What is form 8949 if you sell a capital asset?

When selling a capital asset, the IRS requires you to fill out Form 8949. While you’ve probably sold plenty of capital assets, you may have never heard of Form 8949. That is likely because your accountant handles all of your tax filings or software fills in this form automatically for you. Either way, let’s go over what Form 8949 is all about.

When should I complete form 8949?

Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D. Use Form 8949 to report sales and exchanges of capital assets. Form 8949 allows you and the IRS to reconcile amounts that were reported to you and the IRS on Forms 1099-B or 1099-S (or substitute statements) with the amounts you report on your return.

What are the parts of form 8949?

Form 8949 has two parts: Part I for short-term assets and Part II for long-term assets. A short-term asset is one that was held for less than one year. A long-term asset is one held for longer than one year. Once you fill out the appropriate part of Form 8949, you can transfer the information to your Schedule D.