Beginning with tax year 2011, the Internal Revenue Service changed how you report the sale of capital assets such as stocks, bonds and mutual funds. Formerly, you reported the details on Schedule D-1 and summarized the information on Schedule D. In the new scheme, you use Form 8949 instead of Schedule D-1, and it is on the new form that you can enter “Various” in the “Date Acquired” column.
Welcome to Form 8949
Form 8949 contains two similar sections, one each for short-term and long-term capital gains and losses. You use the long-term section for assets you held for more than a year prior to their sale. Each section is a grid with rows representing different property sales and columns containing data about each property. You identify a sold asset in the leftmost column. For example, you might enter “100 shares of XYZ Corp” in this column. You then proceed to fill in the remaining columns using the information your broker or mutual fund company sent to you on Form 1099-B. This information includes the identity of each sold security, the amount, cost, dates bought and sold and sale proceeds.
Dating Your Transactions
Among the data items you need to transcribe from Form 1099-B to Form 8949 are the dates you purchased and sold each asset. Normally, you simply enter the purchase date in the appropriate column. However, if you sold assets that you acquired through multiple transactions on different dates, you instead enter “various” in the column. This might occur, for example, if you purchased shares of a mutual fund on several occasions. You can also enter “inherited” if you received the assets from a bequest. When you enter “various,” make sure you report your short- and long-term holdings separately in the appropriate sections, even if you're reporting the sale of the same asset.
Completing Form 8949
You can’t enter “Various” under the “Data Sold” column -- it must have the exact date of a sale. Complete each row of Form 8949 by entering the cost, sale proceeds, adjustments and the gain or loss on the sale. Adjustments add to or subtract from your gain or loss. Each adjustment type has its own code. For example, if you enter a wash sale, use the code “W.” A wash sale occurs when you repurchase an asset within 30 days of selling it for a loss. Your copy of Form 1099-B should indicate most or all of the adjustments you might need to enter on Form 8949.
The Big Finish
When you've finished transcribing information onto Form 8949, tally the columns for proceeds, costs, adjustments and gains or losses in each section, and write down your total short-term and long-term figures. Transfer these results to the appropriate columns in Schedule D. You’ll need to indicate whether some of your costs or transactions were not reported on Form 1099-B. Figure your total short- and long-term capital gains or losses, and transfer these amounts for Form 1040. Attach Form 8949 and Schedule D to Form 1040 when you file your tax return.
- Internal Revenue Service: Eight Facts About New IRS Form 8949 and Schedule D
- Internal Revenue Service: Form 8949: Sales and Other Dispositions of Capital Assets
- Internal Revenue Service: Instructions for Form 8949
- Internal Revenue Service: Publication 550: Investment Income and Expenses
- Internal Revenue Service: Schedule D: Capital Gains and Losses
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