Introduction

This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Schedule D of Form 1040. The discussion includes:

• How to report short-term gains and losses,
• How to report long-term gains and losses,
• How to figure capital loss carryovers,
• How to figure your tax using the lower tax rates on a net capital gain, and
• An illustrated example of how to complete Schedule D.

If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D.

Publication
• 537 - Installment Sales
• 544 - Sales and Other Dispositions of Assets
• 550 - Investment Income and Expenses

Form (and Instructions)
• Schedule D (Form 1040) - Capital Gains and Losses
• 4797 - Sales of Business Property
• 6252 - Installment Sale Income
• 8582 - Passive Activity Loss Limitations

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