New Form 8949 to Record Capital Gains Transactions

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New Form 8949 to Record Capital Gains Transactions

 

By Wade Farmer

The IRS has changed Schedule D so that it acts primarily as a synopsis of capital gains, losses, and carryovers. New in 2011 is Form 8949, Sales and Other Dispositions of Capital Assets (two parts, with short-term investments on part one and long-term investments on part two), which will replace Schedule D-1.

Form 8949 will be used to record capital asset transactions not reported on another form or schedule, and these transactions will be in one of three groups: covered securities sales with cost basis given (In most cases, a “covered security” is a security you obtained after 2010, with the exceptions being noted on the list below.), non-covered securities sales with no cost basis given, or investment asset sales with no 1099-B provided. Each of these categories requires a separate Form 8949. Please see the sample form below.

 

The cost basis for covered securities will be phased in the 1099-B, starting January 1, 2011.  Brokers need to include the following transactional information for their clients’ 1099-B:

  • Stock obtained as of 1/1/11
  • Mutual funds obtained as of 1/1/12
  • Stock obtained through dividend reinvestment as of 1/1/12
  • All notes, bonds and commodities obtained as of 1/1/13



Transactions before these dates will not have cost basis reflected on the 1099-B.

Please do not hesitate to contact our office if you have any questions or concerns, or you would like additional information.

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