Publication 550
taxmap/pubs/p550028.htm#en_us_publink1000250076  For more information on Form 8949 and Schedule D, see
Reporting Capital Gains and Losses
in chapter 4. See also Schedule D, Form 8949, and the 2011 Instructions for
Schedule D. 
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. She keeps track of all her basis adjustments to her mutual funds on her Mutual Fund Record, shown
later.
taxmap/pubs/p550028.htm#en_us_publink1000250096She shows the nondividend distributions and the undistributed capital gains from Mutual Fund S and the reinvested dividends from Mutual Fund R. She does not show the exemptinterest dividends from Mutual Fund X because those dividends do not change her basis in the shares. She keeps this record with her mutual fund documents and uses it to reconcile her 2011 sale of Mutual Fund
S.
taxmap/pubs/p550028.htm#en_us_publink1000250097Emily 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 enters this information on line 3 in Part II of Form
8949.
In October, Emily sold 200 shares of Mutual Fund S for $3,200. She purchased these shares in 1997 at $10 each. She received some nondividend distributions in 1999, 2000, and 2008 that reduced her basis in the shares. In 2009 and 2010, Emily reported undistributed capital gains that increased her basis in her shares. She received no distributions in 2011 before the sale. She reports the sale in Part II on line 3 of her Form 8949. She uses the information from her Form 1099B to complete columns (a) and (c) through (f). After adjustment for her nondividend distributions and her undistributed capital gains, her basis is $1,996 ($9.98 per share). This is the same basis shown in her personal records and on her Form
1099B.
She 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. The entries shown in box 2 of these forms total
$15,200.
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 $3,004 that she enters in column (h) of line 8 of Schedule
D.
taxmap/pubs/p550028.htm#en_us_publink1000250099In June, Emily invested $3,800 in Mutual Fund R and received 153.16 shares that cost $24.81 per share. She requested that all her distributions be reinvested in more shares of the Fund. She then received $265 of ordinary dividends, including $250 of qualified dividends, and $61 of capital gain distributions from the Fund. She received Form 1099DIV showing these amounts. On December 29, 2011, she acquired an additional 13.03 shares at $25.01 per share from her reinvested dividends. She reports the ordinary dividends on Form 1040, line 9a. She reports the qualified dividends on Form 1040, line 9b. She does not report the ordinary dividends on Schedule B (Form 1040A or Form 1040) because her total ordinary dividends were not over $1,500. She reports the capital gain distributions on Schedule D (Form 1040) because she has other capital transactions. She enters the $61 capital gain distribution on line
13.
In April 2009, Emily invested $2,600 in Mutual Fund X and received 87.54 shares at $29.70 per share. She received exemptinterest dividends of $92 in 2009, $107 in 2010, and $101 in 2011. She chose not to reinvest these and instead received a cash payment. She received Form 1099INT from Fund X showing this nontaxable amount, which she reports on Form 1040, line
8b.
In 1997, Emily bought 100 shares of common stock in Green Publishing Co. at $10.29 per share. In 2011, she received $237 in ordinary dividends, including $220 of qualified dividends, as a cash payment that was not reinvested. She received Form 1099DIV showing this amount. She reports the ordinary dividends on Form 1040, line 9a, and the qualified dividends on Form 1040, line
9b.
taxmap/pubs/p550028.htm#en_us_publink1000250100On June 2, 2011, Emily had a realized loss from a regulated futures contract of $11,000. She also had an unrealized markedtomarket gain on open contracts of $27,000 at the end of 2011. She reported an unrealized markedtomarket gain of $1,000 on her 2010 tax return. (This $1,000 must be subtracted from her 2011 profit.) These amounts are shown in boxes 10, 11, and 12 of the Form 1099B she received from her broker for these transactions. Box 13 shows her combined profit of $15,000 ($27,000 − $1,000 − $11,000). She reports this gain in Part I of Form 6781 (not shown). She shows 40% ($6,000) as shortterm gain on line 4 of Schedule D and 60% ($9,000) as longterm gain on line 11 of Schedule D.
The Form 1099B that Emily received from her broker, XYZ Trading Co., is shown
later.
taxmap/pubs/p550028.htm#en_us_publink1000250101Emily 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/pubs/p550028.htm#en_us_publink1000250102Because 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 $1,000 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 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 $2,421. This is less than the tax she would have figured without the capital gain tax rates, $4,079.
Table 45. Mutual Fund Record for Emily Jones
Mutual Fund  Acquired^{1}  Adjustment to Basis Per Share  Adjusted^{2} Basis Per Share
 Sold or Redeemed 
Date  Number of Shares  Cost Per Share  Date  Number of Shares 
MUTUAL FUND S  71297  200  10.00  123199  123100  123108  123009  83010  9.98  10511  200 
(.05)  (.02)  (.04)  .03  .06 
           
MUTUAL FUND X  41909  87.54  29.70         
           
MUTUAL FUND R  61211  153.16  24.81         
 122911  13.03  25.01         
           
           
           
           
           
^{1} Include share received from reinvestment of distributions.

^{2} Cost plus or minus adjustments.

taxmap/pubs/p550028.htm#en_us_publink1000264350  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.   470     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.   0     6.   Subtract line 5 from line 2. If zero or less, enter 0**  6.   470     7.   Enter the
smaller of line 15 or line 16 of Schedule D
 7.   11,565     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.   11,565     10.   Add lines 6 and 9  10.   12,035     11.   Add lines 18 and 19 of Schedule D**  11.   1,000     12.   Enter the
smaller
of line 9 or line 11
 12.   1,000     13.   Subtract line 12 from line 10  13.   11,035    14.   Subtract line 13 from line 1. If zero or less, enter 0  14.   18,965    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.   34,000     16.   Enter the
smaller
of line 1 or line 15
 16.   30,000       17.   Enter the
smaller of line 14 or line 16
 17.   18,965     18.   Subtract line 10 from line 1. If zero or less, enter 0  18.   17,965     19.   Enter the
larger
of line 17 or line 18
 19.   18,965     20.   Subtract line 17 from line 16. This amount is taxed at
0%.  20.   11,035       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.   2,421    35.   Add lines 24, 30, 33, and 34  35.   2,421    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.   2,421              *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.
                 

taxmap/pubs/p550028.htm#en_us_publink100026435128% Rate Gain Worksheet—Line 18 1.  Enter the total of all collectibles gain or (loss) from items you reported on Form 8949, line
3  1.    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.  1,500.00   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.  ( 500.00)   6.  If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter
0  6.  0   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.  1,000.00   
