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Publication 544

Chapter 4
Reporting Gains and Losses(p35)


This chapter explains how to report capital gains and losses and ordinary gains and losses from sales, exchanges, and other dispositions of property.
Although this discussion refers to Schedule D (Form 1040), many of the rules discussed here also apply to taxpayers other than individuals. However, the rules for property held for personal use usually will not apply to taxpayers other than individuals.


Useful items

You may want to see:

 550 Investment Income and Expenses
 537 Installment Sales
Form (and Instructions)
 Schedule D (Form 1040): Capital Gains and Losses
 1099-B: Proceeds From Broker and Barter Exchange Transactions
 1099-S: Proceeds From Real Estate Transactions
 4684: Casualties and Thefts
 4797: Sales of Business Property
 6252: Installment Sale Income
 6781: Gains and Losses from Section 1256 Contracts and Straddles
 8824: Like-Kind Exchanges
See chapter 5 for information about getting publications and forms.

Information Returns(p35)

If you sell or exchange certain assets, you should receive an information return showing the proceeds of the sale. This information is also provided to the IRS.

Form 1099-B.(p35)

If you sold stocks, bonds, commodities, etc., you should receive Form 1099-B or an equivalent statement. Whether or not you receive Form 1099-B, you must report all taxable sales of stocks, bonds, commodities, etc., on Schedule D. For more information on figuring gains and losses from these transactions, see chapter 4 in Publication 550.

Form 1099-S.(p35)

An information return must be provided on certain real estate transactions. Generally, the person responsible for closing the transaction must report on Form 1099-S sales or exchanges of the following types of property. If you sold or exchanged any of the above types of property, the reporting person must give you a copy of Form 1099-S or a statement containing the same information as the Form 1099-S.
If you receive or will receive property or services in addition to gross proceeds (cash or notes) in this transaction, the person reporting it does not have to value that property or those services. In that case, the gross proceeds reported on Form 1099-S will be less than the sales price of the property you sold. Figure any gain or loss according to the sales price, which is the total amount you realized on the transaction.