Stock, Bond, and Other Capital Asset Sales

Tax Guide  Stock, Bond, and Other Capital Asset Sales

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Useful Items

If you sell property that is treated as a capital asset during the year, you'll have to complete and file Schedule D, Capital Gains and Losses, with your Form 1040. You can't use Form 1040A or 1040EZ. You will also have to file Form 8949, Sales and Other Dispositions of Capital Assets.

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
Did You Know?

Did You Know?

The Tax Increase Prevention and Reconciliation Act of 2005 allows taxpayers to elect to treat the sale or exchange of self-created musical compositions or copyrights as the sale or exchange of a capital asset. This special treatment is effective for sales or exchanges in tax years beginning after May 17, 2006, and before January 1, 2011.

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.

Work Smart

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.

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.

Planning Tools

Planning Tools

You can download Schedule D, Form 1040, Form 4797 and Form 6252 to aid in your financial planning.

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