What Is IRS Form 8949?
Tax Form 8949 Explained
IRS Form 8949 is a tax form primarily used for reporting sales and exchanges of capital assets. Form 8949 is filed along with Schedule D of your individual federal income tax form.
Learn about all of the reasons you might need to file Form 8949 and how to complete it and Schedule D.
What Is IRS Form 8949?
Form 8949, Sales and Other Dispositions of Capital Assets, is used to report the following things to the IRS:
- The sale or exchange of a capital asset not reported on another form or schedule
- Gains from involuntary conversions (other than from casualty or theft) of capital assets not used in your trade or business
- Nonbusiness bad debts
- Worthlessness of a security
- The election to defer capital gain invested in a qualified opportunity fund (QOF)
- The disposition of interests in QOF
A QOF is an investment vehicle that files either a partnership or corporate federal income tax return and is organized for the purpose of investing in qualified opportunity zone (QOZ) property. A QOZ is an economically distressed community where new investments may be eligible for preferential tax treatment.
Corporations, partnerships, estates, and trusts would use Form 8949 for many of the same reasons.
If you are filing a joint return with your spouse, the IRS instructs you to complete multiple copies of Form 8949 (as many as are needed) to include all of the transactions. The transactions may be put on separate forms according to which one of you completed the transaction, or the transactions may be intermingled. You will enter on your Schedule D the total from all of your and your spouse's Forms 8949.
Who Uses IRS Form 8949?
Anyone who has received one or more Forms 1099-B, Proceeds From Broker and Barter Exchange Transactions; Forms 1099-S, Proceeds From Real Estate Transactions; and/or IRS-allowed substitutes for those forms should file a Form 8949. Those Forms 1099 or substitutes would also have been sent to the IRS.
You should look carefully at the Forms 1099 you've received from your broker. If the cost or other basis for all of your transactions was reported to the IRS and you don't need to make any adjustments, you may not need to file Form 8949.
Complete information on the two exceptions that enable you to forgo filling out Form 8949 is given on pages 3 and 4 of the IRS's Instructions for Form 8949.
The Forms 1099 you were sent should give you information on whether you should check Box A, B, or C for short-term transactions (page 1) or Box D, E, or F for long-term transactions (page 2) for a given transaction or set of transactions. However, if Box 2 of Form 1099 is blank and code X is in the "Applicable checkbox on Form 8949" box, you will need to determine from your own records whether the transaction was short-term or long-term.
Short-term transactions are generally those that involve assets held for a year or less; long-term transactions are generally those that involve assets held for more than a year.
There are exceptions to that general rule. For example, if you sold a property you inherited, it's always considered to be a long-term transaction, even if you owned it for a year or less.
When determining the holding period, exclude the date you entered into the transaction but include the date you exited the transaction.
Boxes A and D are for transactions reported on Forms 1099 that indicate basis was reported to the IRS. Boxes B and E are for transactions reported on Forms 1099 that indicate basis wasn't reported to the IRS. Boxes C and F are for transactions that weren't reported to you on Form 1099.
Where to Get a Form 8949
You can print a PDF of Form 8949. The form should also be available from any tax preparation software you use.
How to Fill Out and Read Form 8949
In Part I, check Box A, B, or C, depending on which reporting option applies. Under 1, enter information on all of your short-term transactions—sales and exchanges—of capital assets, including stocks, bonds, and real estate, that fit that reporting category. If you have more transactions to list than will fit on the page, you will have to fill out another 8949 with that same box checked.
Your description for each property in column (a) on Form 8949 should be based on the description given on the applicable Form 1099, if you received one.
Column (d) is for proceeds, (e) is for cost or other basis, (g) is for amount of adjustment, and (h) is for gain or loss. The gain or loss for each transaction is calculated by subtracting the cost or other basis from the proceeds and then adding or subtracting any adjustment, if applicable.
Examples of adjustments you might be required to make include increasing the basis of a property you sold by the value of any improvements you made to it and adjusting for any stock splits that occurred before you sold shares of a company. Publication 551, Basis of Assets, provides detailed information on various increases and decreases to basis.
On line 2, enter the totals of the figures in columns (d), (e), (g), and (h). Enter these same amounts on Schedule D. If you checked Box A, you'll enter the amounts on line 1b of Schedule D. If you checked Box B, you'll enter the amounts on line 2. And if you checked Box C, you'll enter the amounts on line 3.
In Part II, follow the same steps for all of your long-term transactions that fall under one of the reporting categories. Check Box D, E, or F and enter the information for all of the transactions. Add up the same columns and enter the totals on line 2 as well as on Schedule D. If you checked Box D, you'll enter the amounts on line 8b of Schedule D. If you checked Box E, you'll enter the amounts on line 9. And if you checked Box F, you'll enter the amounts on line 10.
In addition to the total gain or loss from transactions reported on your Form(s) 8949, you may have to use Schedule D to report:
- Certain transactions you don't have to report on Form 8949
- A gain from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains; Form 6252, Installment Sale Income; or Part I of Form 4797, Sales of Business Property
- A gain or loss from Form 4684, Casualties and Thefts; Form 6781, Gains and Losses From Section 1256 Contracts and Straddles; or Form 8824, Like-Kind Exchanges
- A gain or loss from a partnership, S corporation, estate, or trust
- Capital gain distributions not reported directly on line 6 of Form 1040 or 1040-SR or effectively connected capital gain distributions not reported directly on line 14 of Form 1040-NR, U.S. Nonresident Alien Income Tax Return
- A capital loss carryover from one tax year to the next
For more information on those reporting requirements for Schedule D, see Instructions for Schedule D, Capital Gains and Losses; Publication 544, Sales and Other Dispositions of Assets; and Publication 550, Investment Income and Expenses (Including Capital Gains and Losses).
Can Form 8949 Be E-Filed?
If you want to e-file your Form 8949, you must enter each transaction in separate rows of the electronic form. If you don't want to do that, you must include Form 8949 as a PDF attachment to your return or mail paper copies of both Form 8949 and Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return.
Where to Mail Form 8949
Form 8949 can be mailed along with Schedule D and your Form 1040 or Form 1040-SR to the appropriate address on page 108 of the Instructions for Form 1040 and 1040-SR.
- The primary purpose of IRS Form 8949 is to report sales and exchanges of capital assets.
- Form 8949 is filed along with Schedule D of your individual federal income tax form.
- Anyone who has received one or more Forms 1099-B, Forms 1099-S, or IRS-allowed substitutions should file a Form 8949.
- You may not need to file Form 8949 if the basis for all of your transactions was reported to the IRS and you don't need to make any adjustments to those figures.
The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.
Internal Revenue Service. "Instructions for Form 8949, Sales and Other Dispositions of Capital Assets," Page 1. Accessed Aug. 22, 2020.
Internal Revenue Service. "Opportunity Zones Frequently Asked Questions." Accessed Aug. 22, 2020.
Internal Revenue Service. "Form 8949, Sales and Other Dispositions of Capital Assets." Accessed Aug. 22, 2020.
Internal Revenue Service. "Instructions for Form 8949, Sales and Other Dispositions of Capital Assets," Page 2. Accessed Aug. 22, 2020.
Internal Revenue Service. "Instructions for Form 8949, Sales and Other Dispositions of Capital Assets," Page 5. Accessed Aug. 22, 2020.
Internal Revenue Service. "Instructions for Form 8949, Sales and Other Dispositions of Capital Assets," Page 4. Accessed Aug. 22, 2020.