Publication 17
taxmap/pub17/p17088.htm#en_us_publink1000172534  For more information on Form 8949 and Schedule D (Form 1040), see Schedule D (Form 1040), Form 8949, and the Instructions for Schedule D. Also see Publication
550. 
Emily Jones is single and, in addition to wages from her job, she has income from stocks and other securities. For the 2011 tax year, she had the following capital gains and losses, which she reports on Form 8949 and Schedule D. Her filledin Form 8949 and Schedule D are shown at the end of this
example.
taxmap/pub17/p17088.htm#en_us_publink1000172535Emily 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 bought in February. She had an adjusted basis of $1,150 in the stock and sold it for $400. In July, she sold 25 shares of Computer Co. stock that she bought in June. She had an adjusted basis in the stock of $2,000 and sold it for $2,500. She reports these shortterm transactions on line 1 in Part I of Form
8949.
Emily had other stock sales that she reports as longterm transactions on line 3 in Part II of Form
8949.
In June, she sold 500 shares of Furniture Co. stock for $5,000. She bought 100 of those shares in 1999, for $1,000. She bought 100 more shares in 2001 for $2,200, and an additional 300 shares in 2004 for $1,500. Her total basis in the stock is $4,700. She reports this transaction on line 3 in Part II of Form
8949.
In December, she sold 20 shares of Toy Co. stock for $4,100. This was qualified small business stock that she bought in September 2006. Her basis is $1,100. She reports this transaction on line 3 of Part II of Form
8949.
Emily received a Form 1099B (not shown) from her broker for each of these transactions. Each Form 1099B contains the correct information for the transaction, including the basis shown in box 3. She will check box A in Part I of Form 8949 where she reports her shortterm transactions. She will also check box A in Part II of Form 8949 where she reports her longterm
transactions.
Emily held her qualified small business stock for more than 5 years, so she can exclude 50% ($1,500) of the gain. She takes the exclusion by reporting the gain realized on the sale on Form 8949, line 3, as if she were not taking the exclusion. She completes all columns on Form 8949. She enters "S" in column (b) and the amount of the excluded gain as a negative number (in parentheses) in column (g). She also enters the exclusion as a positive number on line 2 of the 28% Rate Gain
Worksheet.
Emily completes her Form 8949 and then transfers the amounts from her Form 8949 to Schedule D. She enters the amounts from her shortterm transactions from columns (e) and (f) of line 2 of Form 8949, in columns (e) and (f) of line 1 of Schedule D. She has a shortterm capital loss of $250 that she enters in column (h) of line 1 of Schedule D. She enters the amounts from her longterm transactions from columns (e), (f), and (g) of line 4 of Form 8949, in columns (e), (f), and (g) of line 8 of Schedule D. She has a longterm capital gain of $1,800 that she enters in column (h) of line 8 of Schedule
D.
taxmap/pub17/p17088.htm#en_us_publink1000172537Emily has a capital loss carryover to 2011 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.
She kept the completed Capital Loss Carryover Worksheet in her 2010 edition of Publication 550 (not shown), so she could properly report her loss carryover for the 2011 tax year without refiguring
it.
taxmap/pub17/p17088.htm#en_us_publink1000172538Because 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 of Schedule D 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 of Schedule D 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 $4,034. This is less than the tax she would have figured without the capital gain tax rates,
$4,079.
taxmap/pub17/p17088.htm#en_us_publink1000172539  28% Rate Gain Worksheet for Emily Jones—Line 18 1.  Enter the total of all collectibles gain or (loss) from items you reported on Form 8949, line
3  1.  0   2.  Enter as a positive number the amount of any section 1202 exclusion you reported in column (g) of Form 8949, line 3, with code "S" in column (b), for which you excluded 50% of the gain, plus
2/3
of any section 1202 exclusion you reported in column (g) of Form 8949, line 3,
with code "S" in column (b), 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/p17088.htm#en_us_publink1000251039  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 in the Instructions for Form 1040, line 44 (or in the Instructions for Form 1040NR, line 42) 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 41) is zero or
less.
Instead, see the instructions for Form 1040, line 44 (or Form 1040NR, line 42).
    1.   Enter your taxable income from Form 1040, line 43 (or Form 1040NR, line 41). (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 in the Instructions for Form 1040, line 44)
 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.   750     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.   750     10.   Add lines 6 and 9     10.   750     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.   300    14.   Subtract line 13 from line 1. If zero or less, enter 0  14.   29,700    15.   Enter:      • $34,500 if single or married filing separately; • $69,000 if married filing jointly or qualifying widow(er);
or • $46,250 if head of household

  15.   34,500     16.   Enter the
smaller of line 1 or line 15
 16.   30,000       17.   Enter the
smaller of line 14 or line 16
 17.   29,700     18.   Subtract line 10 from line 1. If zero or less, enter 0  18.   29,250     19.   Enter the
larger of line 17 or line 18
 19.   29,700     20.   Subtract line 17 from line 16. This amount is taxed at
0%.  20.   300       If lines 1 and 16 are the same, skip lines 21 through 33 and go to line 34. 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.   Multiply line 23 by 15% (.15)  24.        If Schedule D, line 19, is zero or blank, skip lines 25 through 30 and go to line 31. Otherwise, go to line
25.    25.   Enter the
smaller of line 9 above or Schedule D, line 19
 25.       26.   Add lines 10 and 19  26.       27.   Enter the amount from line 1 above  27.       28.   Subtract line 27 from line 26. If zero or less, enter
0  28.       29.   Subtract line 28 from line 25. If zero or less, enter
0  29.       30.   Multiply line 29 by 25% (.25)  30.        If Schedule D, line 18, is zero or blank, skip lines 31 through 33 and go to line 34. Otherwise, go to line
31.    31.   Add lines 19, 20, 23, and 29  31.       32.   Subtract line 31 from line 1  32.       33.   Multiply line 32 by 28% (.28)  33.      34.   Figure the tax on the amount on
line 19.
If the amount on line 19 is less than $100,000, use the Tax Table to figure the
tax. If the amount on line 19 is $100,000 or more, use the Tax Computation
Worksheet
 34.   4,034    35.   Add lines 24, 30, 33, and 34  35.   4,034    36.   Figure the tax on the amount on
line 1.
If the amount on line 1 is less than $100,000, use the Tax Table to figure the
tax. If the amount on line 1 is $100,000 or more, use the Tax Computation
Worksheet
 36.   4,079    37.   Tax on all taxable income (including capital gains and qualified
dividends). Enter the
smaller
of line 35 or line 36. Also include this amount on Form 1040, line 44 (or Form
1040NR, line 42). (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)
 37.   4,034              *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 2555EZ, see the footnote in the Foreign Earned Income Tax Worksheet in the Instructions for Form 1040, line 44, before completing this line.
    
