Stock, Bond, and Other Capital Asset
Sales
If you sell property that is treated
as a capital asset during the year, you can't use Form 1040A or 1040EZ.
Instead, you'll have to file Form 1040. You'll also have to complete
and file Schedule D, Capital Gains and Losses and Form 8949, Sales
and Other Dispositions of Capital Assets with your Form 1040.
Property
you sold that is treated as capital assets include:
- Stocks, bonds, options and other securities
- Your home or other real estate
- Art, antiques rugs, jewelry, precious metals or other collectibles
- Property used in a trade or business or to generate income
- Capital gain distributions from mutual funds or REITS
- Musical compositions, or copyrights in musical works created
by the taxpayer, or copyrights in musical works received by the taxpayer
from the works' creator
Some of these items are first reported on another tax form,
and then the results computed on that form are transferred to the
appropriate line of Schedule D.
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Work Smart Sales of property used in a trade
or business, including business real estate, must be reported on IRS
Form 4797. See our discussion of the rules
that apply to these kinds of assets. Form 8824 is used to report like-kind exchanges and Form 6252 is used
to report installment sales. All
of these forms will separate your long-term gains and losses from
your short-term gains and losses, and they will generally require
you to transfer the amounts to Part I (short-term) and Part II (long-term)
of the Schedule D. Short-term gain or loss from Form 4797, however,
is transferred directly to Line 14 of Form 1040. |
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To report your capital gains from investment sales, you
need to know about:
Remember that special, more advantageous rules apply to
the sale of your home.
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