as a positive number          • Certain  real  estate  subdivided  for 
                                                 in  column  (g).  Complete  column  (h).         sale that may be considered a capital as-
Capital Losses                                                                                    set. See section 1237.
                                                 See the instructions for Form 8949, col-
You can deduct capital losses up to the          umns (f), (g), and (h).                          • Gain  on  the  sale  of  depreciable 
amount of your capital gains plus $3,000                                                          property to a more-than-50%-owned en-
                                                 Example  1.  You  sold  land  you  held 
($1,500  if  married  filing  separately).                                                        tity or to a trust of which you are a bene-
                                                 as  an  investment  for  5  years  to  your 
You  may  be  able  to  use  capital  losses                                                      ficiary. See Pub. 544.
                                                 brother  for  $10,000.  Your  basis  was 
that exceed this limit in future years. For                                                       • Gain on the disposition of stock in 
                                                 $15,000. On Part II of Form 8949, check 
details,  see  the  instructions  for  line  21.                                                  domestic  international  sales  corpora-
                                                 box F at the top. Enter $10,000 on Form 
Be sure to report all of your capital gains                                                       tions. See section 995(c).
                                                 8949, Part II, column (d). Enter $15,000 
and  losses  even  if  you  can't  use  all  of                                                   • Gain  on  the  sale  or  exchange  of 
                                                 in column (e). Because the loss isn't de-
your losses in 2023.                                                                              stock  in  certain  foreign  corporations. 
                                                 ductible,  enter  “L”  in  column  (f)  and 
Certain Nondeductible                            $5,000 (the difference between $10,000           See section 1248.
Losses                                           and $15,000) in column (g). In column            • Transfer  of  property  to  a  partner-
                                                 (h),  enter  -0-  ($10,000  −  $15,000  +        ship that would be treated as an invest-
You  can’t  deduct  a  loss  from  a  sale  or   $5,000). If this is your only transaction        ment  company  if  it  were  incorporated. 
exchange  between  certain  related  par-        on  this  Form  8949,  enter  $10,000  on        See Pub. 541.
ties.  This  includes  a  direct  or  indirect   Schedule  D,  line  10,  column  (d).  Enter     • Sales  of  stock  received  under  a 
sale  or  exchange  of  property  between        $15,000  in  column  (e)  and  $5,000  in        qualified  public  utility  dividend  rein-
any of the following.                            column  (g).  In  column  (h),  enter  -0-       vestment plan. See Pub. 550.
• Members of a family.                           ($10,000 − $15,000 + $5,000).                    • Transfer of appreciated property to 
• A  corporation  and  an  individual                                                             a political organization. See section 84.
who  directly  (or  indirectly)  owns  more      Example  2.  You  received  a  Form                Transfer of property by a U.S. per-
                                                                                                  •
than 50% of the corporation's stock (un-         1099-B  showing  proceeds  (sales  price)        son to a foreign estate or trust. See sec-
less  the  loss  is  from  a  distribution  in   of $1,000 and basis of $5,000. Box 7 on          tion 684.
complete liquidation of a corporation).          Form 1099-B is checked, indicating that            If  you  give  up  your  U.S.  citizen-
                                                                                                  •
• A  grantor  and  a  fiduciary  of  a           your  loss  of  $4,000  ($1,000  −  $5,000)      ship, you may be treated as having sold 
trust.                                           isn't allowed. On the top of Form 8949,          all your property for its fair market val-
• A  fiduciary  and  a  beneficiary  of          check box A or box B in Part I or box D          ue on the day before you gave up your 
the same trust.                                  or box E in Part II (whichever applies).         citizenship.  This  also  applies  to 
                                                 Enter $1,000 in column (d) and $5,000            long-term U.S. residents who cease to be 
                                                 in column (e). Because the loss isn't de-

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lawful permanent residents. For details,         ownership  transaction  was  open  in  any     bond  method  and  the  Ordinary  box  in 
exceptions, and rules for reporting these        prior year, you may have to pay interest.      box 2 is checked, an adjustment may be 
deemed  sales,  see  Pub.  519  and  Form        See  section  1260(b)  for  details,  includ-  required. Report the transaction on Form 
8854.                                            ing  how  to  figure  the  interest.  Include  8949  and  complete  the  form’s  Work-
•    In general, no gain or loss is recog-       the  interest  as  an  additional  tax  on     sheet  for  Contingent  Payment  Debt  In-
nized on the transfer of property from an        Schedule 2 (Form 1040), line 17z. In the       strument  Adjustment  in  Column  (g)  to 
individual  to  a  spouse  or  a  former         space  provided,  enter  “Section  1260(b)     figure the adjustment to enter in column 
spouse if the transfer is incident to a di-      interest” and the amount of the interest.      (g) of Form 8949.
vorce. See Pub. 504.                             This interest isn't deductible.
                                                                                                See Pub. 550 or Pub. 1212 for more 
•    Amounts  received  on  the  retire-         •  Gain  or  loss  from  the  disposition 
                                                                                                details  on  any  special  rules  or  adjust-
ment of a debt instrument are generally          of stock or other securities in an invest-
                                                                                                ments that might apply.
treated  as  received  in  exchange  for  the    ment club. See Pub. 550.
debt instrument. See Pub. 550.                   •  Certain virtual currencies, such as         Wash Sales
•    Any loss on the disposition of con-         Bitcoin.  See  the  Instructions  for  Form 
                                                                                                A  wash  sale  occurs  when  you  sell  or 
verted wetland or highly erodible crop-          1040 and IRS.gov/VirtualCurrencyFAQs.
                                                                                                otherwise dispose of stock or securities 
land  that  is  first  used  for  farming  after •  If  you  are  deferring  eligible  gain 
                                                                                                (including a contract or option to acquire 
March  1,  1986,  is  reported  as  a            by investing in a QOF, report the gain on 
                                                                                                or sell stock or securities) at a loss and, 
long-term capital loss on Form 8949, but         the form on which you normally report 
                                                                                                within 30 days before or after the sale or 
any gain is reported as ordinary income          the gain and report the deferral on Form 
                                                                                                disposition, you:
on Form 4797.                                    8949. See How To Report an Election to 
•    If qualified dividends that you re-         Defer Tax on Eligible Gain Invested in a       1. Buy  substantially  identical  stock 
ported  on  Form  1040,  1040-SR,  or            QOF in the Form 8949 instructions.             or securities,
1040-NR, line 3a, include extraordinary                                                         2. Acquire  substantially  identical 
dividends,  any  loss  on  the  sale  or  ex-    Market Discount Bonds                          stock  or  securities  in  a  fully  taxable 
change of the stock is a long-term capi-         In general, a capital gain from the dispo-     trade,
tal loss to the extent of the extraordinary      sition of a market discount bond is trea-      3. Enter into a contract or option to 
dividends. An extraordinary dividend is          ted  as  interest  income  to  the  extent  of acquire  substantially  identical  stock  or 
a  dividend  that  equals  or  exceeds  10%      accrued  market  discount  as  of  the  date   securities, or
(5%  in  the  case  of  preferred  stock)  of    of  disposition.  See  sections  1276 
your basis in the stock.                         through 1278 and Pub. 550 for more in-         4. Acquire  substantially  identical 
•    Amounts received by shareholders            formation  on  market  discount.  See  the     stock or securities for your individual re-
in corporate liquidations. See Pub. 550.         Instructions  for  Form  8949  for  detailed   tirement  arrangement  (IRA)  or  Roth 
•    Cash received in lieu of fractional         information about how to report the dis-       IRA.
shares of stock as a result of a stock split     position of a market discount bond.            You  can't  deduct  losses  from  wash 
or stock dividend. See Pub. 550.                                                                sales unless the loss was incurred in the 
•    Load charges to acquire stock in a          Contingent Payment Debt 
                                                                                                ordinary  course  of  your  business  as  a 
regulated  investment  company  (includ-         Instruments                                    dealer in stock or securities. The basis of 
ing  a  mutual  fund),  which  may  not  be      Any  gain  recognized  on  the  sale,  ex-     the  substantially  identical  property  (or 
taken  into  account  in  determining  gain      change,  or  retirement  of  a  taxable  con-  contract or option to acquire such prop-
or  loss  on  certain  dispositions  of  the     tingent payment debt instrument subject        erty)  is  its  cost  increased  by  the  disal-
stock  if  reinvestment  rights  were  exer-     to  the  noncontingent  bond  method  is       lowed loss (except in the case of (4) ear-
cised. See Pub. 550.                             treated as interest income rather than as      lier).
•    The sale or exchange of S corpora-          capital  gain,  even  if  you  hold  the  debt 
                                                                                                These wash sale rules don't apply to a 
tion stock or an interest in a partnership       instrument as a capital asset. If you sell 
                                                                                                redemption of shares in a floating-NAV 
or trust held for more than 1 year, which        a  taxable  contingent  payment  debt  in-
                                                                                                (net asset value) money market fund.
may result in collectibles gain (28% rate        strument  subject  to  the  noncontingent 
gain). See the instructions for line 18.         bond method at a loss, your loss is an or-     If  you  received  a  Form  1099-B  (or 
•    Gain or loss on the disposition of          dinary  loss  to  the  extent  of  your  prior substitute  statement),  box  1g  of  that 
securities  futures  contracts.  See  Pub.       original issue discount (OID) inclusions       form will generally show whether there 
550.                                             on  the  debt  instrument.  If  the  debt  in- was  any  nondeductible  wash  sale  loss 
•    Gain  on  the  constructive  sale  of       strument is a capital asset, treat any loss    and its amount if:
certain  appreciated  financial  positions.      that is more than your prior OID inclu-        •     The  stock  or  securities  sold  were 
See Pub. 550.                                    sions as a capital loss. See Regulations       covered  securities  (defined  in  the  in-
•    Certain  constructive  ownership            section  1.1275-4(b)  for  exceptions  to      structions  for  Form  8949,  column  (e)), 
transactions. Gain in excess of the gain         these rules.                                   and
you  would  have  recognized  if  you  had                                                      •     The substantially identical stock or 
held a financial asset directly during the       If  you  received  a  Form  1099-B  (or        securities you bought had the same CU-
term  of  a  derivative  contract  must  be      substitute  statement)  reporting  the  sale   SIP  number  as  the  stock  or  securities 
treated as ordinary income. See section          of a taxable contingent payment debt in-       you  sold  and  were  bought  in  the  same 
1260. If any portion of the constructive         strument  subject  to  the  noncontingent      account  as  the  stock  or  securities  you 

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sold. (CUSIP numbers are security iden-        4797 instead of on Form 8949. Regard-            Internal  Revenue  Bulletin  1999-7  at 
tification numbers.)                           less of whether a trader reports his or her      IRS.gov/pub/irs-irbs/irb99-07.pdf.
However, you can't deduct a loss from a        gains and losses on Form 8949 or Form            If you hold securities for investment, 
wash  sale  even  if  it  isn't  reported  on  4797, the gain or loss from the disposi-         you must identify them as such in your 
Form  1099-B  (or  substitute  statement).     tion of securities isn't taken into account      records  on  the  day  you  acquired  them 
For more details on wash sales, see Pub.       when  figuring  net  earnings  from              (for  example,  by  holding  the  securities 
550.                                           self-employment  on  Schedule  SE.  See          in a separate brokerage account). Securi-
                                               the Instructions for Schedule SE for an 
Report a wash sale transaction in Part                                                          ties  that  you  hold  for  investment  aren't 
                                               exception  that  applies  to  section  1256 
I or Part II (depending on how long you                                                         marked to market.
                                               contracts.
owned  the  stock  or  securities)  of  Form                                                    Short Sales
8949 with the appropriate box checked.         The limitation on investment interest 
Complete all columns. Enter “W” in col-        expense that applies to investors doesn't        A short sale is a contract to sell property 
umn  (f).  Enter  as  a  positive  number  in  apply  to  interest  paid  or  incurred  in  a   you borrowed for delivery to a buyer. At 
column (g) the amount of the loss not al-      trading business. A trader reports inter-        a later date, you either buy substantially 
lowed.  See  the  instructions  for  Form      est expense and other expenses (exclud-          identical  property  and  deliver  it  to  the 
8949, columns (f), (g), and (h).               ing commissions and other costs of ac-           lender or deliver property that you held 
                                               quiring or disposing of securities) from a       but didn't want to transfer at the time of 
Traders in Securities                          trading business on Schedule C (instead          the sale.
You are a trader in securities if you are      of Schedule A).                                  Example.       You  think  the  value  of 
engaged  in  the  business  of  buying  and                                                     XYZ  stock  will  drop.  You  borrow  10 
                                               A trader may also hold securities for 
selling securities for your own account.                                                        shares  from  your  broker  and  sell  them 
                                               investment. The rules for investors will 
To be engaged in business as a trader in                                                        for $100. This is a short sale. You later 
                                               generally apply to those securities. Allo-
securities,  all  of  the  following  state-                                                    buy 10 shares for $80 and deliver them 
                                               cate interest and other expenses between 
ments must be true.                                                                             to  your  broker  to  close  the  short  sale. 
                                               your  trading  business  and  your  invest-
•    You must seek to profit from daily                                                         Your gain is $20 ($100 − $80).
                                               ment securities.
market  movements  in  the  prices  of  se-                                                     Holding  period. Usually,  your  holding 
curities and not from dividends, interest,                                                      period is the amount of time you actual-
or capital appreciation.                       Mark-to-Market Election for 
                                                                                                ly held the property eventually delivered 
•    Your activity must be substantial.        Traders
                                                                                                to the broker or lender to close the short 
•    You must carry on the activity with       A  trader  may  make  an  election  under        sale. However, your gain when closing a 
continuity and regularity.                     section 475(f) to report all gains and los-      short  sale  is  short  term  if  you  (a)  held 
The  following  facts  and  circumstan-        ses  from  securities  held  in  connection      substantially  identical  property  for  1 
ces should be considered in determining        with  a  trading  business  as  ordinary  in-    year or less on the date of the short sale, 
if your activity is a business.                come (or loss), including those from se-         or  (b)  acquired  property  substantially 
•    Typical holding periods for securi-       curities held at the end of the year. Se-        identical to the property sold short after 
ties bought and sold.                          curities  held  at  the  end  of  the  year  are the short sale but on or before the date 
•    The frequency and dollar amounts          “marked to market” by treating them as           you close the short sale. If you held sub-
of your trades during the year.                if  they  were  sold  for  fair  market  value   stantially  identical  property  for  more 
•    The extent to which you pursue the        on  the  last  business  day  of  the  year.     than 1 year on the date of a short sale, 
activity  to  produce  income  for  a  liveli- Generally, the election must be made by          any  loss  realized  on  the  short  sale  is  a 
hood.                                          the  due  date  (not  including  extensions)     long-term capital loss, even if the prop-
•    The amount of time you devote to          of the tax return for the year prior to the      erty used to close the short sale was held 
the activity.                                  year for which the election becomes ef-          1 year or less.
                                               fective.  To  be  effective  for  2023,  the     Reporting  a  short  sale. Report  any 
You  are  considered  an  investor,  and       election  must  have  been  made  by  the        short  sale  on  Form  8949  in  the  year  it 
not a trader, if your activity doesn't meet    due date of your 2022 return (not count-         closes.
the  above  definition  of  a  business.  It   ing extensions).
                                                                                                If a short sale closed in 2023 but you 
doesn't matter whether you call yourself       Starting with the year the election be-          didn't get a 2023 Form 1099-B (or sub-
a trader or a “day trader.”                    comes  effective,  a  trader  reports  all       stitute statement) for it because you en-
Like an investor, a trader must gener-         gains and losses from securities held in         tered  into  it  before  2011,  report  it  on 
ally report each sale of securities (taking    connection with the trading business, in-        Form 8949 in Part I with box C checked 
into account commissions and any other         cluding securities held at the end of the        or Part II with box F checked (whichev-
costs of acquiring or disposing of the se-     year, in Part II of Form 4797. If you pre-       er applies). In column (a), enter (for ex-
curities) on Form 8949 unless one of the       viously  made  the  election,  see  the  In-     ample)  “100  sh.  XYZ  Co.—2010  short 
exceptions described in the Instructions       structions for Form 4797. For details on         sale  closed.”  Fill  in  the  other  columns 
for  Form  8949  applies.  However,  if  a     making the mark-to-market election for           according  to  their  instructions.  Report 
trader previously made the mark-to-mar-        2023, see Pub. 550 or Rev. Proc. 99-17,          the  short  sale  the  same  way  if  you  re-
ket  election  (explained  below),  each       which starts on the bottom of page 52 of         ceived a 2023 Form 1099-B (or substi-
transaction is reported in Part II of Form 

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tute  statement)  that  doesn't  show  pro-  If  there  is  an  amount  in  box  1b  of    gain  or  loss  is  recognized  on  the  ex-
ceeds (sales price).                         Form  2439,  include  that  amount  on        change of your equity interest in the mu-
                                             line  11  of  the Unrecaptured  Section       tual  company  for  stock.  The  company 
Gain or Loss From Options                    1250  Gain  Worksheet  if  you  complete      can  advise  you  if  the  transaction  is  a 
Report on Form 8949 gain or loss from        line 19 of Schedule D.                        tax-free  reorganization.  Your  holding 
the  closing  or  expiration  of  an  option                                               period for the new stock includes the pe-
that isn't a section 1256 contract but is a  If  there  is  an  amount  in  box  1c  of    riod  you  held  an  equity  interest  in  the 
capital asset in your hands. If an option    Form  2439,  see  Exclusion  of  Gain  on     mutual company. If you received cash in 
you purchased expired, enter the expira-     Qualified  Small  Business  (QSB)  Stock,     exchange  for  your  equity  interest,  you 
tion date in column (c) and enter “EX-       later.                                        must recognize any capital gain. If you 
PIRED” in column (d). If an option that      If  there  is  an  amount  in  box  1d  of    held the equity interest for more than 1 
was granted (written) expired, enter the     Form  2439,  include  that  amount  on        year, report the gain as a long-term capi-
expiration date in column (b) and enter      line 4 of the 28% Rate Gain Worksheet         tal gain in Part II of Form 8949. If you 
“EXPIRED”  in  column  (e).  Fill  in  the   if you complete line 18 of Schedule D.        held the equity interest for 1 year or less, 
other columns according to their instruc-                                                  report  the  gain  as  a  short-term  capital 
tions. See Pub. 550 for details.             Include on Schedule 3 (Form 1040),            gain in Part I of Form 8949. Be sure the 
                                             line 13a, the tax paid as shown in box 2      appropriate box is checked at the top of 
If  a  call  option  you  sold  after  2013  of Form 2439. Add to the basis of your        Form 8949.
was exercised, the option premium you        stock the excess of the amount included 
                                                                                           If  the  demutualization  transaction 
received  will  be  reflected  in  the  pro- in income over the amount of the credit 
                                                                                           doesn't qualify as a tax-free reorganiza-
ceeds  shown  in  box  1d  of  the  Form     for the tax paid. See Pub. 550 for details.
1099-B (or substitute statement) you re-                                                   tion,  you  must  recognize  a  capital  gain 
ceived. If you sold the call option before   Installment Sales                             or loss. If you held the equity interest for 
2014, the option premium you received        If you sold property (other than publicly     more than 1 year, report the gain or loss 
may not be reflected on Form 1099-B. If      traded stocks or securities) at a gain and    as a long-term capital gain or loss in Part 
it isn't, enter the premium as a positive    you will receive a payment in a tax year      II of Form 8949. If you held the equity 
number  in  column  (g)  of  Form  8949.     after the year of sale, you must generally    interest for 1 year or less, report the gain 
Enter “E” in column (f).                     report the sale on the installment method     or  loss  as  a  short-term  capital  gain  or 
Example.      For $10 in 2013, you sold      unless you elect not to. Use Form 6252        loss in Part I of Form 8949. Be sure the 
Joe an option to buy one share of XYZ        to  report  the  sale  on  the  installment   appropriate box is checked at the top of 
stock for $80. Joe later exercised the op-   method. Also, use Form 6252 to report         Form 8949. Your holding period for the 
tion.  The  Form  1099-B  you  get  shows    any  payment  received  in  2023  from  a     new  stock  begins  on  the  day  after  you 
the proceeds to be $80. Enter $80 in col-    sale made in an earlier year that you re-     received the stock.
umn (d) of Form 8949. Enter “E” in col-      ported on the installment method.             Small Business (Section 
umn  (f)  and  $10  in  column  (g).  Com-
                                             To elect out of the installment meth-
plete the other columns according to the                                                   1244) Stock
                                             od, report the full amount of the gain on 
instructions.                                                                              Report  an  ordinary  loss  from  the  sale, 
                                             Form 8949 on a timely filed return (in-       exchange,  or  worthlessness  of  small 
NAV Method for Money                         cluding  extensions)  for  the  year  of  the business  (section  1244)  stock  on  Form 
Market Funds                                 sale. If your original return was filed on    4797. However, if the total loss is more 
                                             time,  you  can  make  the  election  on  an  than  the  maximum  amount  that  can  be 
If you have a capital gain or loss deter-    amended  return  filed  no  later  than  6    treated  as  an  ordinary  loss  for  the  year 
mined under the net asset value (NAV)        months after the due date of your return      ($50,000 or, on a joint return, $100,000), 
method with respect to shares in an NAV      (excluding extensions). Enter “Filed pur-     also report the transaction on Form 8949 
money  market  fund,  report  the  capital   suant  to  section  301.9100-2”  at  the  top as follows.
gain or loss on Form 8949, Part I, with      of the amended return.
box C checked. Enter the name of each                                                      1. In column (a), enter “Capital por-
fund  followed  by  “(NAV)”  in  column      Demutualization of Life                       tion of section 1244 stock loss.”
(a). Enter the net gain or loss in column    Insurance Companies                           2. Complete columns (b) and (c) as 
(h). Leave all other columns blank. See                                                    you normally would.
                                             Demutualization  of  a  life  insurance 
the Instructions for Form 8949.                                                            3. In  column  (d),  enter  the  entire 
                                             company occurs when a mutual life in-
Undistributed Capital Gains                  surance  company  changes  to  a  stock       sales price of the stock sold.
Include  on  Schedule  D,  line  11,  the    company. If you were a policyholder or        4. In column (e), enter the entire ba-
amount from box 1a of Form 2439. This        annuitant  of  the  mutual  company,  you     sis of the stock sold.
represents  your  share  of  the  undistrib- may  have  received  either  stock  in  the   5. Enter  “S”  in  column  (f).  See  the 
uted long-term capital gains of the regu-    stock company or cash in exchange for         instructions for Form 8949, columns (f), 
lated  investment  company  (including  a    your equity interest in the mutual com-       (g), and (h).
mutual  fund)  or  real  estate  investment  pany.
                                                                                           6. In column (g), enter the loss you 
trust.                                       If  the  demutualization  transaction         claimed on Form 4797 for this transac-
                                             qualifies as a tax-free reorganization, no    tion. Enter it as a positive number.

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7. Complete  column  (h)  according           corporation  with  total  gross  assets  of     • A  business  involving  the  produc-
to its instructions.                          $50 million or less (a) at all times after      tion  of  products  for  which  percentage 
                                              August  9,  1993,  and  before  the  stock      depletion can be claimed.
Report  the  transaction  in  Part  I  or 
                                              was  issued;  and  (b)  immediately  after 
Part II of Form 8949 (depending on how                                                        • A  business  of  operating  a  hotel, 
                                              the  stock  was  issued.  Gross  assets  in-    motel, restaurant, or similar business.
long you held the stock) with the appro-
                                              clude  those  of  any  predecessor  of  the 
priate box checked.                                                                           For more details about limits and ad-
                                              corporation.  All  corporations  that  are      ditional  requirements  that  may  apply, 
Example. You  sold  section  1244             members  of  the  same  parent-subsidiary       see Pub. 550 or section 1202.
stock  for  $1,000.  Your  basis  was         controlled group are treated as one cor-
                                                                                              Acquisition date of stock acquired af-
$60,000.  You  had  held  the  stock  for  3  poration.
                                                                                              ter  February  17,  2009.  When  you  are 
years.  You  can  claim  $50,000  of  your    4. You must have acquired the stock             determining  whether  your  exclusion  is 
loss as an ordinary loss on Form 4797.        at  its  original  issue  (either  directly  or limited  to  50%,  75%,  or  100%  of  the 
To  claim  the  rest  of  the  loss  on  Form through  an  underwriter),  either  in  ex-     gain  from  QSB  stock,  your  acquisition 
8949,  check  the  appropriate  box  at  the  change  for  money  or  other  property         date is considered to be the first day you 
top. Enter $1,000 on Form 8949, Part II,      (other than stock) or as pay for services       held  the  stock  (determined  after  apply-
column  (d).  Enter  $60,000  in  column      (other than as an underwriter) to the cor-      ing  the  holding  period  rules  in  section 
(e). Enter “S” in column (f) and $50,000      poration. In certain cases, you may meet        1223).
(the  ordinary  loss  claimed  on  Form       this test if you acquired the stock from 
4797) in column (g). In column (h), en-       another person who met the test (such as        Empowerment Zone Business 
ter  ($9,000)  ($1,000  −  $60,000  +         by gift or inheritance) or through a con-
                                                                                              Stock
$50,000). Put it in parentheses to show it    version  or  exchange  of  QSB  stock  you 
is a negative amount.                         held.                                           You can generally exclude up to 60% of 
Exclusion of Gain on                          5. During  substantially  all  the  time        your gain from the sale or exchange of 
Qualified Small Business                      you held the stock:                             QSB stock held for more than 5 years if 
                                                                                              you  meet  the  following  additional  re-
(QSB) Stock                                   a. The corporation was a C corpora-             quirements.
                                              tion;
Section  1202  allows  you  to  exclude  a                                                    1. The stock you sold or exchanged 
portion of the eligible gain on the sale or   b. At least 80% of the value of the             was stock in a corporation that qualified 
exchange  of  QSB  stock.  The  section       corporation's assets were used in the ac-       as an empowerment zone business dur-
1202  exclusion  applies  only  to  QSB       tive  conduct  of  one  or  more  qualified     ing substantially all of the time you held 
stock held for more than 5 years. If you      businesses (defined next); and                  the stock.
acquired  the  QSB  stock  on  or  before     c. The  corporation  wasn't  a  foreign         2. You acquired the stock after De-
February 17, 2009, you can exclude up         corporation,  DISC,  former  DISC,  regu-       cember  21,  2000,  and  before  February 
to 50% of the qualified gain. However,        lated investment company, real estate in-       18, 2009.
you can exclude up to 60% of the quali-       vestment trust, REMIC, FASIT, or coop-
fied gain on certain empowerment zone         erative,  or  a  corporation  that  has  made   3. The  gain  from  the  sale  or  ex-
business  stock  for  gain  attributable  to  (or that has a subsidiary that has made) a      change of the stock is attributable to pe-
periods  on  or  before  December  31,        section 936 election.                           riods on or before December 31, 2018.
2018. The 60% exclusion doesn’t apply                                                         Requirement 1 will still be met if the 
                                                       SSBIC.  A  specialized  small 
to gain attributable to periods after De-                                                     corporation  ceased  to  qualify  after  the 
                                              TIP      business  investment  company 
cember  31,  2018.  See Empowerment                                                           5-year period that began on the date you 
                                                       (SSBIC)  is  treated  as  having 
Zone Business Stock, later.                                                                   acquired  the  stock.  However,  the  gain 
                                              met test 5b.
                                                                                              that qualifies for the 60% exclusion can't 
If  you  acquired  the  QSB  stock  after                                                     be  more  than  the  gain  you  would  have 
                                              Definition  of  qualified  business.     A 
February 17, 2009, and before Septem-                                                         had if you had sold the stock on the date 
                                              qualified  business  is  any  business  that 
ber 28, 2010, you can exclude up to 75%                                                       the corporation ceased to qualify.
                                              isn't one of the following.
of the qualified gain.
                                              •    A business involving services per-         Stock  acquired  after  February  17, 
If  you  acquired  the  QSB  stock  after     formed in the field of health, law, engi-       2009. You  can  exclude  up  to  75%  of 
September 27, 2010, you can exclude up        neering, architecture, accounting, actua-       your gain if you acquired the stock after 
to 100% of the qualified gain.                rial science, performing arts, consulting,      February 17, 2009, and before Septem-
                                              athletics, financial services, or brokerage     ber 28, 2010.
To  be  QSB  stock,  the  stock  must         services.                                       You can exclude up to 100% of your 
meet all of the following tests.              •    A business whose principal asset is        gain if you acquired the stock after Sep-
1. It  must  be  stock  in  a  C  corpora-    the  reputation  or  skill  of  one  or  more   tember 27, 2010.
tion (that is, not S corporation stock).      employees.
2. It  must  have  been  originally  is-      •    A  banking,  insurance,  financing,        More  information.         For  more  informa-
sued after August 10, 1993.                   leasing, investing, or similar business.        tion about empowerment zone business-
                                              •    A farming business (including the          es, see section 1397C.
3. As  of  the  date  the  stock  was  is-    raising or harvesting of trees).
sued, the corporation was a domestic C 

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Pass-Through Entities                          gain (box 1a) on Schedule D, line 11. In        you  can  elect  to  postpone  gain  if  you 
If you held an interest in a pass-through      column (a) of Form 8949, Part II, enter         buy other QSB stock during the 60-day 
entity  (a  partnership,  S  corporation,      the name of the corporation whose stock         period that began on the date of the sale. 
common  trust  fund,  or  mutual  fund  or     was sold. In column (f), enter “Q,” and         A pass-through entity can also make the 
other  regulated  investment  company)         in  column  (g),  enter  the  amount  of  the   election to postpone gain. The benefit of 
that  sold  QSB  stock,  to  qualify  for  the excluded gain as a negative number. See         the postponed gain applies to your share 
exclusion you must have held the inter-        the instructions for Form 8949, columns         of the entity's postponed gain if you held 
est  on  the  date  the  pass-through  entity  (f),  (g),  and  (h).  If  you  are  completing an interest in the entity for the entire pe-
acquired the QSB stock and at all times        line 18 of Schedule D, enter as a posi-         riod the entity held the QSB stock. If a 
thereafter until the stock was sold.           tive number the amount of your allowa-          pass-through entity sold QSB stock held 
                                               ble exclusion on line 2 of the 28% Rate         for more than 6 months and you held an 
                                               Gain Worksheet; if you excluded 60% of          interest in the entity for the entire period 
How To Report                                                      2 3                         the  entity  held  the  stock,  you  can  also 
                                               the  gain,  enter  /   of  the  exclusion;  if 
Report the sale or exchange of the QSB         you excluded 75% of the gain, enter  /1 3       elect to postpone gain if you, rather than 
stock on Form 8949, Part II, with the ap-      of the exclusion; if you excluded 100%          the pass-through entity, buy the replace-
propriate box checked, as you would if         of the gain, don't enter an amount.             ment QSB stock within the 60-day peri-
you  weren't  taking  the  exclusion.  Then    Gain from an installment sale of QSB            od. If you were a partner in a partnership 
enter  “Q”  in  column  (f)  and  enter  the   stock.    If all payments aren't received in    that  sold  or  bought  QSB  stock,  see 
amount of the excluded gain as a nega-         the year of sale, a sale of QSB stock that      box 11 of the Schedule K-1 (Form 1065) 
tive number in column (g). Put it in pa-       isn't  traded  on  an  established  securities  sent to you by the partnership; also, see 
rentheses to show it is negative. See the      market is generally treated as an install-      Regulations section 1.1045-1.
instructions for Form 8949, columns (f),       ment sale and is reported on Form 6252.         You must recognize gain to the extent 
(g), and (h). Complete all remaining col-      Report  the  long-term  gain  from  Form        the sale proceeds are more than the cost 
umns. If you are completing line 18 of         6252 on Schedule D, line 11. Figure the         of the replacement stock. Reduce the ba-
Schedule D, enter as a positive number         allowable section 1202 exclusion for the        sis of the replacement stock by any post-
the amount of your allowable exclusion         year by multiplying the total amount of         poned gain.
on  line  2  of  the  28%  Rate  Gain  Work-   the exclusion by a fraction, the numera-
sheet; if you excluded 60% of the gain,        tor  of  which  is  the  amount  of  eligible   You must make the election no later 
enter 2/ 3of the exclusion; if you exclu-
                                               gain  to  be  recognized  for  the  tax  year   than the due date (including extensions) 
ded 75% of the gain, enter  / 13of the ex-
                                               and the denominator of which is the to-         for filing your tax return for the tax year 
clusion;  if  you  excluded  100%  of  the     tal  amount  of  eligible  gain.  In  column    in  which  the  QSB  stock  was  sold.  If 
gain, don't enter an amount.                   (a) of Form 8949, Part II, enter the name       your  original  return  was  filed  on  time, 
Gain from Form 1099-DIV.            If you re- of the corporation whose stock was sold.        you can make the election on an amen-
ceived a Form 1099-DIV with a gain in          In column (f), enter “Q,” and in column         ded return filed no later than 6 months 
box 2c, part or all of that gain (which is     (g),  enter  the  amount  of  the  allowable    after the due date of your return (exclud-
also included in box 2a) may be eligible       exclusion  for  the  year  as  a  negative      ing extensions). Enter “Filed pursuant to 
for  the  section  1202  exclusion.  Report    number.  See  the  instructions  for  Form      section  301.9100-2”  at  the  top  of  the 
the  total  gain  (box  2a)  on  Schedule  D,  8949,  columns  (f),  (g),  and  (h).  If  you  amended return.
line  13.  In  column  (a)  of  Form  8949,    are  completing  line  18  of  Schedule  D, 
Part II, enter the name of the corporation     enter as a positive number the amount of        To make the election, report the sale 
whose stock was sold. In column (f), en-       your allowable exclusion for the year on        in  Part  I  or  Part  II  (depending  on  how 
ter  “Q,”  and  in  column  (g),  enter  the   line 2 of the 28% Rate Gain Worksheet;          long  you,  or  the  pass-through  entity,  if 
amount of the excluded gain as a nega-         if  you  excluded  60%  of  the  gain,  enter   applicable,  owned  the  stock)  of  Form 
tive  number.  See  the  instructions  for     2/  3 of  the  allowable  exclusion  for  the   8949 as you would if you weren't mak-
Form 8949, columns (f), (g), and (h). If       year;  if  you  excluded  75%  of  the  gain,   ing the election. Then enter “R” in col-
you  are  completing  line  18  of  Sched-     enter 1/  3of  the  allowable  exclusion  for   umn  (f).  Enter  the  amount  of  the  post-
ule  D,  enter  as  a  positive  number  the   the  year;  if  you  excluded  100%  of  the    poned gain as a negative number in col-
amount  of  your  allowable  exclusion  on     gain, don't enter an amount.                    umn (g). Put it in parentheses to show it 
                                                                                               is  negative.  See  the  instructions  for 
line 2 of the 28% Rate Gain Worksheet;         Alternative minimum tax.       If you qual-
                                                                                               Form  8949,  columns  (f),  (g),  and  (h). 
if  you  excluded  60%  of  the  gain,  enter  ify for the 50%, 60%, or 75% exclusion, 
2/  3 of  the  exclusion;  if  you  excluded                                                   Complete all remaining columns.
                                               enter 7% of your allowable exclusion for 
75% of the gain, enter  / 1of3 the exclu-
                                               the year on line 13 of Form 6251. If you        Exclusion of Gain From DC 
sion; if you excluded 100% of the gain,        qualify  for  the  100%  exclusion,  leave      Zone Assets
don't enter an amount.                         line 13 of Form 6251 blank.
Gain from Form 2439.           If you received                                                 If  you  sold  or  exchanged  a  District  of 
a Form 2439 with a gain in box 1c, part        Rollover of Gain From QSB                       Columbia  Enterprise  Zone  (DC  Zone) 
or all of that gain (which is also included    Stock                                           asset  that  you  acquired  after  1997  and 
                                                                                               before  2012  and  held  for  more  than  5 
in box 1a) may be eligible for the sec-        If you sold QSB stock (defined earlier) 
                                                                                               years,  you  may  be  able  to  exclude  the 
tion  1202  exclusion.  Report  the  total     that  you  held  for  more  than  6  months, 
                                                                                               amount of qualified capital gain that you 

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would otherwise include in income. The           Qualified  community  asset. A  quali-          during the 180-day period beginning on 
exclusion  applies  to  an  interest  in,  or    fied community asset is any of the fol-         the date the gain was realized. You may 
property of, certain businesses operating        lowing.                                         also be able to permanently exclude the 
in the District of Columbia.                          Qualified community stock.                 gain  from  the  sale  or  exchange  of  any 
                                                 •
DC Zone asset.   A DC Zone asset is any          •    Qualified community partnership            investment in a QOF if the investment is 
of the following.                                interest.                                       held for at least 10 years.
•      DC Zone business stock.                   •    Qualified  community  business                     If  you  elect  to  defer  tax  on  an 
•      DC Zone partnership interest.             property.                                       !       eligible  gain  by  investing  in  a 
•      DC Zone business property.                Qualified capital gain. Qualified capi-         CAUTION QOF, you will need to complete 
Qualified capital gain. Qualified capi-          tal  gain  is  any  gain  recognized  on  the   a Form 8997 for each year you hold the 
tal  gain  is  any  gain  recognized  on  the    sale or exchange of a qualified commun-         investment and for the year you dispose 
sale or exchange of a DC Zone asset that         ity  asset  but  doesn't  include  any  of  the of the investment. If you have held that 
is  a  capital  asset  or  property  used  in  a following.                                      investment  for  more  than  5  years,  see 
trade or business. It doesn't include any        •    Gain  attributable  to  periods  after     the instructions for Form 8997 for addi-
of the following gains.                          December 31, 2014.                              tional information regarding the basis of 
•      Gain  attributable  to  periods  after    •    Gain  treated  as  ordinary  income        that investment.
December 31, 2016.                               under section 1245.
•      Gain  treated  as  ordinary  income       •    Section  1250  gain  figured  as  if       QOF. A QOF is any investment vehicle 
under section 1245.                              section 1250 applied to all depreciation        that is organized as either a corporation 
•      Section  1250  gain  figured  as  if      rather than the additional depreciation.        or partnership for the purpose of invest-
section 1250 applied to all depreciation         •    Gain  attributable  to  real  property,    ing in eligible property that is located in 
rather than the additional depreciation.         or an intangible asset, that isn't an inte-     a qualified opportunity zone.
•      Gain  attributable  to  real  property,   gral part of a renewal community busi-          How to report.  Report the eligible gain 
or an intangible asset, that isn't an inte-      ness.                                           as you normally would on Schedule D. 
gral part of a DC Zone business.                 •    Gain from a related-party transac-         See the Form 8949 instructions for how 
•      Gain from a related-party transac-        tion. See Sales and Exchanges Between           to report the deferral. See the Form 8997 
tion. See Sales and Exchanges Between            Related  Persons  in  chapter  2  of  Pub.      instructions  for  additional  reporting  in-
Related  Persons  in  chapter  2  of  Pub.       544.                                            structions.
544.                                             How  to  report.   Report  the  sale  or  ex-   Rollover of Gain From Stock 
How  to  report.  Report  the  sale  or  ex-     change of qualified community stock or 
change of DC Zone business stock or a            a qualified community partnership inter-        Sold to ESOPs or Certain 
DC  Zone  partnership  interest  on  Form        est on Form 8949, Part II, with the ap-         Cooperatives
8949,  Part  II,  as  you  would  if  you        propriate box checked, as you would if          You can postpone all or part of any gain 
weren't taking the exclusion. Then enter         you  weren't  taking  the  exclusion.  Then     from the sale of qualified securities, held 
“X” in column (f). Enter the amount of           enter  “X”  in  column  (f)  and  enter  the    for at least 3 years, to an employee stock 
the  exclusion  as  a  negative  number  in      amount  of  the  exclusion  as  a  negative     ownership  plan  (ESOP)  or  eligible 
column (g). Put it in parentheses to show        number  in  column  (g).  Put  it  in  paren-   worker-owned  cooperative,  if  you  buy 
it  is  negative.  See  the  instructions  for   theses to show it is negative. See the in-      qualified replacement property. See Pub. 
Form  8949,  columns  (f),  (g),  and  (h).      structions  for  Form  8949,  columns  (f),     550. Also, see the instructions for Form 
Complete all remaining columns.                  (g), and (h). Complete all remaining col-       8949, columns (f), (g), and (h).
Report  the  sale  or  exchange  of  DC          umns.
Zone  business  property  on  Form  4797.        Report the sale or exchange of quali-
See  the  Form  4797  instructions  for  de-     fied  community  business  property  on 
tails.                                           Form 4797. See the Form 4797 instruc-           Specific 
                                                 tions for details.                              Instructions
Exclusion of Gain From 
Qualified Community Assets                       Deferral of Gain Invested in                    Rounding Off to Whole 
If  you  sold  or  exchanged  a  qualified       a QOF                                           Dollars
community asset that you acquired after          If you have an eligible gain, you can in-       You can round off cents to whole dollars 
2001 and before 2010 and held for more           vest that gain in a QOF and elect to de-        on your Schedule D. If you do round to 
than 5 years, you may be able to exclude         fer part or all of the gain that you would      whole  dollars,  you  must  round  all 
the qualified capital gain that you would        otherwise  include  in  income  until  you      amounts. To round, drop amounts under 
otherwise include in income. The exclu-          sell  or  exchange  the  investment  in  the    50 cents and increase amounts from 50 
sion applies to an interest in, or property      QOF or December 31, 2026, whichever             to 99 cents to the next dollar. For exam-
of, certain renewal community business-          is earlier. If you make the election, you       ple,  $1.39  becomes  $1  and  $2.50  be-
es.                                              only  include  gain  to  the  extent,  if  any, comes $3.
                                                 the amount of realized gain is more than 
                                                 the aggregate amount invested in a QOF          If  you  have  to  add  two  or  more 
                                                                                                 amounts to figure the amount to enter on 

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Capital Loss Carryover Worksheet—Lines 6 and 14                                                                                                           Keep for Your Records
Use this worksheet to figure your capital loss carryovers from 2022 to 2023 if your 2022 Schedule D, line 21, is a loss and (a) that loss is a smaller loss 
than the loss on your 2022 Schedule D, line 16;   or (b) if the amount on your 2022 Form 1040 or 1040-SR, line 15, (or your 2022 Form 1040-NR, 
line 15, if applicable) would be less than zero if you could enter a negative amount on that line. Otherwise, you don't have any carryovers. 
If you and your spouse once filed a joint return and are filing separate returns for 2023, any capital loss carryover from the joint return can be deducted 
only on the return of the spouse who actually had the loss.
If you excluded canceled debt from income in 2023, see Pub. 4681.
1.  Enter the amount from your 2022 Form 1040 or 1040-SR, line 15; or your 2022 Form 1040-NR, line 15. If 
    the amount would have been a loss if you could enter a negative number on that line, enclose the amount in 
    parentheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.   
2.  Enter the loss from your 2022 Schedule D, line 21, as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . .                           2.   
3.  Combine lines 1 and 2. If zero or less, enter -0-   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             3.   
4.  Enter the smaller of line 2 or line 3 . . . . . . . . . . . . . . . . . . . . . .           4.   
    If line 7 of your 2022 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9.
5.  Enter the loss from your 2022 Schedule D, line 7, as a positive amount                      . . . . . . . . . . . . . . . . . . . . . . . . . .       5.   
6.  Enter any gain from your 2022 Schedule D, line 15. If a loss, 
    enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.   
7.  Add lines 4 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7.   
8. Short-term capital loss carryover for 2023. Subtract line 7 from line 5. If zero or less, enter -0-. If more 
    than zero, also enter this amount on Schedule D, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   8.   
    If line 15 of your 2022 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13.
9.  Enter the loss from your 2022 Schedule D, line 15, as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . .                           9.   
10. Enter any gain from your 2022 Schedule D, line 7. If a loss, 
    enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.  
11. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . .               11.  
12. Add lines 10 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12.  
13. Long-term capital loss carryover for 2023. Subtract line 12 from line 9. If zero or less, enter -0-. If more 
    than zero, also enter this amount on Schedule D, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    13.  

a  line,  include  cents  when  adding  the             •  The  Ordinary  box  in  box  2  isn’t     from  the  proceeds  (sales  price)  in  col-
amounts and round off only the total.             checked;                                           umn  (d).  Enter  the  gain  or  loss  in  col-
                                                        •  The  QOF  box  in  box  3  isn’t          umn (h). Enter negative amounts in pa-
Disposal  of  QOF  investment. If  you            checked;                                           rentheses.
disposed  of  any  investment  in  a  QOF               •  You aren’t electing to defer income 
                                                                                                     Example  1—basis  reported  to  the 
during  the  tax  year,  check  the  box  on      due  to  an  investment  in  a  QOF  and 
                                                                                                     IRS.      You  received  a  Form  1099-B  re-
page  1  of  Schedule  D  and  see  the  In-      aren’t  terminating  deferral  from  an  in-
                                                                                                     porting the sale of stock you held for 3 
structions  for  Form  8949  for  additional      vestment in a QOF; and
                                                                                                     years. It shows proceeds (in box 1d) of 
reporting  requirements.  You  must  also               •  You don't need to make any adjust-
                                                                                                     $6,000  and  cost  or  other  basis  (in 
complete Part III of Form 8997. See the           ments to the basis or type of gain or loss 
                                                                                                     box  1e)  of  $2,000.  Box  3  is  checked, 
instructions for Form 8997 for details.           reported on Form 1099-B (or substitute 
                                                                                                     meaning  that  basis  was  reported  to  the 
                                                  statement), or to your gain or loss.
                                                                                                     IRS. You don't need to make any adjust-
Lines 1a and 8a—                                  See   How To Complete Form 8949, Col-
                                                                                                     ments to the amounts reported on Form 
Transactions Not Reported                         umns  (f)  and  (g)  in  the  Form  8949  in-
                                                                                                     1099-B  or  enter  any  codes.  This  was 
on Form 8949                                      structions for details about possible ad-
                                                                                                     your  only  2023  transaction.  Instead  of 
                                                  justments to your gain or loss.
You can report on line 1a (for short-term                                                            reporting this transaction on Form 8949, 
transactions)  or  line  8a  (for  long-term            If you choose to report these transac-       you  can  enter  $6,000  on  Schedule  D, 
transactions)  the  aggregate  totals  from       tions  on  lines  1a  and  8a,  don't  report      line  8a,  column  (d);  $2,000  in  column 
any transactions (except sales of collec-         them on Form 8949. You don't need to               (e); and $4,000 ($6,000 − $2,000) in col-
tibles) for which:                                attach a statement to explain the entries          umn (h).
• You  received  a  Form  1099-B  (or             on lines 1a and 8a and, if you e-file your         If  you  had  a  second  transaction  that 
substitute  statement)  that  shows  basis        return, you don't need to file Form 8453.          was  the  same  except  that  the  proceeds 
was  reported  to  the  IRS  and  doesn't               Figure gain or loss on each line. Sub-       were  $5,000  and  the  basis  was  $3,000, 
show any adjustments in box 1f or 1g;             tract the cost or other basis in column (e)        combine  the  two  transactions.  Enter 

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$11,000  ($6,000  +  $5,000)  on  Sched-             Lines 1b, 2, 3, 8b, 9, and 10,                       sion  of  Gain  on  Qualified  Small  Busi-
ule  D,  line  8a,  column  (d);  $5,000                                                                  ness (QSB) Stock, earlier).
                                                     Column (h)—Transactions 
($2,000  +  $3,000)  in  column  (e);  and                                                                • You  reported  in  Part  II  of  Form 
$6,000  ($11,000  −  $5,000)  in  column             Reported on Form 8949                                8949 a collectibles gain or (loss). A col-
(h).                                                 Figure  gain  or  loss  on  each  line.  First,      lectibles gain or (loss) is any long-term 
                                                     subtract  the  cost  or  other  basis  in  col-      gain  or  deductible  long-term  loss  from 
Example  2—basis  not  reported  to 
                                                     umn (e) from the proceeds (sales price)              the sale or exchange of a collectible that 
the  IRS. You  received  a  Form  1099-B 
                                                     in column (d). Then combine the result               is a capital asset.
showing proceeds (in box 1d) of $6,000 
                                                     with any adjustments in column (g). En-
and  cost  or  other  basis  (in  box  1e)  of                                                            Collectibles  include  works  of  art, 
                                                     ter the gain or loss in column (h). Enter 
$2,000.  Box  3  isn't  checked,  meaning                                                                 rugs, antiques, metals (such as gold, sil-
                                                     negative amounts in parentheses.
that  basis  wasn't  reported  to  the  IRS.                                                              ver,  and  platinum  bullion),  gems, 
Don't  report  this  transaction  on  line  1a            Example  1—gain.       Column  (d)  is          stamps,  coins,  alcoholic  beverages,  and 
or line 8a. Instead, report the transaction          $6,000 and column (e) is $2,000. Enter               certain other tangible property.
on  Form  8949.  Complete  all  necessary            $4,000 in column (h).
                                                                                                          Include  on  the  worksheet  any  gain 
pages  of  Form  8949  before  completing                 Example  2—loss.       Column  (d)  is          (but not loss) from the sale or exchange 
line 1b, 2, 3, 8b, 9, or 10 of Schedule D.           $6,000 and column (e) is $8,000. Enter               of an interest in a partnership, S corpora-
Example  3—adjustment.           You  re-            ($2,000) in column (h).                              tion, or trust held for more than 1 year 
ceived  a  Form  1099-B  showing  pro-                    Example 3—adjustment.                 Column    and  attributable  to  unrealized  apprecia-
ceeds (in box 1d) of $6,000 and cost or              (d) is $6,000, column (e) is $2,000, and             tion of collectibles. For details, see Reg-
other basis (in box 1e) of $2,000. Box 3             column  (g)  is  ($1,000).  Enter  $3,000            ulations  section  1.1(h)-1.  Also,  attach 
is  checked,  meaning  that  basis  was  re-         ($6,000  −  $2,000  −  $1,000)  in  column           the  statement  required  under  Regula-
ported  to  the  IRS.  However,  the  basis          (h).                                                 tions section 1.1(h)-1(e).
shown  in  box  1e  is  incorrect.  Don't  re-
port  this  transaction  on  line  1a  or            Line 13                                              Line 19
line 8a. Instead, report the transaction on          See Capital Gain Distributions, earlier.             If  you  checked  “Yes”  on  line  17,  com-
Form  8949.  See  the  instructions  for                                                                  plete  the Unrecaptured  Section  1250 
Form  8949,  columns  (f),  (g),  and  (h).          Line 18                                              Gain  Worksheet  in  these  instructions  if 
Complete  all  necessary  pages  of  Form            If  you  checked  “Yes”  on  line  17,  com-         any of the following apply for 2023.
8949 before completing line 1b, 2, 3, 8b,            plete  the  28%  Rate  Gain  Worksheet  in           • You sold or otherwise disposed of 
9, or 10 of Schedule D.                              these instructions if either of the follow-          section  1250  property  (generally,  real 
                                                     ing applies for 2023.                                property that you depreciated) held more 
                                                          •   You  reported  in  Part  II  of  Form       than 1 year.
                                                     8949 a section 1202 exclusion from the               • You received installment payments 
                                                     eligible  gain  on  QSB  stock  (see       Exclu-    for section 1250 property held more than 

28% Rate Gain Worksheet—Line 18                                                                             Keep for Your Records
1.   Enter the total of all collectibles gain or (loss) from items you reported on Form 8949, Part II . . . . . . . . . . . . . . . . . . . . . . .                        1.  
2.   Enter as a positive number the total of:
     •    Any section 1202 exclusion you reported in column (g) of Form 8949, Part II, with 
     code “Q” in column (f), that is 50% of the gain;
     •    2 3/  of any section 1202 exclusion you reported in column (g) of Form 8949, Part II,                                                                                
                                                                                                         . . . . . . . . . . . . . . . . . . . . . .                       2.
     with code “Q” in column (f), that is 60% of the gain; and
     •    1 3/  of any section 1202 exclusion you reported in column (g) of Form 8949, Part II, 
     with code “Q” in column (f), that is 75% of the gain.
     Don’t make an entry for any section 1202 exclusion that is 100% of the gain.
3.   Enter the total of all collectibles gain or (loss) from Form 4684, line 4 (but only if Form 4684, line 15, is more than zero); Form 
     6252; Form 6781, Part II; and Form 8824 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           3.  
4.   Enter the total of any collectibles gain reported to you on:
     •    Form 1099-DIV, box 2d;                                                                                                                                               
                                                                                                         . . . . . . . . . . . . . . . . . . . .                           4.
     •    Form 2439, box 1d; and
     •    Schedule K-1 from a partnership, S corporation, estate, or trust.
5.   Enter your long-term capital loss carryovers from Schedule D, line 14; and Schedule K-1 (Form 1041),                                                                     (   )
                                                                                                                                                                           5.
     box 11, code D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.   If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              6. (   )
7.   Combine lines 1 through 6. If zero or less, enter -0-. If more than zero, also enter this amount on 
     Schedule D, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.  

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1 year for which you are reporting gain         installment  sale  of  trade  or  business       has been used in full. Figure the amount 
on the installment method.                      property held more than 1 year.                  of  gain  treated  as  unrecaptured  section 
• You received a Schedule K-1 from                                                               1250  gain  for  installment  payments  re-
                                                Step 1. Figure the smaller of (a) the 
an estate or trust, a partnership, or an S                                                       ceived in 2023 as the smaller of (a) the 
                                                depreciation allowed or allowable, or (b) 
corporation  that  shows  “unrecaptured                                                          amount from line 26 or line 37 of your 
                                                the  total  gain  for  the  sale.  This  is  the 
section 1250 gain.”                                                                              2023 Form 6252, whichever applies; or 
                                                smaller  of  line  22  or  line  24  of  your 
• You received a Form 1099-DIV or                                                                (b)  the  amount  of  unrecaptured  section 
                                                2023  Form  4797  (or  the  comparable 
Form 2439 from a real estate investment                                                          1250 gain remaining to be reported. This 
                                                lines of Form 4797 for the year of sale) 
trust  or  regulated  investment  company                                                        amount  is  generally  the  total  unrecap-
                                                for the property.
(including  a  mutual  fund)  that  reports                                                      tured section 1250 gain for the sale re-
“unrecaptured section 1250 gain.”               Step 2. Reduce the amount figured in             duced by all gain reported in prior years 
• You  reported  a  long-term  capital          Step 1 by any section 1250 ordinary in-          (excluding  section  1250  ordinary  in-
gain from the sale or exchange of an in-        come recapture for the sale. This is the         come recapture). However, if you chose 
terest in a partnership that owned section      amount  from  line  26g  of  your  2023          not to treat all of the gain from payments 
1250 property.                                  Form  4797  (or  the  comparable  line  of       received after May 6, 1997, and before 
                                                Form 4797 for the year of sale) for the          August  24,  1999,  as  unrecaptured  sec-
Instructions for the Unrecaptured               property. The result is your total unrec-        tion 1250 gain, use only the amount you 
Section 1250 Gain Worksheet                     aptured  section  1250  gain  that  must  be     chose  to  treat  as  unrecaptured  section 
                                                allocated to the installment payments re-        1250 gain for those payments to reduce 
Lines  1  through  3. If  you  had  more        ceived from the sale.                            the total unrecaptured section 1250 gain 
than  one  property  described  on  line  1,                                                     remaining to be reported for the sale. In-
complete  lines  1  through  3  for  each       Step 3. Generally, the entire amount 
                                                                                                 clude this amount on line 4.
property on a separate worksheet. Enter         of gain from the sale of trade or business 
the  total  of  the  line  3  amounts  for  all property  included  in  each  installment 
properties on line 3 and go to line 4.          payment is treated as unrecaptured sec-
                                                tion  1250  gain  until  the  total  unrecap-
Line 4. To figure the amount to enter on 
                                                tured section 1250 gain figured in Step 2 
line  4,  follow  the  steps  below  for  each 

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Unrecaptured Section 1250 Gain Worksheet—Line 19                                                                                          Keep for Your Records
If you aren't reporting a gain on Form 4797, line 7, skip lines 1 through 9 and go to line 10.
1. If you have a section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form 4797 (but 
not on Form 6252), enter the smaller of line 22 or line 24 of Form 4797 for that property. If you didn't have any such 
property, go to line 4. If you had more than one such property, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 1.   
2. Enter the amount from Form 4797, line 26g, for the property for which you made an entry on line 1 . . . . . . . . . . . . .                                           2.   
3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       3.   
4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 from installment sales 
of trade or business property held more than 1 year. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              4.   
5. Enter the total of any amounts reported to you on a Schedule K-1 from a partnership or an S corporation as 
“unrecaptured section 1250 gain” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 5.   
6. Add lines 3 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       6.   
7. Enter the smaller of line 6 or the gain from Form 4797, line 7 . . . . . . . . . . . . . . . . . . . . .                        7.   
8. Enter the amount, if any, from Form 4797, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    8.   
9. Subtract line 8 from line 7. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               9.   
10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable to unrecaptured 
section 1250 gain. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                10.  
11. Enter the total of any amounts reported to you as “unrecaptured section 1250 gain” on a Schedule K-1, Form 
1099-DIV, or Form 2439 from an estate, a trust, a real estate investment trust, or a mutual fund (or other regulated 
investment company) or in connection with a Form 1099-R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              11.  
12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or other dispositions of 
section 1250 property held more than 1 year for which you didn't make an entry in Part I of Form 4797 for the year of 
sale. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         12.  
13. Add lines 9 through 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       13.  
14. If you had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1 
through 4 of the 28% Rate Gain Worksheet. Otherwise, enter -0- . . . . . . . . . . . . . . . . .                                   14.  
15. Enter the (loss), if any, from Schedule D, line 7. If Schedule D, line 7, is zero or a gain, 
enter -0-    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. (  )
16. Enter your long-term capital loss carryovers from Schedule D, line 14; and Schedule K-1 
(Form 1041), box 11, code D* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               16. (  )
17. Combine lines 14 through 16. If the result is a (loss), enter it as a positive amount. If the result is zero or a gain, 
enter -0-    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.  
18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. If more than zero, enter the 
result here and on Schedule D, line 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 18.  

* If you are filing Form 2555 (relating to foreign earned income), see the footnote in the Foreign Earned Income Tax 
Worksheet in the Instructions for Form 1040 before completing this line.

Line 10.  Include on line 10 your share        Installment  sales.      To  figure  the                                                is  treated  as  unrecaptured  section  1250 
of the partnership's unrecaptured section      amount to include on line 12, follow the                                                gain until the total unrecaptured section 
1250 gain that would result if the part-       steps below for each installment sale of                                                1250  gain  figured  in  Step  2  has  been 
nership had transferred all of its section     property  held  more  than  1  year  for                                                used in full. Figure the amount of gain 
1250 property in a fully taxable transac-      which you didn't make an entry in Part I                                                treated  as  unrecaptured  section  1250 
tion immediately before you sold or ex-        of your Form 4797 for the year of sale.                                                 gain  for  installment  payments  received 
changed your interest in that partnership.     • Step  1.  Figure  the  smaller  of  (a)                                               in 2023 as the smaller of (a) the amount 
If you recognized less than all of the re-     the depreciation allowed or allowable, or                                               from  line  26  or  line  37  of  your  2023 
alized gain, the partnership will be trea-     (b) the total gain for the sale. This is the                                            Form  6252,  whichever  applies;  or  (b) 
ted as having transferred only a propor-       smaller  of  line  22  or  line  24  of  your                                           the amount of unrecaptured section 1250 
tionate  amount  of  each  section  1250       2023  Form  4797  (or  the  comparable                                                  gain  remaining  to  be  reported.  This 
property.  For  details,  see  Regulations     lines of Form 4797 for the year of sale)                                                amount  is  generally  the  total  unrecap-
section  1.1(h)-1.  Also,  attach  the  state- for the property.                                                                       tured section 1250 gain for the sale re-
ment required under Regulations                • Step 2. Reduce the amount figured                                                     duced by all gain reported in prior years 
section 1.1(h)-1(e).                           in Step 1 by any section 1250 ordinary                                                  (excluding  section  1250  ordinary  in-
                                               income recapture for the sale. This is the                                              come recapture). However, if you chose 
Line  12. An  example  of  an  amount  to 
                                               amount  from  line  26g  of  your  2023                                                 not to treat all of the gain from payments 
include  on  line  12  is  unrecaptured  sec-
                                               Form  4797  (or  the  comparable  line  of                                              received after May 6, 1997, and before 
tion 1250 gain from the sale of a vaca-
                                               Form 4797 for the year of sale) for the                                                 August  24,  1999,  as  unrecaptured  sec-
tion home you previously used as a rent-
                                               property. The result is your total unrec-                                               tion 1250 gain, use only the amount you 
al property but converted to personal use 
                                               aptured  section  1250  gain  that  must  be                                            chose  to  treat  as  unrecaptured  section 
prior to the sale. To figure the amount to 
                                               allocated to the installment payments re-                                               1250 gain for those payments to reduce 
enter  on  line  12,  follow  the  applicable 
                                               ceived from the sale.                                                                   the total unrecaptured section 1250 gain 
instructions below.
                                               • Step  3.  Generally,  the  amount  of                                                 remaining to be reported for the sale. In-
                                               capital gain on each installment payment                                                clude this amount on line 12.

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Other sales or dispositions of section           recaptured  section  1250  gain  for  the    zero  if  you  could  enter  a  negative 
1250 property. For each sale of proper-          sale. Include this amount on line 12.        amount on that line.
ty held more than 1 year (for which you 
didn't  make  an  entry  in  Part  I  of  Form   Line 21                                      To  figure  any  capital  loss  carryover 
4797),  figure  the  smaller  of  (a)  the  de-  You  have  a  capital  loss  carryover  from to  2024,  you  will  use  the  Capital  Loss 
preciation  allowed  or  allowable,  or  (b)     2023  to  2024  if  you  have  a  loss  on   Carryover  Worksheet  in  the  2024  In-
the  total  gain  for  the  sale.  This  is  the line 16 and either:                          structions for Schedule D. If you want to 
smaller  of  line  22  or  line  24  of  Form    • That loss is more than the loss on         figure your carryover to 2024 now, see 
4797 for the property. Next, reduce that         line 2; or                                   Pub. 550.
amount by any section 1250 ordinary in-          • The  amount  on  Form  1040  or                You  will  need  a  copy  of  your 
come recapture for the sale. This is the         1040-SR,  line  15,  (or  Form  1040-NR,     TIP 2023  Form  1040  or  1040-SR 
amount from line 26g of Form 4797 for            line 15, if applicable) would be less than       and  Schedule  D  to  figure  your 
the  property.  The  result  is  the  total  un-                                              capital loss carryover to 2024.

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Schedule D Tax Worksheet                                                                                                                      Keep for Your Records
Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero and lines 15 and 16 of Schedule D are gains or 
if you file Form 4952 and you have an amount on line 4g, even if you don’t need to file Schedule D. Otherwise, complete the 
Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 16, (or in the instructions for Form 
1040-NR, line 16) to figure your tax. Before completing this worksheet, complete Form 1040, 1040-SR, or 1040-NR through 
line 15.
Exception: Don’t use the Qualified Dividends and Capital Gain Tax Worksheet  orthis worksheet to figure your tax if: 
    • Line 15 or line 16 of Schedule D is zero or less and you have no qualified dividends on Form 1040, 1040-SR, or 1040-NR, line 3a; 
or 
    • Form 1040, 1040-SR, or 1040-NR, line 15, is zero or less.
 Instead, see the instructions for Form 1040, line 16 (or Form 1040-NR, line 16).

1.    Enter your taxable income from Form 1040, 1040-SR, or 1040-NR, line 15. (However, if you are filing Form 
      2555 (relating to foreign earned income), enter instead the amount from line 3 of the Foreign Earned Income 
      Tax Worksheet in the instructions for Form 1040, line 16.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  1.    
2.    Enter your qualified dividends from Form 1040, 
      1040-SR, or 1040-NR, line 3a . . . . . . . . . . . . . . . . .               2.                             
3.    Enter the amount from Form 4952 
      (used to figure investment interest 
      expense deduction), line 4g  . . . . . . .             3.                    
4.    Enter the amount from Form 4952, 
      line 4e* . . . . . . . . . . . . . . . . . . . . . . . 4.                    
5.    Subtract line 4 from line 3. If zero or less, 
      enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5.                             
6.    Subtract line 5 from line 2. If zero or less, enter -0-** . . . . . . . . . . . . . . .                     6.                     
7.    Enter the smaller of line 15 or line 16 
      of Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7.                             
8.    Enter the smaller of line 3 or line 4 . . . . . . . . . . . .                8.                             
9.    Subtract line 8 from line 7. If zero or less, enter -0-** . . . . . . . . . . . . . . .                     9.                     
10.   Add lines 6 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.                    
11.   Add lines 18 and 19 of Schedule D** . . . . . . . . . . . . . . . . . . . . . . . . . . .                   11.                    
12.   Enter the smaller of line 9 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         12.                    
13.   Subtract line 12 from line 10  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13.  
14.   Subtract line 13 from line 1. If zero or less, enter -0-  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           14.  
15.   Enter:
      • $44,625 if single or married filing 
      separately;
      • $89,250 if married filing jointly or                                        . . . . . . . . . . . . . .   15.                    
      qualifying surviving spouse; or
      • $59,750 if head of household.
16.   Enter the smaller of line 1 or line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           16.  
17.   Enter the smaller of line 14 or line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . .               17.                    
18.   Subtract line 10 from line 1. If zero or less, 
      enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18.                           
19.   Enter the smaller of line 1 or: 
        •   $182,100 if single or married filing 
      separately;
        •   $364,200 if married filing jointly or               . . . . . 19.                                    
      qualifying surviving spouse; or
        •   $182,100 if head of household.
20.   Enter the smaller of line 14 or line 19 . . . . . . . . . . .                20.                           
21.   Enter the larger of line 18 or line 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         21.                    
22.   Subtract line 17 from line 16. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . .                      22.                    
      If lines 1 and 16 are the same, skip lines 23 through 43 and go to line 44. Otherwise, go to line 23.
23.   Enter the smaller of line 1 or line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . .                23.                    
24.   Enter the amount from line 22. (If line 22 is blank, enter -0-.) . . . . . . . . .                          24.                    
25.   Subtract line 24 from line 23. If zero or less, enter -0- . . . . . . . . . . . . . . .                     25.                    
26.   Enter:
      • $492,300 if single;
      • $276,900 if married filing separately;
      • $553,850 if married filing jointly or                                      . . . . . . . . . . . . . .    26.  
      qualifying surviving spouse; or
      • $523,050 if head of household.
27.   Enter the smaller of line 1 or line 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . .              27.                    
28.   Add lines 21 and 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         28.  
29.   Subtract line 28 from line 27. If zero or less, enter -0- . . . . . . . . . . . . . . .                     29.                    
30.   Enter the smaller of line 25 or line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      30.  

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Schedule D Tax Worksheet—Continued                                                                                                     Keep for Your Records
31. Multiply line 30 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31 .   
32. Add lines 24 and 30 . . . . . . . .                                                  32.  
    If lines 1 and 32 are the same, skip lines 33 through 43 and go to line 44. Otherwise, go to line 33.
33. Subtract line 32 from line 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33.  
34. Multiply line 33 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34.   
    If Schedule D, line 19, is zero or blank, skip lines 35 through 40 and go to line 41. Otherwise, go to line 35.
35. Enter the smaller of line 9 above or Schedule D, line 19 . . . . . . . . . . .       35.                                      
36. Add lines 10 and 21 . . . . . . . . . . . . . . . . . . . . . . . 36.                
37. Enter the amount from line 1 above . . . . . . . . . . .          37.                
38. Subtract line 37 from line 36. If zero or less, enter -0- . . . . . . . . . . . . .  38.                                      
39. Subtract line 38 from line 35. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . .             39.                     
40. Multiply line 39 by 25% (0.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40.     
    If Schedule D, line 18, is zero or blank, skip lines 41 through 43 and go to line 44. Otherwise, go to line 41.
41. Add lines 21, 22, 30, 33, and 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      41.                     
42. Subtract line 41 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42.                     
43. Multiply line 42 by 28% (0.28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43.     
44. Figure the tax on the amount on line 21. If the amount on line 21 is less than $100,000, use the Tax Table to 
    figure the tax. If the amount on line 21 is $100,000 or more, use the Tax Computation Worksheet . . . . . . . .                                       44.     
45. Add lines 31, 34, 40, 43, and 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45.     
46. Figure the tax on the amount on line 1. If the amount on line 1 is less than $100,000, use the Tax Table to 
    figure the tax. If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet . . . . . . . . .                                      46.     
47. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 45 
    or line 46. Also, include this amount on Form 1040, 1040-SR, or 1040-NR, line 16. (If you are filing Form 
    2555, don't enter this amount on Form 1040 or 1040-SR, line 16. Instead, enter it on line 4 of the Foreign 
    Earned Income Tax Worksheet in the Instructions for Form 1040.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       47.     

    * If applicable, enter instead the smaller amount you entered on the dotted line next to line 4e of Form 4952.
    ** If you are filing Form 2555, see the footnote in the Foreign Earned Income Tax Worksheet in the 
    instructions for Form 1040, line 16, before completing this line.

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