Instructions for Schedule D

Department of the TreasuryInternal Revenue Service2018 Instructions for Schedule D Capital Gainsand LossesThese instructions explain how to complete Schedule D (Form 1040). Complete Form8949 before you complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D.Use Schedule D: To figure the overall gain or loss from transactions reported on Form 8949; To report certain transactions you dont have to report on Form 8949; 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, or 8824; To report a gain or loss from a partnership, S corporation, estate, or trust; To report capital gain distributions not reported directly on Schedule 1 (Form1040), line 13 (or effectively connected capital gain distributions not reported directlyon Form 1040NR, line 14); and To report a capital loss carryover from 2017 to 2018.Additional information. See Pub. 544 and Pub. 550 for more details. Section references are to the InternalRevenue Code unless otherwise noted.Future DevelopmentsFor the latest information about developments related to Schedule D and itsinstructions, such as legislation enactedafter they were published, go to IRS.gov/ScheduleD.Whats NewRollover of empowerment zone assets.The election to rollover gain from anempowerment zone asset has expired for2018.Rollovers into specialized small business investment companies (SSBICs).Tax-free rollovers of publicly traded securities gains into SSBICs are no longeravailable for sales after December 31,2017.Capital assets. For dispositions after2017, certain patents, inventions, models, or designs (whether or not patented);secret formulas or processes; or similarproperty are not capital assets. See Capital Asset, later.Special rules for capital gains investedin qualified opportunity funds(QOFs). In 2018, if you have eligiblegains and invested the gains into a QOF,you may be able to elect to postponepart or all of the gain that you wouldotherwise include in income. You mayalso be able to permanently exclude thegain from the sale or exchange of an investment in the QOF if the investment isheld for at least 10 years. For more information, see How to Report an Election to Defer Tax on Eligible Gain Invested in a QO Fund in the Instructionsfor Form 8949 and Deferral of Gain Invested in a QOF, later.Three-year holding period for applicable partnership interests. For taxyears beginning after 2017, thelong-term capital gains holding periodfor an applicable partnership interest increased from more than 1 year to morethan 3 years. The new holding periodapplies only to partnership interest heldin connection with the performance ofservices as defined in section 1061. Seesection 1061 and Pub. 541 for details.Excess business loss limitation. If youreport a loss on line 7 or line 15 of yourSchedule D (Form 1040), you may besubject to the new business loss limitation. The disallowed loss resulting fromthe limitation will not be reflected onSchedule D. Instead, use new Form 461to figure the amount to include as income on Schedule 1 (Form 1040),line 21. Any disallowed loss resultingfrom this limitation will be treated as anet operating loss (NOL) that must becarried forward and deducted in a subsequent tax year. See Form 461 and its instructions for more information on theexcess business loss limitation.GeneralInstructionsOther Forms You May HaveTo FileUse Form 461 to figure your excessbusiness loss.Use Form 8949 to report the sale orexchange of a capital asset (defined later) not reported on another form orschedule and to report the income deferral or exclusion of capital gains. See theInstructions for Form 8949. Completeall necessary pages of Form 8949 beforeyou complete line 1b, 2, 3, 8b, 9, or 10of Schedule D. See Lines 1a and 8a, later, for more information about whenForm 8949 is needed and when it isnt.Use Form 4797 to report the following.1. The sale or exchange of:a. Real property used in your tradeor business;b. Depreciable and amortizable tangible property used in your trade orbusiness (but see Disposition of Depreciable Property Not Used in Trade orBusiness in the Form 4797 instructions);c. Oil, gas, geothermal, or othermineral property; andd. Section 126 property.2. The involuntary conversion (otherthan from casualty or theft) of propertyused in a trade or business and capitalassets held more than 1 year for businessD-1Dec 21, 2018 Cat. No. 24331Ior profit. But see Disposition of Depreciable Property Not Used in Trade orBusiness in the Form 4797 instructions.3. The disposition of noncapital assets other than inventory or propertyheld primarily for sale to customers inthe ordinary course of your trade orbusiness.4. Ordinary loss on the sale, exchange, or worthlessness of small business investment company (section 1242)stock.5. Ordinary loss on the sale, exchange, or worthlessness of small business (section 1244) stock.6. Ordinary gain or loss on securities or commodities held in connectionwith your trading business, if you previously made a mark-to-market election.See Traders in Securities, later.Use Form 4684 to report involuntaryconversions of property due to casualtyor theft.Use Form 6781 to report gains andlosses from section 1256 contracts andstraddles.Use Form 8824 to report like-kindexchanges. A like-kind exchange occurswhen you exchange business or investment property for property of a likekind.Use Form 8960 to figure any net investment income tax relating to gainsand losses reported on Schedule D, including gains and losses from a securities trading activity.Capital AssetMost property you own and use for personal purposes or investment is a capitalasset. For example, your house, furniture, car, stocks, and bonds are capitalassets. A capital asset is any propertyowned by you except the following.1. Stock in trade or other propertyincluded in inventory or held mainly forsale to customers. But see the Tip aboutcertain musical compositions or copyrights, later.2. Accounts or notes receivable:a. For services rendered in the ordinary course of your trade or business,b. For services rendered as an employee, orc. From the sale of stock in trade orother property included in inventory orheld mainly for sale to customers.3. Depreciable property used in yourtrade or business, even if it is fully depreciated.4. Real estate used in your trade orbusiness.5. For dispositions after December31, 2017, certain patents, inventions,models, or designs (whether or not patented); secret formulas or processes; orsimilar property. See section 1221(a)(3).6. A copyright; a literary, musical,or artistic composition; a letter or memorandum; or similar property that is:a. Created by your personal efforts;b. Prepared or produced for you (inthe case of a letter, memorandum, orsimilar property); orc. Received under circumstances(such as by gift) that entitle you to thebasis of the person who created theproperty or for whom the property wasprepared or produced.But see the Tip about certain musicalcompositions or copyrights below.7. A U.S. Government publication,including the Congressional Record, thatyou received from the government forless than the normal sales price, or thatyou received under circumstances thatentitle you to the basis of someone whoreceived the publication for less than thenormal sales price.8. Certain commodities derivativefinancial instruments held by a dealerand connected to the dealers activitiesas a dealer. See section 1221(a)(6).9. Certain hedging transactions entered into in the normal course of yourtrade or business. See section 1221(a)(7).10. Supplies regularly used in yourtrade or business.You can elect to treat as capitalassets certain musical compositions or copyrights you sold orexchanged. See Pub. 550 for details.Basis and RecordkeepingBasis is the amount of your investmentin property for tax purposes. The basisof property you buy is usually its cost.There are special rules for certain kindsTIPof property, such as inherited property.You need to know your basis to figureany gain or loss on the sale or other disposition of the property. You must keepaccurate records that show the basis and,if applicable, adjusted basis of yourproperty. Your records should show thepurchase price, including commissions;increases to basis, such as the cost ofimprovements; and decreases to basis,such as depreciation, nondividend distributions on stock, and stock splits.If you received a Schedule A to Form8971 from an executor of an estate orother person required to file an estate taxreturn, you may be required to report abasis consistent with the estate tax valueof the property.For more information on consistentbasis reporting and basis generally, seeColumn (e)Cost or Other Basis in theInstructions for Form 8949, and the following publications. Pub. 551, Basis of Assets. Pub. 550, Investment Income andExpenses (Including Capital Gains andLosses).Short- or Long-Term Gain orLossReport short-term gains or losses in PartI. Report long-term gains or losses inPart II. The holding period forshort-term capital gains and losses isgenerally 1 year or less. The holding period for long-term capital gains and losses is generally more than 1 year. However, beginning in 2018, the long-termholding period for certain gains with respect to applicable partnership interests is more than 3 years. See Pub. 541for more information.For more information about holdingperiods, see the Instructions for Form8949.Capital Gain DistributionsThese distributions are paid by a mutualfund (or other regulated investmentcompany) or real estate investment trustfrom its net realized long-term capitalgains. Distributions of net realizedshort-term capital gains arent treated ascapital gains. Instead, they are includedon Form 1099-DIV as ordinary dividends.D-2Enter on Schedule D, line 13, the total capital gain distributions paid to youduring the year, regardless of how longyou held your investment. This amountis shown in box 2a of Form 1099-DIV.If there is an amount in box 2b, include that amount on line 11 of the Unrecaptured Section 1250 Gain Worksheet in these instructions if you complete line 19 of Schedule D.If there is an amount in box 2c, seeExclusion of Gain on Qualified SmallBusiness (QSB) Stock, later.If there is an amount in box 2d, include that amount on line 4 of the 28%Rate Gain Worksheet in these instructions if you complete line 18 of Schedule D.If you received capital gain distributions as a nominee (that is, they werepaid to you but actually belong to someone else), report on Schedule D, line 13,only the amount that belongs to you. Attach a statement showing the fullamount you received and the amountyou received as a nominee. See the Instructions for Schedule B to learn aboutthe requirement for you to file Forms1099-DIV and 1096.Sale of Your HomeYou may not need to report the sale orexchange of your main home. If youmust report it, complete Form 8949 before Schedule D.Report the sale or exchange of yourmain home on Form 8949 if: You cant exclude all of your gainfrom income, or You received a Form 1099-S forthe sale or exchange.Any gain you cant exclude is taxable.Generally, if you meet the following twotests, you can exclude up to $250,000 ofgain. If both you and your spouse meetthese tests and you file a joint return,you can exclude up to $500,000 of gain(but only one spouse needs to meet theownership requirement in Test 1).Test 1. During the 5-year period endingon the date you sold or exchanged yourhome, you owned it for 2 years or more(the ownership requirement) and lived init as your main home for 2 years or more(the use requirement).Test 2. You havent excluded gain onthe sale or exchange of another mainhome during the 2-year period ending onthe date of the sale or exchange of yourhome.Reduced exclusion. Even if you dontmeet one or both of the above two tests,you still can claim an exclusion if yousold or exchanged the home because ofa change in place of employment,health, or certain unforeseen circumstances. In this case, the maximum amountof gain you can exclude is reduced. Formore information, see Pub. 523.Sale of home by surviving spouse. Ifyour spouse died before the sale or exchange, you can still exclude up to$500,000 of gain if: The sale or exchange is no laterthan 2 years after your spouses death; Just before your spouses death,both spouses met the use requirement ofTest 1, at least one spouse met the ownership requirement of Test 1, and bothspouses met Test 2; and You didnt remarry before the saleor exchange.Exceptions to Test 1. You can chooseto have the 5-year test period for ownership and use in Test 1 suspended duringany period you or your spouse serve outside the United States as a Peace Corpsvolunteer or serve on qualified officialextended duty as a member of the uniformed services or Foreign Service ofthe United States, as an employee of theintelligence community, or outside theUnited States as an employee of thePeace Corps. This means you may beable to meet Test 1 even if, because ofyour service, you didnt actually use thehome as your main home for at least therequired 2 years during the 5-year periodending on the date of sale. The 5-yearperiod cant be extended for more than10 years.Example. Tamara buys a house inVirginia in 2006 that she uses as hermain home for 3 years. For 8 years,from 2009 through 2017, Tamara serveson qualified official extended duty as amember of the uniformed services inKuwait. In 2018, Tamara sells thehouse. Tamara didnt use the house asher main home for 2 of the 5 years before the sale. To meet Test 1, Tamaraelects to suspend the 5-year test periodduring her 8-year period of uniformedservice in Kuwait. Because that 8-yearperiod wont be counted in determiningif she used the house as her main homefor 2 of the 5 years before the sale, shemeets the ownership and use requirements of Test 1.Qualified extended duty. You are onqualified extended duty if: You are called or ordered to activeduty for an indefinite period or for a period of more than 90 days; and You are serving at a duty station atleast 50 miles from your main home, oryou are living in government quartersunder government orders.Sale of home acquired in a like-kindexchange. You cant exclude any gainif: You acquired your home in alike-kind exchange in which all or partof the gain wasnt recognized, and You sold or exchanged the homeduring the 5-year period beginning onthe date you acquired it.How to report the sale of your mainhome. If you have to report the sale orexchange, report it on Form 8949. If thegain or loss is short term, report it inPart I of Form 8949 with box Cchecked. If the gain or loss is long term,report it in Part II of Form 8949 withbox F checked.If you had a gain and can excludepart or all of it, enter H in column (f)of Form 8949. Enter the exclusion as anegative number (in parentheses) in column (g) of Form 8949. See the instructions for Form 8949, columns (f), (g),and (h). Complete all columns.If you had a loss but have to reportthe sale or exchange because you got aForm 1099-S, see Nondeductible Losses,later, for instructions about how to report it.More information. See Pub. 523 foradditional details, including how to figure and report any taxable gain if: You (or your spouse if married)used any part of the home for businessor rental purposes after May 6, 1997, or There was a period of time after2008 when the home wasnt your mainhome.Partnership InterestsA sale or other disposition of an interestin a partnership may result in ordinaryincome, collectibles gain (28% rategain), or unrecaptured section 1250gain. For details on 28% rate gain, seethe instructions for line 18. For detailsD-3on unrecaptured section 1250 gain, seethe instructions for line 19.Capital Assets Held forPersonal UseGenerally, gain from the sale or exchange of a capital asset held for personal use is a capital gain. Report it onForm 8949 with box C checked (if thetransaction is short term) or box Fchecked (if the transaction is long term).However, if you converted depreciableproperty to personal use, all or part ofthe gain on the sale or exchange of thatproperty may have to be recaptured asordinary income. Use Part III of Form4797 to figure the amount of ordinaryincome recapture. The recapture amountis included on line 31 (and line 13) ofForm 4797. Dont enter any gain fromthis property on line 32 of Form 4797. Ifyou arent completing Part III for anyother properties, enter N/A on line 32.If the total gain is more than the recapture amount, enter From Form 4797 incolumn (a) of Part I of Form 8949 (if thetransaction is short term) or Part II ofForm 8949 (if the transaction is longterm), and skip columns (b) and (c). Incolumn (d) of Form 8949, enter the excess of the total gain over the recaptureamount. Leave columns (e) through (g)blank. Complete column (h). Be sure tocheck box C at the top of Part I or box Fat the top of Part II of this Form 8949(depending on how long you held the asset).Loss from the sale or exchange of acapital asset held for personal use isntdeductible. But if you had a loss fromthe sale or exchange of real estate heldfor personal use for which you receiveda Form 1099-S, you must report thetransaction on Form 8949 even thoughthe loss isnt deductible.Example. You have a loss on thesale of a vacation home that isnt yourmain home and you received a Form1099-S for the transaction. Report thetransaction in Part I or Part II of Form8949, depending on how long youowned the home. Complete all columns.Because the loss isnt deductible, enterL in column (f). Enter the differencebetween column (d) and column (e) as apositive amount in column (g). Thencomplete column (h). (For example, ifyou entered $5,000 in column (d) and$6,000 in column (e), enter $1,000 incolumn (g). Then enter -0- ($5,000 $6,000 + $1,000) in column (h). Be sureto check box C at the top of Part I or boxF at the top of Part II of this Form 8949(depending on how long you owned thehome).)Capital LossesYou can deduct capital losses up to theamount of your capital gains plus $3,000($1,500 if married filing separately).You may be able to use capital lossesthat exceed this limit in future years. Fordetails, see the instructions for line 21.Be sure to report all of your capital gainsand losses even if you cant use all ofyour losses in 2018.Nondeductible LossesDont deduct a loss from a sale or exchange between certain related parties.This includes a direct or indirect sale orexchange of property between any of thefollowing. Members of a family. A corporation and an individualwho directly (or indirectly) owns morethan 50% of the corporations stock (unless the loss is from a distribution incomplete liquidation of a corporation). A grantor and a fiduciary of atrust. A fiduciary and a beneficiary ofthe same trust. A fiduciary of a trust and a fiduciary (or beneficiary) of another trust ifboth trusts were created by the samegrantor. An executor of an estate and a beneficiary of that estate, unless the sale orexchange was to satisfy a pecuniary bequest (that is, a bequest of a sum ofmoney). An individual and a tax-exempt organization controlled directly (or indirectly) by the individual or the individuals family.See Pub. 544 for more details onsales and exchanges between relatedparties.Report a transaction that results in anondeductible loss in Part I or Part II ofForm 8949 (depending on how long youheld the property). Unless you receiveda Form 1099-B for the sale or exchange,check box C at the top of Part I or box Fat the top of Part II of this Form 8949(depending on how long you owned theproperty). Complete all columns. Because the loss isnt deductible, enter Lin column (f). Enter the amount of thenondeductible loss as a positive numberin column (g). Complete column (h).See the instructions for Form 8949, columns (f), (g), and (h).Example 1. You sold land you heldas an investment for 5 years to yourbrother for $10,000. Your basis was$15,000. On Part II of Form 8949, checkbox F at the top. Enter $10,000 on Form8949, Part II, column (d). Enter $15,000in column (e). Because the loss isnt deductible, enter L in column (f) and$5,000 (the difference between $10,000and $15,000) in column (g). In column(h), enter -0- ($10,000 $15,000 +$5,000). If this is your only transactionon this Form 8949, enter $10,000 onSchedule D, line 10, column (d). Enter$15,000 in column (e) and $5,000 incolumn (g). In column (h), enter -0-($10,000 $15,000 + $5,000).Example 2. You received a Form1099-B showing proceeds (sales price)of $1,000 and basis of $5,000. Box 7 onForm 1099-B is checked, indicating thatyour loss of $4,000 ($1,000 $5,000)isnt allowed. On the top of Form 8949,check box A or box B in Part I or box Dor box E in Part II (whichever applies).Enter $1,000 in column (d) and $5,000in column (e). Because the loss isnt deductible, enter L in column (f) and$4,000 (the difference between $1,000and $5,000) in column (g). In column(h), enter -0- ($1,000 $5,000 +$4,000).At-risk rules. If you disposed of (a) anasset used in an activity to which theat-risk rules apply, or (b) any part ofyour interest in an activity to which theat-risk rules apply, and you haveamounts in the activity for which youarent at risk, see the Instructions forForm 6198.Passive activity rules. If the loss is allowable under the at-risk rules, it may besubject to the passive activity rules. SeeForm 8582 and its instructions for details on reporting capital gains and losses from a passive activity.Items for Special Treatment Transactions by a securities dealer.See section 475 and Rev. Rul. 97-39,which begins on page 4 of Internal Revenue Bulletin 1997-39 at IRS.gov/pub/irs-irbs/irb97-39.pdf.D-4 Bonds and other debt instruments.See Pub. 550. Certain real estate subdivided forsale that may be considered a capital asset. See section 1237. Gain on the sale of depreciableproperty to a more-than-50%-owned entity or to a trust of which you are a beneficiary. See Pub. 544. Gain on the disposition of stock indomestic international sales corporations. See section 995(c). Gain on the sale or exchange ofstock in certain foreign corporations.See section 1248. Transfer of property to a partnership that would be treated as an investment company if it were incorporated.See Pub. 541. Sales of stock received under aqualified public utility dividend reinvestment plan. See Pub. 550. Transfer of appreciated property toa political organization. See section 84. Transfer of property by a U.S. person to a foreign estate or trust. See section 684. If you give up your U.S. citizenship, you may be treated as having soldall your property for its fair market value on the day before you gave up yourcitizenship. This also applies tolong-term U.S. residents who cease to belawful permanent residents. For details,exceptions, and rules for reporting thesedeemed sales, see Pub. 519 and Form8854. In general, no gain or loss is recognized on the transfer of property from anindividual to a spouse or a formerspouse if the transfer is incident to a divorce. See Pub. 504. Amounts received on the retirement of a debt instrument generally aretreated as received in exchange for thedebt instrument. See Pub. 550. Any loss on the disposition of converted wetland or highly erodible cropland that is first used for farming afterMarch 1, 1986, is reported as along-term capital loss on Form 8949, butany gain is reported as ordinary incomeon Form 4797. If qualified dividends that you reported on Form 1040, line 3a, or Form1040NR, line 10b, include extraordinarydividends, any loss on the sale or exchange of the stock is a long-term capital loss to the extent of the extraordinarydividends. An extraordinary dividend isa dividend that equals or exceeds 10%(5% in the case of preferred stock) ofyour basis in the stock. Amounts received by shareholdersin corporate liquidations. See Pub. 550. Cash received in lieu of fractionalshares of stock as a result of a stock splitor stock dividend. See Pub. 550. Load charges to acquire stock in aregulated investment company (including a mutual fund), which may not betaken into account in determining gainor loss on certain dispositions of thestock if reinvestment rights were exercised. See Pub. 550. The sale or exchange of S corporation stock or an interest in a partnershipor trust held for more than 1 year, whichmay result in collectibles gain (28% rategain). See the instructions for line 18. Gain or loss on the disposition ofsecurities futures contracts. See Pub.550. Gain on the constructive sale ofcertain appreciated financial positions.See Pub. 550. Certain constructive ownershiptransactions. Gain in excess of the gainyou would have recognized if you hadheld a financial asset directly during theterm of a derivative contract must betreated as ordinary income. See section1260. If any portion of the constructiveownership transaction was open in anyprior year, you may have to pay interest.See section 1260(b) for details, including how to figure the interest. Includethe interest as an additional tax onSchedule 4 (Form 1040), line 62. Checkbox c and in the space next to that box,enter Section 1260(b) interest and theamount of the interest. If you are filingForm 1040NR, include the interest as anadditional tax on line 60. Check box band, in the space next to that box, enterSection 1260(b) interest and theamount of the interest. This interest isntdeductible. Gain or loss from the dispositionof stock or other securities in an investment club. See Pub. 550. Certain virtual currencies, such asBitcoin. See Notice 2014-21, 2014-16I.R.B. 938, available at IRS.gov/irb/2014-16_IRB/ar12.html. If you are deferring eligible gainby investing in a QOF, report the gainon the form you normally report the gainand report the deferral on Form 8949.See How to Report an Election to DeferTax on Eligible Gain Invested in a QOFund in the Form 8949 instructions.Market Discount BondsIn general, a capital gain from the disposition of a market discount bond is treated as interest income to the extent ofaccrued market discount as of the dateof disposition. See sections 1276through 1278 and Pub. 550 for more information on market discount. See theInstructions for Form 8949 for detailedinformation about how to report the disposition of a market discount bond.Contingent Payment DebtInstrumentsAny gain recognized on the sale, exchange, or retirement of a taxable contingent payment debt instrument subjectto the noncontingent bond method istreated as interest income rather than ascapital gain, even if you hold the debtinstrument as a capital asset. If you sella taxable contingent payment debt instrument subject to the noncontingentbond method at a loss, your loss is an ordinary loss to the extent of your priororiginal issue discount (OID) inclusionson the debt instrument. If the debt instrument is a capital asset, treat any lossthat is more than your prior OID inclusions as a capital loss. See Regulationssection 1.1275-4(b) for exceptions tothese rules.If you received a Form 1099-B (orsubstitute statement) reporting the saleof a taxable contingent payment debt instrument subject to the noncontingentbond method and the Ordinary box inbox 2 is checked, an adjustment may berequired. Report the transaction on Form8949 and complete the forms Worksheet for Contingent Payment Debt Instrument Adjustment in Column (g) tofigure the adjustment to enter in column(g) of Form 8949.See Pub. 550 or Pub. 1212 for moredetails on any special rules or adjustments that might apply.Wash SalesA wash sale occurs when you sell orotherwise dispose of stock or securities(including a contract or option to acquireor sell stock or securities) at a loss and,within 30 days before or after the sale ordisposition, you:D-51. Buy substantially identical stockor securities,2. Acquire substantially identicalstock or securities in a fully taxabletrade,3. Enter into a contract or option toacquire substantially identical stock orsecurities, or4. Acquire substantially identicalstock or securities for your individual retirement arrangement (IRA) or RothIRA.You cant deduct losses from washsales unless the loss was incurred in theordinary course of your business as adealer in stock or securities. The basis ofthe substantially identical property (orcontract or option to acquire such property) is its cost increased by the disallowed loss (except in the case of (4)above).These wash sale rules dont apply to aredemption of shares in a floating-NAV(net asset value) money market fund.If you received a Form 1099-B (orsubstitute statement), box 1g of thatform generally will show whether therewas any nondeductible wash sale lossand its amount if: The stock or securities sold werecovered securities (defined in the instructions for Form 8949, column (e)),and The substantially identical stock orsecurities you bought had the same CUSIP number as the stock or securitiesyou sold and were bought in the sameaccount as the stock or securities yousold. (CUSIP numbers are security identification numbers.)However, you cant deduct a loss from awash sale even if it isnt reported onForm 1099-B (or substitute statement).For more details on wash sales, see Pub.550.Report a wash sale transaction in PartI or Part II (depending on how long youowned the stock or securities) of Form8949 with the appropriate box checked.Complete all columns. Enter W in column (f). Enter as a positive number incolumn (g) the amount of the loss not allowed. See the instructions for Form8949, columns (f), (g), and (h).Traders in SecuritiesYou are a trader in securities if you areengaged in the business of buying andselling securities for your own account.To be engaged in business as a trader insecurities, all of the following statements must be true. You must seek to profit from dailymarket movements in the prices of securities and not from dividends, interest,or capital appreciation. Your activity must be substantial. You must carry on the activitywith continuity and regularity.The following facts and circumstances should be considered in determiningif your activity is a business. Typical holding periods for securities bought and sold. The frequency and dollar amountof your trades during the year. The extent to which you pursue theactivity to produce income for a livelihood. The amount of time you devote tothe activity.You are considered an investor, andnot a trader, if your activity doesnt meetthe above definition of a business. Itdoesnt matter whether you call yourselfa trader or a day trader.Like an investor, a trader generallymust report each sale of securities (taking into account commissions and anyother costs of acquiring or disposing ofthe securities) on Form 8949 unless oneof the exceptions described in the Instructions for Form 8949 applies. However, if a trader previously made themark-to-market election (explained below), each transaction is reported in PartII of Form 4797 instead of on Form8949. Regardless of whether a trader reports his or her gains and losses on Form8949 or Form 4797, the gain or lossfrom the disposition of securities isnttaken into account when figuring netearnings from self-employment onSchedule SE. See the Instructions forSchedule SE for an exception that applies to section 1256 contracts.The limitation on investment interestexpense that applies to investors doesntapply to interest paid or incurred in atrading business. A trader reports interest expense and other expenses (excluding commissions and other costs of acquiring or disposing of securities) from atrading business on Schedule C (insteadof Schedule A).A trader also may hold securities forinvestment. The rules for investors generally will apply to those securities. Allocate interest and other expenses between your trading business and your investment securities.Mark-to-Market Election forTradersA trader may make an election undersection 475(f) to report all gains and losses from securities held in connectionwith a trading business as ordinary income (or loss), including those from securities held at the end of the year. Securities held at the end of the year aremarked-to-market by treating them asif they were sold for fair market valueon the last business day of the year.Generally, the election must be made bythe due date (not including extensions)of the tax return for the year prior to theyear for which the election becomes effective. To be effective for 2018, theelection must have been made by thedue date of your 2017 return (not counting extensions), April 17, 2018, for mostpeople. The due date for the 2018 election was April 17, instead of April 15,because of the Emancipation Day holiday in the District of Columbia (even ifyou didnt live in the District of Columbia).Starting with the year the election becomes effective, a trader reports allgains and losses from securities held inconnection with the trading business, including securities held at the end of theyear, in Part II of Form 4797. If you previously made the election, see the Instructions for Form 4797. For details onmaking the mark-to-market election for2019, see Pub. 550 or Rev. Proc. 99-17,which starts on the bottom of page 52 ofInternal Revenue Bulletin 1999-7 atIRS.gov/pub/irs-irbs/irb99-07.pdf.If you hold securities for investment,you must identify them as such in yourrecords on the day you acquired them(for example, by holding the securitiesin a separate brokerage account). Securities that you hold for investment arentmarked-to-market.Short SalesA short sale is a contract to sell propertyyou borrowed for delivery to a buyer. Ata later date, you either buy substantiallyidentical property and deliver it to theD-6lender or deliver property that you heldbut didnt want to transfer at the time ofthe sale.Example. You think the value ofXYZ stock will drop. You borrow 10shares from your broker and sell themfor $100. This is a short sale. You laterbuy 10 shares for $80 and deliver themto your broker to close the short sale.Your gain is $20 ($100 $80).Holding period. Usually, your holdingperiod is the amount of time you actually held the property eventually deliveredto the broker or lender to close the shortsale. However, your gain when closing ashort sale is short term if you (a) heldsubstantially identical property for 1year or less on the date of the short sale,or (b) acquired property substantiallyidentical to the property sold short afterthe short sale but on or before the dateyou close the short sale. If you held substantially identical property for morethan 1 year on the date of a short sale,any loss realized on the short sale is along-term capital loss, even if the property used to close the short sale was held1 year or less.Reporting a short sale. Report anyshort sale on Form 8949 in the year itcloses.If a short sale closed in 2018 but youdidnt get a 2018 Form 1099-B (or substitute statement) for it because you entered into it before 2011, report it onForm 8949 in Part I with box C checkedor Part II with box F checked (whichever applies). In column (a), enter (for example) 100 sh. XYZ Co.2010 shortsale closed. Fill in the other columnsaccording to their instructions. Reportthe short sale the same way if you received a 2018 Form 1099-B (or substitute statement) that doesnt show proceeds (sales price).Gain or Loss From OptionsReport on Form 8949 gain or loss fromthe closing or expiration of an optionthat isnt a section 1256 contract but is acapital asset in your hands. If an optionyou purchased expired, enter the expiration date in column (c) and enter EXPIRED in column (d). If an option thatwas granted (written) expired, enter theexpiration date in column (b) and enterEXPIRED in column (e). Fill in theother columns according to their instructions. See Pub. 550 for details.If a call option you sold after 2013was exercised, the option premium youreceived will be reflected in the proceeds shown in box 1d of the Form1099-B (or substitute statement) you received. If you sold the call option before2014, the option premium you receivedmay not be reflected on Form 1099-B. Ifit isnt, enter the premium as a positivenumber in column (g) of Form 8949.Enter E in column (f).Example. For $10 in 2013, you soldJoe an option to buy one share of XYZstock for $80. Joe later exercised the option. The Form 1099-B you get showsthe proceeds to be $80. Enter $80 in column (d) of Form 8949. Enter E in column (f) and $10 in column (g). Complete the other columns according to theinstructions.NAV Method for MoneyMarket FundsIf you have a capital gain or loss determined under the net asset value (NAV)method with respect to shares in anNAV money market fund, report thecapital gain or loss on Form 8949, Part I,with box C checked. Enter the name ofeach fund followed by (NAV) in column (a). Enter the net gain or loss incolumn (h). Leave all other columnsblank. See the Instructions for Form8949.Undistributed Capital GainsInclude on Schedule D, line 11, theamount from box 1a of Form 2439. Thisrepresents your share of the undistributed long-term capital gains of the regulated investment company (including amutual fund) or real estate investmenttrust.If there is an amount in box 1b ofForm 2439, include that amount online 11 of the Unrecaptured Section1250 Gain Worksheet if you completeline 19 of Schedule D.If there is an amount in box 1c ofForm 2439, see Exclusion of Gain onQualified Small Business (QSB) Stock,later.If there is an amount in box 1d ofForm 2439, include that amount online 4 of the 28% Rate Gain Worksheetif you complete line 18 of Schedule D.Include on Schedule 5 (Form 1040),line 74, or Form 1040NR, line 69, thetax paid as shown in box 2 of Form2439. Also check the box for Form2439. Add to the basis of your stock theexcess of the amount included in incomeover the amount of the credit for the taxpaid. See Pub. 550 for details.Installment SalesIf you sold property (other than publiclytraded stocks or securities) at a gain andyou will receive a payment in a tax yearafter the year of sale, you generally mustreport the sale on the installment methodunless you elect not to. Use Form 6252to report the sale on the installmentmethod. Also use Form 6252 to reportany payment received in 2018 from asale made in an earlier year that you reported on the installment method.To elect out of the installment method, report the full amount of the gain onForm 8949 on a timely filed return (including extensions) for the year of thesale. If your original return was filed ontime, you can make the election on anamended return filed no later than 6months after the due date of your return(excluding extensions). Write Filedpursuant to section 301.9100-2 at thetop of the amended return.Demutualization of LifeInsurance CompaniesDemutualization of a life insurancecompany occurs when a mutual life insurance company changes to a stockcompany. If you were a policyholder orannuitant of the mutual company, youmay have received either stock in thestock company or cash in exchange foryour equity interest in the mutual company.If the demutualization transactionqualifies as a tax-free reorganization, nogain or loss is recognized on the exchange of your equity interest in the mutual company for stock. The companycan advise you if the transaction is atax-free reorganization. Your holdingperiod for the new stock includes the period you held an equity interest in themutual company. If you received cash inexchange for your equity interest, youmust recognize any capital gain. If youheld the equity interest for more than 1year, report the gain as a long-term capital gain in Part II of Form 8949. If youheld the equity interest for 1 year or less,report the gain as a short-term capitalD-7gain in Part I of Form 8949. Be sure theappropriate box is checked at the top ofForm 8949.If the demutualization transactiondoesnt qualify as a tax-free reorganization, you must recognize a capital gainor loss. If you held the equity interest formore than 1 year, report the gain or lossas a long-term capital gain or loss in PartII of Form 8949. If you held the equityinterest for 1 year or less, report the gainor loss as a short-term capital gain orloss in Part I of Form 8949. Be sure theappropriate box is checked at the top ofForm 8949. Your holding period for thenew stock begins on the day after youreceived the stock.Small Business (Section1244) StockReport an ordinary loss from the sale,exchange, or worthlessness of smallbusiness (section 1244) stock on Form4797. However, if the total loss is morethan the maximum amount that can betreated as an ordinary loss for the year($50,000 or, on a joint return,$100,000), also report the transaction onForm 8949 as follows.1. In column (a), enter Capital portion of section 1244 stock loss.2. Complete columns (b) and (c) asyou normally would.3. In column (d), enter the entiresales price of the stock sold.4. In column (e), enter the entire basis of the stock sold.5. Enter S in column (f). See theinstructions for Form 8949, columns (f),(g), and (h).6. In column (g), enter the loss youclaimed on Form 4797 for this transaction. Enter it as a positive number.7. Complete column (h) accordingto its instructions.Report the transaction in Part I orPart II of Form 8949 (depending on howlong you held the stock) with the appropriate box checked.Example. You sold section 1244stock for $1,000. Your basis was$60,000. You had held the stock for 3years. You can claim $50,000 of yourloss as an ordinary loss on Form 4797.To claim the rest of the loss on Form8949, check the appropriate box at thetop. Enter $1,000 on Form 8949, Part II,column (d). Enter $60,000 in column(e). Enter S in column (f) and $50,000(the ordinary loss claimed on Form4797) in column (g). In column (h), enter ($9,000) ($1,000 $60,000 +$50,000). Put it in parentheses to show itis a negative amount.Exclusion of Gain onQualified Small Business(QSB) StockSection 1202 allows you to exclude aportion of the eligible gain on the sale orexchange of QSB stock. The section1202 exclusion applies only to QSBstock held for more than 5 years. If youacquired the QSB stock on or beforeFebruary 17, 2009, you can exclude upto 50% of the qualified gain. However,you can exclude up to 60% of the qualified gain on certain empowerment zonebusiness stock. See Empowerment ZoneBusiness Stock, later.If you acquired the QSB stock afterFebruary 17, 2009, and before September 28, 2010, you can exclude up to 75%of the qualified gain.If you acquired the QSB stock afterSeptember 27, 2010, you can exclude upto 100% of the qualified gain.To be QSB stock, the stock mustmeet all of the following tests.1. It must be stock in a C corporation (that is, not S corporation stock).2. It must have been originally issued after August 10, 1993.3. As of the date the stock was issued, the corporation was a domestic Ccorporation with total gross assets of$50 million or less (a) at all times afterAugust 9, 1993, and before the stockwas issued, and (b) immediately afterthe stock was issued. Gross assets include those of any predecessor of thecorporation. All corporations that aremembers of the same parent-subsidiarycontrolled group are treated as one corporation.4. You must have acquired the stockat its original issue (either directly orthrough an underwriter), either in exchange for money or other property(other than stock) or as pay for services(other than as an underwriter) to the corporation. In certain cases, you may meetthis test if you acquired the stock fromanother person who met the test (such asby gift or inheritance) or through a conversion or exchange of QSB stock youheld.5. During substantially all the timeyou held the stock:a. The corporation was a C corporation;b. At least 80% of the value of thecorporations assets were used in the active conduct of one or more qualifiedbusinesses (defined next); andc. The corporation wasnt a foreigncorporation, DISC, former DISC, regulated investment company, real estate investment trust, REMIC, FASIT, cooperative, or a corporation that has made (orthat has a subsidiary that has made) asection 936 election.SSBIC. A specialized smallbusiness investment company(SSBIC) is treated as havingmet test 5b.Definition of qualified business. Aqualified business is any business thatisnt one of the following. A business involving services performed in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting,athletics, financial services, or brokerageservices. A business whose principal asset isthe reputation or skill of one or moreemployees. A banking, insurance, financing,leasing, investing, or similar business. A farming business (including theraising or harvesting of trees). A business involving the production of products for which percentagedepletion can be claimed. A business of operating a hotel,motel, restaurant, or similar business.For more details about limits and additional requirements that may apply,see Pub. 550 or section 1202.Acquisition date of stock acquired after February 17, 2009. When you aredetermining whether your exclusion islimited to 50%, 75%, or 100% of thegain from QSB stock, your acquisitiondate is considered to be the first day youheld the stock (determined after applying the holding period rules in section1223).TIPD-8Empowerment Zone BusinessStockYou generally can exclude up to 60% ofyour gain from the sale or exchange ofQSB stock held for more than 5 years ifyou meet the following additional requirements.1. The stock you sold or exchangedwas stock in a corporation that qualifiedas an empowerment zone business during substantially all of the time you heldthe stock.2. You acquired the stock after December 21, 2000, and before February18, 2009.Requirement 1 will still be met if thecorporation ceased to qualify after the5-year period that began on the date youacquired the stock. However, the gainthat qualifies for the 60% exclusion cantbe more than the gain you would havehad if you had sold the stock on the datethe corporation ceased to qualify.Stock acquired after February 17,2009. You can exclude up to 75% ofyour gain if you acquired the stock afterFebruary 17, 2009, and before September 28, 2010.You can exclude up to 100% of yourgain if you acquired the stock after September 27, 2010.More information. For more information about empowerment zone businesses, see section 1397C.Pass-Through EntitiesIf you held an interest in a pass-throughentity (a partnership, S corporation,common trust fund, or mutual fund orother regulated investment company)that sold QSB stock, to qualify for theexclusion you must have held the interest on the date the pass-through entityacquired the QSB stock and at all timesthereafter until the stock was sold.How To ReportReport the sale or exchange of the QSBstock on Form 8949, Part II, with the appropriate box checked, as you would ifyou werent taking the exclusion. Thenenter Q in column (f) and enter theamount of the excluded gain as a negative number in column (g). Put it in parentheses to show it is negative. See theinstructions for Form 8949, columns (f),(g), and (h). Complete all remaining columns. If you are completing line 18 ofSchedule D, enter as a positive numberthe amount of your allowable exclusionon line 2 of the 28% Rate Gain Worksheet; if you excluded 60% of the gain,enter 2/3 of the exclusion; if you excluded 75% of the gain, enter 1/3 of the exclusion; if you excluded 100% of thegain, dont enter an amount.Gain from Form 1099-DIV. If you received a Form 1099-DIV with a gain inbox 2c, part or all of that gain (which isalso included in box 2a) may be eligiblefor the section 1202 exclusion. Reportthe total gain (box 2a) on Schedule D,line 13. In column (a) of Form 8949,Part II, enter the name of the corporationwhose stock was sold. In column (f), enter Q and in column (g) enter theamount of the excluded gain as a negative number. See the instructions forForm 8949, columns (f), (g), and (h). Ifyou are completing line 18 of Schedule D, enter as a positive number theamount of your allowable exclusion online 2 of the 28% Rate Gain Worksheet;if you excluded 60% of the gain, enter2/3 of the exclusion; if you excluded75% of the gain, enter 1/3 of the exclusion; if you excluded 100% of the gain,dont enter an amount.Gain from Form 2439. If you receiveda Form 2439 with a gain in box 1c, partor all of that gain (which is also includedin box 1a) may be eligible for the section 1202 exclusion. Report the totalgain (box 1a) on Schedule D, line 11. Incolumn (a) of Form 8949, Part II, enterthe name of the corporation whose stockwas sold. In column (f), enter Q and incolumn (g) enter the amount of the excluded gain as a negative number. Seethe instructions for Form 8949, columns(f), (g), and (h). If you are completingline 18 of Schedule D, enter as a positive number the amount of your allowable exclusion on line 2 of the 28% RateGain Worksheet; if you excluded 60%of the gain, enter 2/3 of the exclusion; ifyou excluded 75% of the gain, enter 1/3of the exclusion; if you excluded 100%of the gain, dont enter an amount.Gain from an installment sale of QSBstock. If all payments arent received inthe year of sale, a sale of QSB stock thatisnt traded on an established securitiesmarket generally is treated as an installment sale and is reported on Form 6252.Report the long-term gain from Form6252 on Schedule D, line 11. Figure theallowable section 1202 exclusion for theyear by multiplying the total amount ofthe exclusion by a fraction, the numerator of which is the amount of eligiblegain to be recognized for the tax yearand the denominator of which is the total amount of eligible gain. In column(a) of Form 8949, Part II, enter the nameof the corporation whose stock was sold.In column (f), enter Q and in column(g) enter the amount of the allowable exclusion for the year as a negative number. See the instructions for Form 8949,columns (f), (g), and (h). If you are completing line 18 of Schedule D, enter as apositive number the amount of your allowable exclusion for the year on line 2of the 28% Rate Gain Worksheet; if youexcluded 60% of the gain, enter 2/3 ofthe allowable exclusion for the year; ifyou excluded 75% of the gain, enter 1/3of the allowable exclusion for the year;if you excluded 100% of the gain, dontenter an amount.Alternative minimum tax. If you qualify for the 50%, 60%, or 75% exclusion,enter 7% of your allowable exclusion forthe year on line 13 of Form 6251. If youqualify for the 100% exclusion, leaveline 13 of Form 6251 blank.Rollover of Gain From QSBStockIf you sold QSB stock (defined earlier)that you held for more than 6 months,you can elect to postpone gain if youbuy other QSB stock during the 60-dayperiod that began on the date of the sale.A pass-through entity also can make theelection to postpone gain. The benefit ofthe postponed gain applies to your shareof the entitys postponed gain if you heldan interest in the entity for the entire period the entity held the QSB stock. If apass-through entity sold QSB stock heldfor more than 6 months and you held aninterest in the entity for the entire periodthe entity held the stock, you also canelect to postpone gain if you, rather thanthe pass-through entity, buy the replacement QSB stock within the 60-day period. If you were a partner in a partnershipthat sold or bought QSB stock, seebox 11 of the Schedule K-1 (Form 1065)sent to you by the partnership and Regulations section 1.1045-1.D-9You must recognize gain to the extent the sale proceeds are more than thecost of the replacement stock. Reducethe basis of the replacement stock byany postponed gain.You must make the election no laterthan the due date (including extensions)for filing your tax return for the tax yearin which the QSB stock was sold. Ifyour original return was filed on time,you can make the election on an amended return filed no later than 6 monthsafter the due date of your return (excluding extensions). Write Filed pursuant tosection 301.9100-2 at the top of theamended return.To make the election, report the salein Part I or Part II (depending on howlong you, or the pass-through entity, ifapplicable, owned the stock) of Form8949 as you would if you werent making the election. Then enter R in column (f). Enter the amount of the postponed gain as a negative number in column (g). Put it in parentheses to show itis negative. See the instructions forForm 8949, columns (f), (g), and (h).Complete all remaining columns.Exclusion of Gain From DCZone AssetsIf you sold or exchanged a District ofColumbia Enterprise Zone (DC Zone)asset that you acquired after 1997 andbefore 2012 and held for more than 5years, you may be able to exclude theamount of qualified capital gain that youwould otherwise include in income. Theexclusion applies to an interest in, orproperty of, certain businesses operatingin the District of Columbia.DC Zone asset. A DC Zone asset is anyof the following. DC Zone business stock. DC Zone partnership interest. DC Zone business property.Qualified capital gain. Qualified capital gain is any gain recognized on thesale or exchange of a DC Zone asset thatis a capital asset or property used in atrade or business. It doesnt include anyof the following gains. Gain attributable to periods afterDecember 31, 2016. Gain treated as ordinary incomeunder section 1245. Section 1250 gain figured as ifsection 1250 applied to all depreciationrather than the additional depreciation. Gain attributable to real property,or an intangible asset, that isnt an integral part of a DC Zone business. Gain from a related-party transaction. See Sales and Exchanges BetweenRelated Persons in chapter 2 of Pub.544.How to report. Report the sale or exchange of DC Zone business stock or aDC Zone partnership interest on Form8949, Part II, as you would if youwerent taking the exclusion. Then enterX in column (f). Enter the amount ofthe exclusion as a negative number incolumn (g). Put it in parentheses to showit is negative. See the instructions forForm 8949, columns (f), (g), and (h).Complete all remaining columns.Report the sale or exchange of DCZone business property on Form 4797.See the Form 4797 instructions for details.Exclusion of Gain FromQualified Community AssetsIf you sold or exchanged a qualifiedcommunity asset that you acquired after2001 and before 2010 and held for morethan 5 years, you may be able to excludethe qualified capital gain that you wouldotherwise include in income. The exclusion applies to an interest in, or propertyof, certain renewal community businesses.Qualified community asset. A qualified community asset is any of the following. Qualified community stock. Qualified community partnershipinterest. Qualified community businessproperty.Qualified capital gain. Qualified capital gain is any gain recognized on thesale or exchange of a qualified community asset but doesnt include any of thefollowing. Gain attributable to periods afterDecember 31, 2014. Gain treated as ordinary incomeunder section 1245. Section 1250 gain figured as ifsection 1250 applied to all depreciationrather than the additional depreciation. Gain attributable to real property,or an intangible asset, that isnt an integral part of a renewal community business. Gain from a related-party transaction. See Sales and Exchanges BetweenRelated Persons in chapter 2 of Pub.544.How to report. Report the sale or exchange of qualified community stock ora qualified community partnership interest on Form 8949, Part II, with the appropriate box checked, as you would ifyou werent taking the exclusion. Thenenter X in column (f) and enter theamount of the exclusion as a negativenumber in column (g). Put it in parentheses to show it is negative. See the instructions for Form 8949, columns (f),(g), and (h). Complete all remaining columns.Report the sale or exchange of qualified community business property onForm 4797. See the Form 4797 instructions for details.Rollover of Gain FromEmpowerment Zone AssetsIf you sold a qualified empowermentzone asset that you held for more than 1year, you may be able to elect to postpone part or all of the gain that youwould otherwise include in income. Ifyou make the election, you generallyrecognize gain on the sale only to theextent, if any, that the amount realizedon the sale is more than the cost of thequalified empowerment zone assets (replacement property) you purchased during the 60-day period beginning on thedate of the sale.How to report. Report the sale of empowerment zone stock or an empowerment zone partnership interest on Part IIof Form 8949 as you would if youwerent making the election. Then enterR in column (f), and enter the amountof the postponed gain as a negativenumber in column (g). Put it in parentheses to show it is negative. See the instructions for Form 8949, columns (f),(g), and (h). Complete all remaining columns.Report the sale or exchange of empowerment zone business property onForm 4797. See the Form 4797 instructions for details.D-10At the time these instructionswent to print, the rollover ofgain from empowerment zoneassets had expired. To find out if legislation extended this provision for 2018, goto IRS.gov/ScheduleD .Deferral of Gain Invested ina QOFIf you have an eligible gain, you can invest that gain in a QOF and elect to defer part or all of the gain that you wouldotherwise include in income until yousell or exchange the investment in theQOF or December 31, 2026, whicheveris earlier. If you make the election, youonly include gain to the extent, if any,the amount of realized gain is more thanthe aggregate amount invested in a QOFduring the 180-day period beginning onthe date the gain was realized. You mayalso be able to permanently exclude theCAUTION!gain from the sale or exchange of anyinvestment in a QOF if the investment isheld for at least 10 years.QOF. A QOF is any investment vehiclethat is organized as either a corporationor partnership for the purpose of investing in eligible property that is located ina Qualified Opportunity Zone.How to report. Report the eligible gainas you normally would on Schedule D.See the Form 8949 instructions for howto report the deferral.Rollover of Gain From StockSold to ESOPs or CertainCooperativesYou can postpone all or part of any gainfrom the sale of qualified securities, heldfor at least 3 years, to an employee stockownership plan (ESOP) or eligibleworker-owned cooperative, if you buyqualified replacement property. See Pub.550. Also see the instructions for Form8949, columns (f), (g), and (h).SpecificInstructionsRounding Off to WholeDollarsYou can round off cents to whole dollarson your Schedule D. If you do round towhole dollars, you must round allamounts. To round, drop amounts under50 cents and increase amounts from 50to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.If you have to add two or moreamounts to figure the amount to enter ona line, include cents when adding theamounts and round off only the total. Capital Loss Carryover WorksheetLines 6 and 14 Keep for Your Records Use this worksheet to figure your capital loss carryovers from 2017 to 2018 if your 2017 Schedule D, line 21, is a loss and (a) that loss is asmaller loss than the loss on your 2017 Schedule D, line 16, or (b) the amount on your 2017 Form 1040, line 41 (or your 2017 Form 1040NR,line 39, if applicable) is less than zero. Otherwise, you dont have any carryovers.If you and your spouse once filed a joint return and are filing separate returns for 2018, any capital loss carryover from the joint return can bededucted only on the return of the spouse who actually had the loss.If you excluded canceled debt from income in 2018, see Pub. 4681.1. Enter the amount from your 2017 Form 1040, line 41, or your 2017 Form 1040NR, line 39. If a loss,enclose the amount in parentheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2. Enter the loss from your 2017 Schedule D, line 21, as a positive amount . . . . . . . . . . . . . . . . . . . . . . 2.3. Combine lines 1 and 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4. Enter the smaller of line 2 or line 3 . . . . . . . . . . . . . . . . . . . . 4.If line 7 of your 2017 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go toline 9.5. Enter the loss from your 2017 Schedule D, line 7, as a positive amount . . . . . . . . . . . . . . . . . . . . . . . 5.6. Enter any gain from your 2017 Schedule D, line 15. If a loss,enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7. Add lines 4 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8. Short-term capital loss carryover for 2018. Subtract line 7 from line 5. If zero or less, enter -0-. Ifmore than zero, also enter this amount on Schedule D, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.If line 15 of your 2017 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13.9. Enter the loss from your 2017 Schedule D, line 15, as a positive amount . . . . . . . . . . . . . . . . . . . . . . 9.10. Enter any gain from your 2017 Schedule D, line 7. If a loss,enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.11. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . 11.12. Add lines 10 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.13. Long-term capital loss carryover for 2018. Subtract line 12 from line 9. If zero or less, enter -0-. Ifmore than zero, also enter this amount on Schedule D, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. D-11Lines 1a and 8aTransactions Not Reportedon Form 8949You can report on line 1a (for short-termtransactions) or line 8a (for long-termtransactions) the aggregate totals fromany transactions (except sales of collectibles) for which: You received a Form 1099-B (orsubstitute statement) that shows basiswas reported to the IRS and doesntshow any adjustments in box 1f or 1g; The Ordinary box in box 2 isntchecked; and You dont need to make any adjustments to the basis or type of gain orloss reported on Form 1099-B (or substitute statement), or to your gain or loss.See How To Complete Form 8949, Columns (f) and (g) in the Form 8949 instructions for details about possible adjustments to your gain or loss.If you choose to report these transactions on lines 1a and 8a, dont reportthem on Form 8949. You dont need toattach a statement to explain the entrieson lines 1a and 8a and, if you e-file yourreturn, you dont need to file Form 8453.Figure gain or loss on each line. Subtract the cost or other basis in column (e)from the proceeds (sales price) in column (d). Enter the gain or loss in column (h). Enter negative amounts in parentheses.Example 1basis reported to theIRS. You received a Form 1099-B reporting the sale of stock you held for 3years. It shows proceeds (in box 1d) of$6,000 and cost or other basis (inbox 1e) of $2,000. Box 3 is checked,meaning that basis was reported to theIRS. You dont need to make any adjustments to the amounts reported on Form1099-B or enter any codes. This wasyour only 2018 transaction. Instead ofreporting this transaction on Form 8949,you can enter $6,000 on Schedule D,line 8a, column (d), $2,000 in column(e), and $4,000 ($6,000 $2,000) in column (h).If you had a second transaction thatwas the same except that the proceedswere $5,000 and the basis was $3,000,combine the two transactions. Enter$11,000 ($6,000 + $5,000) on Schedule D, line 8a, column (d), $5,000($2,000 + $3,000) in column (e), and$6,000 ($11,000 $5,000) in column(h).Example 2basis not reported tothe IRS. You received a Form 1099-Bshowing proceeds (in box 1d) of $6,000and cost or other basis (in box 1e) of$2,000. Box 3 isnt checked, meaningthat basis wasnt reported to the IRS.Dont report this transaction on line 1aor line 8a. Instead, report the transactionon Form 8949. Complete all necessarypages of Form 8949 before completingline 1b, 2, 3, 8b, 9, or 10 of Schedule D.Example 3adjustment. You received a Form 1099-B showing proceeds (in box 1d) of $6,000 and cost orother basis (in box 1e) of $2,000. Box 3is checked, meaning that basis was reported to the IRS. However, the basisshown in box 1e is incorrect. Dont report this transaction on line 1a orline 8a. Instead, report the transaction onForm 8949. See the instructions forForm 8949, columns (f), (g), and (h).Complete all necessary pages of Form8949 before completing line 1b, 2, 3, 8b,9, or 10 of Schedule D.Lines 1b, 2, 3, 8b, 9, and 10,Column (h)TransactionsReported on Form 8949Figure gain or loss on each line. First,subtract the cost or other basis in column (e) from the proceeds (sales price)in column (d). Then combine the resultwith any adjustments in column (g). Enter the gain or loss in column (h). Enternegative amounts in parentheses.Example 1gain. Column (d) is$6,000 and column (e) is $2,000. Enter$4,000 in column (h).Example 2loss. Column (d) is$6,000 and column (e) is $8,000. Enter($2,000) in column (h).Example 3adjustment. Column(d) is $6,000, column (e) is $2,000, andcolumn (g) is ($1,000). Enter $3,000($6,000 $2,000 $1,000) in column(h).Line 13See Capital Gain Distributions, earlier.Line 18If you checked Yes on line 17, complete the 28% Rate Gain Worksheet inthese instructions if either of the following applies for 2018. You reported in Part II of Form8949 a section 1202 exclusion from theeligible gain on QSB stock (see Exclusion of Gain on Qualified Small Business (QSB) Stock, earlier). You reported in Part II of Form8949 a collectibles gain or (loss). A collectibles gain or (loss) is any long-termgain or deductible long-term loss fromthe sale or exchange of a collectible thatis a capital asset.Collectibles include works of art,rugs, antiques, metals (such as gold, silver, and platinum bullion), gems,stamps, coins, alcoholic beverages, andcertain other tangible property.Include on the worksheet any gain(but not loss) from the sale or exchangeof an interest in a partnership, S corporation, or trust held for more than 1 yearand attributable to unrealized appreciation of collectibles. For details, see Regulations section 1.1(h)-1. Also, attachthe statement required under Regulations section 1.1(h)-1(e).D-12Line 19If you checked Yes on line 17, complete the Unrecaptured Section 1250Gain Worksheet in these instructions ifany of the following apply for 2018. You sold or otherwise disposed ofsection 1250 property (generally, realproperty that you depreciated) held morethan 1 year. You received installment paymentsfor section 1250 property held more than1 year for which you are reporting gainon the installment method. You received a Schedule K-1 froman estate or trust, partnership, or S corporation that shows unrecaptured section 1250 gain. You received a Form 1099-DIV orForm 2439 from a real estate investmenttrust or regulated investment company(including a mutual fund) that reportsunrecaptured section 1250 gain. You reported a long-term capitalgain from the sale or exchange of an interest in a partnership that owned section1250 property.Instructions for the UnrecapturedSection 1250 Gain WorksheetLines 1 through 3. If you had morethan one property described on line 1,complete lines 1 through 3 for eachproperty on a separate worksheet. Enterthe total of the line 3 amounts for allproperties on line 3 and go to line 4.Line 4. To figure the amount to enteron line 4, follow the steps below foreach installment sale of trade or businessproperty held more than 1 year.Step 1. Figure the smaller of (a) thedepreciation allowed or allowable, or (b)the total gain for the sale. This is thesmaller of line 22 or line 24 of your2018 Form 4797 (or the comparablelines of Form 4797 for the year of sale)for the property.Step 2. Reduce the amount figured inStep 1 by any section 1250 ordinary income recapture for the sale. This is theamount from line 26g of your 2018Form 4797 (or the comparable line ofForm 4797 for the year of sale) for theproperty. The result is your total unrecaptured section 1250 gain that must beallocated to the installment payments received from the sale.Step 3. Generally, the entire amountof gain from the sale of trade or businessproperty included in each installmentpayment is treated as unrecaptured section 1250 gain until the total unrecaptured section 1250 gain figured in Step 2has been used in full. Figure the amountof gain treated as unrecaptured section1250 gain for installment payments received in 2018 as the smaller of (a) theamount from line 26 or line 37 of your2018 Form 6252, whichever applies, or(b) the amount of unrecaptured section1250 gain remaining to be reported. Thisamount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years(excluding section 1250 ordinary income recapture). However, if you chosenot to treat all of the gain from paymentsreceived after May 6, 1997, and beforeAugust 24, 1999, as unrecaptured section 1250 gain, use only the amount youchose to treat as unrecaptured section1250 gain for those payments to reducethe total unrecaptured section 1250 gainremaining to be reported for the sale. Include this amount on line 4. 28% Rate Gain WorksheetLine 18 Keep for Your Records 1. Enter the total of all collectibles gain or (loss) from items you reported on Form 8949, Part II . . . . . . . . . . . . . . . 1.2. Enter as a positive number the total of: Any section 1202 exclusion you reported in column (g) of Form 8949,Part II, with code Q in column (f), that is 50% of the gain; 2/3 of any section 1202 exclusion you reported in column (g) of Form8949, Part II, with code Q in column (f), that is 60% of the gain; and 1/3 of any section 1202 exclusion you reported in column (g) of Form8949, Part II, with code Q in column (f), that is 75% of the gain.Dont make an entry for any section 1202 exclusion that is 100% of the gain.. . . . . . . . . . . . . . . . . . . . . . 2.3. Enter the total of all collectibles gain or (loss) from Form 4684, line 4 (but only if Form 4684, line 15, is morethan zero); Form 6252; Form 6781, Part II; and Form 8824 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4. Enter the total of any collectibles gain reported to you on: Form 1099-DIV, box 2d; Form 2439, box 1d; and Schedule K-1 from a partnership, S corporation, estate, or trust.. . . . . . . . . . . . . . . . . . . . 4.5. Enter your long-term capital loss carryovers from Schedule D, line 14, and Schedule K-1 (Form 1041),box 11, code C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. ( )6. If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. ( )7. Combine lines 1 through 6. If zero or less, enter -0-. If more than zero, also enter this amount onSchedule D, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. D-13Line 10. Include on line 10 your shareof the partnerships unrecaptured section1250 gain that would result if the partnership had transferred all of its section1250 property in a fully taxable transaction immediately before you sold or exchanged your interest in that partnership.If you recognized less than all of the realized gain, the partnership will be treated as having transferred only a proportionate amount of each section 1250property. For details, see Regulationssection 1.1(h)-1. Also attach the statement required under Regulationssection 1.1(h)-1(e).Line 12. An example of an amount toinclude on line 12 is unrecaptured section 1250 gain from the sale of a vacation home you previously used as a rental property but converted to personal useprior to the sale. To figure the amount toenter on line 12, follow the applicableinstructions below.Installment sales. To figure theamount to include on line 12, follow thesteps below for each installment sale ofproperty held more than 1 year forwhich you didnt make an entry in Part Iof your Form 4797 for the year of sale. Step 1. Figure the smaller of (a)the depreciation allowed or allowable, or(b) the total gain for the sale. This is thesmaller of line 22 or line 24 of your2018 Form 4797 (or the comparablelines of Form 4797 for the year of sale)for the property. Step 2. Reduce the amount figuredin step 1 by any section 1250 ordinaryincome recapture for the sale. This is theamount from line 26g of your 2018Form 4797 (or the comparable line ofForm 4797 for the year of sale) for theproperty. The result is your total unrecaptured section 1250 gain that must beallocated to the installment payments received from the sale. Step 3. Generally, the amount ofcapital gain on each installment paymentis treated as unrecaptured section 1250gain until the total unrecaptured section1250 gain figured in step 2 has beenused in full. Figure the amount of gaintreated as unrecaptured section 1250gain for installment payments receivedin 2018 as the smaller of (a) the amountfrom line 26 or line 37 of your 2018Form 6252, whichever applies, or (b) theamount of unrecaptured section 1250gain remaining to be reported. Thisamount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years(excluding section 1250 ordinary income recapture). However, if you chosenot to treat all of the gain from paymentsreceived after May 6, 1997, and beforeAugust 24, 1999, as unrecaptured section 1250 gain, use only the amount youchose to treat as unrecaptured section Unrecaptured Section 1250 Gain WorksheetLine 19 Keep for Your Records If you arent reporting a gain on Form 4797, line 7, skip lines 1 through 9 and go to line 10.1. If you have a section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form4797 (but not on Form 6252), enter the smaller of line 22 or line 24 of Form 4797 for that property. If youdidnt have any such property, go to line 4. If you had more than one such property, see instructions . . . . . . . . 1.2. Enter the amount from Form 4797, line 26g, for the property for which you made an entry on line 1 . . . . . . . . 2.3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 from installmentsales of trade or business property held more than 1 year. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5. Enter the total of any amounts reported to you on a Schedule K-1 from a partnership or an S corporation asunrecaptured section 1250 gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6. Add lines 3 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7. Enter the smaller of line 6 or the gain from Form 4797, line 7 . . . . . . . . . . . . . . . . . . 7.8. Enter the amount, if any, from Form 4797, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9. Subtract line 8 from line 7. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable tounrecaptured section 1250 gain. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.11. Enter the total of any amounts reported to you as unrecaptured section 1250 gain on a Schedule K-1, Form1099-DIV, or Form 2439 from an estate, trust, real estate investment trust, or mutual fund (or other regulatedinvestment company) or in connection with a Form 1099-R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or otherdispositions of section 1250 property held more than 1 year for which you didnt make an entry in Part I ofForm 4797 for the year of sale. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.13. Add lines 9 through 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.14. If you had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1through 4 of the 28% Rate Gain Worksheet. Otherwise, enter -0- . . . . . . . . . . . . . . 14.15. Enter the (loss), if any, from Schedule D, line 7. If Schedule D, line 7, is zero or again, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. ( )16. Enter your long-term capital loss carryovers from Schedule D, line 14, andSchedule K-1 (Form 1041), box 11, code C* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. ( )17. Combine lines 14 through 16. If the result is a (loss), enter it as a positive amount. If the result is zero or a gain,enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. If more than zero,enter the result here and on Schedule D, line 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.* If you are filing Form 2555 or 2555-EZ (relating to foreign earned income), see the footnote in the ForeignEarned Income Tax Worksheet in the Form 1040 instructions before completing this line. D-141250 gain for those payments to reducethe total unrecaptured section 1250 gainremaining to be reported for the sale. Include this amount on line 12.Other sales or dispositions of section1250 property. For each sale of property held more than 1 year (for which youdidnt make an entry in Part I of Form4797), figure the smaller of (a) the depreciation allowed or allowable, or (b)the total gain for the sale. This is thesmaller of line 22 or line 24 of Form4797 for the property. Next, reduce thatamount by any section 1250 ordinary income recapture for the sale. This is theamount from line 26g of Form 4797 forthe property. The result is the total unrecaptured section 1250 gain for thesale. Include this amount on line 12.Line 21You have a capital loss carryover from2018 to 2019 if you have a loss online 16 and either: That loss is more than the loss online 2; or The amount on Form 1040, line 10(or Form 1040NR, line 39, if applicable), is less than zero.To figure any capital loss carryoverto 2019, you will use the Capital LossCarryover Worksheet in the 2019 Instructions for Schedule D. If you want tofigure your carryover to 2019 now, seePub. 550.You will need a copy of your2018 Form 1040 and Schedule D to figure your capital losscarryover to 2019.TIPD-15 Schedule D Tax Worksheet Keep for Your Records Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero and lines 15 and 16 of Schedule D are gains.Otherwise, complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a (or inthe instructions for Form 1040NR, line 42) to figure your tax. Before completing this worksheet, complete Form 1040 throughline 10 (or Form 1040NR through line 41).Exception: Dont use the Qualified Dividends and Capital Gain Tax Worksheet or this worksheet to figure your tax if: Line 15 or line 16 of Schedule D is zero or less and you have no qualified dividends on Form 1040, line 3a (or Form 1040NR,line 10b); or Form 1040, line 10 (or Form 1040NR, line 41) is zero or less.Instead, see the instructions for Form 1040, line 11a (or Form 1040NR, line 42).1. Enter your taxable income from Form 1040, line 10 (or Form 1040NR, line 41). (However, if you are filingForm 2555 or 2555-EZ (relating to foreign earned income), enter instead the amount from line 3 of theForeign Earned Income Tax Worksheet in the instructions for Form 1040, line 11a) . . . . . . . . . . . . . . . . . . . . 1.2. Enter your qualified dividends from Form 1040,line 3a (or Form 1040NR, line 10b) . . . . . . . . . . . . 2.3. Enter the amount from Form 4952(used to figure investment interestexpense deduction), line 4g . . . . . . . 3.4. Enter the amount from Form 4952,line 4e* . . . . . . . . . . . . . . . . . . . . . . . 4.5. Subtract line 4 from line 3. If zero or less,enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6. Subtract line 5 from line 2. If zero or less, enter -0-** . . . . . . . . . . . . . . . 6.7. Enter the smaller of line 15 or line 16of Schedule D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8. Enter the smaller of line 3 or line 4 . . . . . . . . . . . . 8.9. Subtract line 8 from line 7. If zero or less, enter -0-** . . . . . . . . . . . . . . . 9.10. Add lines 6 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.11. Add lines 18 and 19 of Schedule D** . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.12. Enter the smaller of line 9 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.13. Subtract line 12 from line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.14. Subtract line 13 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.15. Enter: $38,600 if single or married filingseparately; $77,200 if married filing jointly orqualifying widow(er); or $51,700 if head of household.. . . . . . . . . . . . . . 15.16. Enter the smaller of line 1 or line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17. Enter the smaller of line 14 or line 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.18. Subtract line 10 from line 1. If zero or less,enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.19. Enter the larger of line 17 or line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.20. Subtract line 17 from line 16. This amount is taxed at 0%. . . . . . . . . . . . . . . . . . . . . . . . . . 20.If lines 1 and 16 are the same, skip lines 21 through 41 and go to line 42. Otherwise, go to line 21.21. Enter the smaller of line 1 or line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.22. Enter the amount from line 20. (If line 20 is blank, enter -0-.) . . . . . . . . . 22.23. Subtract line 22 from line 21. If zero or less, enter -0- . . . . . . . . . . . . . . . 23.24. Enter: $425,800 if single; $239,500 if married filing separately; $479,000 if married filing jointly orqualifying widow(er); or $452,400 if head of household.. . . . . . . . . . . . . . 24.25. Enter the smaller of line 1 or line 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.26. Add lines 19 and 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.27. Subtract line 26 from line 25. If zero or less, enter -0- . . . . . . . . . . . . . . . 27.28. Enter the smaller of line 23 or line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.29. Multiply line 28 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.30. Add lines 22 and 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.If lines 1 and 30 are the same, skip lines 31 through 41 and go to line 42. Otherwise, go to line 31. D-16 Schedule D Tax WorksheetContinued Keep for Your Records 31. Subtract line 30 from line 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.32. Multiply line 31 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.If Schedule D, line 19, is zero or blank, skip lines 33 through 38 and go to line 39. Otherwise, go to line 33.33. Enter the smaller of line 9 above or Schedule D, line 19 . . . . . . . . . . . 33.34. Add lines 10 and 19 . . . . . . . . . . . . . . . . . . . . . . . 34.35. Enter the amount from line 1 above . . . . . . . . . . . 35.36. Subtract line 35 from line 34. If zero or less, enter -0- . . . . . . . . . . . . . 36.37. Subtract line 36 from line 33. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.38. Multiply line 37 by 25% (0.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.If Schedule D, line 18, is zero or blank, skip lines 39 through 41 and go to line 42. Otherwise, go to line 39.39. Add lines 19, 20, 28, 31, and 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.40. Subtract line 39 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.41. Multiply line 40 by 28% (0.28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.42. Figure the tax on the amount on line 19. If the amount on line 19 is less than $100,000, use the Tax Table tofigure the tax. If the amount on line 19 is $100,000 or more, use the Tax Computation Worksheet . . . . . . . . 42.43. Add lines 29, 32, 38, 41, and 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.44. Figure the tax on the amount on line 1. If the amount on line 1 is less than $100,000, use the Tax Table tofigure the tax. If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet . . . . . . . . . 44.45. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 43or line 44. Also include this amount on Form 1040, line 11a (or Form 1040NR, line 42). (If you are filingForm 2555 or 2555-EZ, dont enter this amount on Form 1040, line 11a. Instead, enter it on line 4 of theForeign Earned Income Tax Worksheet in the Form 1040 instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.* If applicable, enter instead the smaller amount you entered on the dotted line next to line 4e of Form 4952.** If you are filing Form 2555 or 2555-EZ, see the footnote in the Foreign Earned Income Tax Worksheet inthe instructions for Form 1040, line 11a, before completing this line. D-17

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