Investors who sold stocks, bonds, options, or other securities will have to prepare Form 8949 and Schedule D for capital gains and losses, and file them along with Form 1040. If investors file the Form 8949 and Schedule D then they will not be able to use either the 1040A or the 1040EZ form.
Use Form 8949 to report the following:
- 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 held for business or profit.
- Nonbusiness bad debts.
Use Schedule D (Form 1040) to report the following:
- To figure the overall gain or loss from transactions reported on Form 8949, and
- 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, 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, line 13 (or effectively connected capital gain distributions not reported directly on Form 1040NR, line 14), and
- To report a capital loss carryover from 2011 to 2012.
Entering in Program
Form 8949 is automatically generated based upon the individual capital gain and loss transactions entered. It is not directly accessible within the TaxACT program, but the form will be included with your printed and e-filed return. The information from Form 8949 will then transfer to Schedule D as necessary.
To enter individual capital gain or loss transactions, you will create a Form 1099-B in the program. The information entered on Form 1099-B will then transfer to the appropriate copy of Form 8949.
If you did not receive a Form 1099-B for a transaction, but the transaction still needs to be reported, you must enter this transaction information on a Form 1099-B in the TaxACT program. You will then be able to indicate that you did not receive a Form 1099-B for the transaction, and the appropriate information will transfer to Form 8949 and Schedule D.
To enter this information in the TaxACT program:
- From within your TaxACT return (Online or Desktop) click the Federal Q&A tab
- Click Investment Income to expand the category, then click Gain or loss on the sale of investments
- Click Capital gain or loss (Form 1099-B)
- Click Add to create a new copy of the form, or click Review to review a copy already created
- The program will proceed with the interview questions for you to enter or review the appropriate information. Entries will transfer to Form 8949 and Schedule D as necessary.
For information on reporting the sale of your main home, see Sale of Home. The information entered in this section for the sale of your main home will transfer to Form 8949.
For more information on entering a Form 8949 summary total in the TaxACT program, see Form 1099-B Summary Totals. When using this option, you must have a statement similar to Form 8949 that provides a listing of each transaction you need to report. This statement must contain all of the same information as Form 8949 and must be in a similar format.
TaxACT has partnered with GainsKeeper to offer its customers a solution for calculating capital gains for the Schedule D. GainsKeeper is a tax planning tool that helps investors with complicated capital gains calculations and tax implications. GainsKeeper calculates capital gains by tracking investments and adjusting portfolios for wash sales and corporate actions. The list of transactions reportable on the Form 8949 and Schedule D can be imported into TaxACT from GainsKeeper for electronic tax filing purposes.
TaxACT has also partnered with TradeLog to offer its customers a solution for calculating capital gains on Schedule D. TradeLog is the premier Schedule D / Wash Sale Generator software program for active traders and investors. TradeLog allows you to easily import the trade history from over 30 online brokers. The software then accurately matches your trades based on IRS rules and generates the reporting you need for Schedule D. The list of transactions reportable on the Form 8949 and Schedule D can be imported into TaxACT from TradeLog through a CSV file for electronic tax filing purposes.