taxmap/pub17/p17090.htm#en_us_publink100033500Emily Jones is single and, in addition to wages from her job, she has income from stocks and other securities. For the 2008 tax year, she had the following capital gains and losses, which she reports on Schedule D. All the Forms 1099 she received showed net sales prices. Her filledin Schedule D is shown in this chapter.
taxmap/pub17/p17090.htm#en_us_publink100033501Emily sold stock in two different companies that she held for less than a year. In June, she sold 100 shares of Trucking Co. stock that she had bought in February. She had an adjusted basis of $650 in the stock and sold it for $900, for a gain of $250. In July, she sold 25 shares of Computer Co. stock that she bought in June. She had an adjusted basis in the stock of $2,500 and she sold it for $2,000, for a loss of $500. She reports these shortterm transactions on line 1 in Part I of Schedule D.
Emily had three other stock sales that she reports as longterm transactions on line 8 in Part II of Schedule D. In February, she sold 60 shares of Car Co. for $2,100. She had inherited the Car Co. stock from her father. Its fair market value at the time of his death was $2,500, which became her basis. Her loss on the sale is $400. Because she had inherited the stock, her loss is a longterm loss, regardless of how long she and her father actually held the stock. She enters the loss in column (f) of line 8.
In June, she sold 500 shares of Furniture Co. stock for $14,000. She had bought 100 of those shares in 1997, for $1,000. She had bought 100 more shares in 1999 for $2,200, and an additional 300 shares in 2002 for $1,500. Her total basis in the stock is $4,700. She has a $9,300 ($14,000 − $4,700) gain on this sale, which she enters in column (f) of line 8.
In December, she sold 20 shares of Toy Co. for $4,100. This was qualified small business stock that she had bought in September 2003. Her basis is $1,100, so she has a $3,000 gain which she enters in column (f) of line 8. Because she held the stock more than 5 years, she has a $1,500 section 1202 exclusion. She claims the exclusion on the line below by entering $1,500 as a loss in column (f). She also enters the exclusion as a positive amount on line 2 of the 28% Rate Gain Worksheet.
She received a Form 1099B (not shown) from her broker for each of these transactions.
taxmap/pub17/p17090.htm#en_us_publink100033502Emily makes sure that the total of the amounts reported in column (d) of lines 3 and 10 of Schedule D is not less than the total of the amounts shown on the Forms 1099B she received from her broker. For 2008, the total is $23,100.
taxmap/pub17/p17090.htm#en_us_publink100033503Emily has a capital loss carryover to 2008 of $800, of which $300 is shortterm capital loss, and $500 is longterm capital loss. She enters these amounts on lines 6 and 14 of Schedule D. She also enters the $500 longterm capital loss carryover on line 5 of the 28% Rate Gain Worksheet. Her filledin 28% Rate Gain Worksheet is shown below.
She kept the completed Capital Loss Carryover Worksheet (not illustrated) in her 2007 edition of Publication 550, so she could properly report her loss carryover for the 2008 tax year without refiguring it.
taxmap/pub17/p17090.htm#en_us_publink100033504Because Emily has gains on both lines 15 and 16 of Schedule D, she checks the "Yes" box on line 17 and goes to line 18. On line 18 she enters $450 from line 7 of the 28% Rate Gain Worksheet. Because line 18 is greater than zero, she checks the "No" box on line 20 and uses the Schedule D Tax Worksheet to figure her tax.
After entering the gain from line 16 on line 13 of her Form 1040, she completes the rest of Form 1040 through line 43. She enters the amount from that line, $30,000, on line 1 of the Schedule D Tax Worksheet. After filling out the rest of that worksheet, she figures her tax as $2,768. This is less than the $4,103 tax she would have figured without the capital gain tax rates.
taxmap/pub17/p17090.htm#w24331i03b  28% Rate Gain Worksheet for Emily Jones—Line 18 1.  Enter the total of all collectibles gain or (loss) from items you reported on line 8, column (f), of Schedules D and D1  1.  0   2.  Enter as a positive number the amount of any section 1202 exclusion you reported on line 8, column (f), of Schedules D and D1, for which you excluded 50% of the gain, plus 2/3 of any section 1202 exclusion you reported on line 8, column (f), of Schedules D and D1, for which you excluded 60% of the gain  2.  1,500   3.  Enter the total of all collectibles gain or (loss) from Form 4684, line 4 (but only if Form 4684, line 15, is more than zero); Form 6252; Form 6781, Part II; and Form 8824  3.    4.  Enter the total of any collectibles gain reported to you on:  Form 1099DIV, box 2d;
 Form 2439, box 1d; and
 Schedule K1 from a partnership, S corporation, estate, or trust.
   4.    5.  Enter your longterm capital loss carryovers from Schedule D, line 14, and Schedule K1 (Form 1041), box 11, code C  5.  ( 500)   6.  If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter 0  6.  ( 550)   7.  Combine lines 1 through 6. If zero or less, enter 0. If more than zero, also enter this amount on Schedule D, line 18  7.  450  

taxmap/pub17/p17090.htm#w24331i04  Schedule D Tax Worksheet  Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero. Otherwise, complete the Qualified Dividends and Capital Gain Tax Worksheet on page 38 of the Instructions for Form 1040 (or in the Instructions for Form 1040NR) to figure your tax.    Exception: Do not 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 9b (or Form 1040NR, line 10b); or
 Form 1040, line 43 (or Form 1040NR, line 40) is zero or less.
Instead, see the instructions for Form 1040, line 44 (or Form 1040NR, line 41).     1.   Enter your taxable income from Form 1040, line 43 (or Form 1040NR, line 40). (However, if you are filing Form 2555 or 2555EZ (relating to foreign earned income), enter instead the amount from line 3 of the Foreign Earned Income Tax Worksheet on page 37 of the Form 1040 Instructions)  1.   30,000    2.   Enter your qualified dividends from Form 1040, line 9b (or Form 1040NR, line 10b)*  2.       3.   Enter the amount from Form 4952 (used to figure investment interest expense 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 16 of Schedule D  7.   9,350     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.   9,350     10.   Add lines 6 and 9  10.   9,350     11.   Add lines 18 and 19 of Schedule D*  11.   450     12.   Enter the smaller of line 9 or line 11  12.   450     13.   Subtract line 12 from line 10.  13.   8,900    14.   Subtract line 13 from line 1. If zero or less, enter 0.  14.   21,100    15.   Enter the smaller of:      • The amount on line 1 or • $32,550 if single or married filing separately; $65,100 if married filing jointly or qualifying widow(er); or $43,650 if head of household    15.   30,000     16.   Enter the smaller of line 14 or line 15  16.   21,100     17.   Subtract line 10 from line 1. If zero or less, enter 0  17.   20,100     18.   Enter the larger of line 16 or line 17  18.   21,100       If lines 15 and 16 are the same, skip lines 19 and go to line 20. Otherwise, go to line 19.    19.   Subtract line 16 from line 15  19.   8,900       If lines 1 and 15 are the same, skip lines 20 through 32 and go to line 33. Otherwise, go to line 20.    20.   Enter the smaller of line 1 or line 13  20.       21.   Enter the amount from line 19 (if line 19 is blank, enter 0)  21.       22.   Subtract line 21 from line 20. If zero or less, enter 0  22.       23.   Multiply line 22 by 15% (.15)  23.        If Schedule D, line 19, is zero or blank, skip lines 24 through 29 and go to line 30. Otherwise, go to line 24.    24.   Enter the smaller of line 9 above or Schedule D, line 19  24.       25.   Add lines 10 and 18  25.       26.   Enter the amount from line 1 above  26.       27.   Subtract line 26 from line 25. If zero or less, enter 0  27.       28.   Subtract line 27 from line 24. If zero or less, enter 0  28.       29.   Multiply line 28 by 25% (.25)  29.        If Schedule D, line 18, is zero or blank, skip lines 30 through 32 and go to line 33. Otherwise, go to line 30.    30.   Add lines 18, 19, 22, and 28  30.       31.   Subtract line 30 from line 1  31.       32.   Multiply line 31 by 28% (.28)  32.      33.   Figure the tax on the amount on line 18. Use the Tax Table or Tax Computation Worksheet, whichever applies  33.   2,768    34.   Add lines 23, 29, 32, and 33  34.   2,768    35.   Figure the tax on the amount on line 1. Use the Tax Table or Tax Computation Worksheet, whichever applies  35.   4,103    36.   Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 34 or line 35. Also include this amount on Form 1040, line 44 (or Form 1040NR, line 41). (If you are filing Form 2555 or 2555EZ, do not enter this amount on Form 1040, line 44. Instead, enter it on line 4 of the Foreign Earned Income Tax Worksheet in the Form 1040 instructions)  36.   2,768              *If you are filing Form 2555 or 2555EZ, see the footnote in the Foreign Earned Income Tax Worksheet on page 37 of the Form 1040 instructions before completing this line.         **If applicable, enter instead the smaller amount you entered on the dotted line next to line 4e of Form 4952.     
