1120 Schedule D Instructions for Form 1120 Schedule D

2020

Instructions for Schedule D
(Form 1120)

Department of the Treasury
Internal Revenue Service

Capital Gains and Losses
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments
For the latest information about
developments to Schedule D (Form
1120) and its instructions, such as
legislation enacted after they were
published, go to IRS.gov/Form1120.

• Worthlessness of a security;
• The corporation's share of gain or

loss from a partnership, S corporation,
estate, or trust;
• Elections to defer capital gain
invested in a Qualified Opportunity Fund
(QOF); and
• Dispositions of interests in QOFs.

Purpose of Schedule

Complete all applicable lines of Form
8949 before completing line 1b, 2, 3, 8b,
9, or 10 of Schedule D (Form 1120).
See the Instructions for Form 8949 for
special provisions and exceptions to
completing Form 8949 for certain
corporations. Also, see the instructions
for lines 1a and 8a, later, for more
information about when to use Form
8949.

Who Must File

Use Form 4797 to report the
following.
• The sale or exchange of:
1. Real property used in a trade or
business;
2. Depreciable and amortizable
tangible property used in a trade or
business (however, see Disposition of
Depreciable Property Not Used in Trade
or Business in the Instructions for Form
4797);
3. Oil, gas, geothermal, or other
mineral property; and
4. Section 126 property.
• The involuntary conversion (other
than from casualty or theft) of property
used in your trade or business and
capital assets held more than 1 year in
connection with a trade or business or a
transaction entered into for profit
(however, see Disposition of
Depreciable Property Not Used in Trade
or Business in the Instructions for Form
4797).
• The disposition of noncapital assets
other than inventory or property held
primarily for sale to customers in the
ordinary course of the corporation's
trade or business.
• The section 291 adjustment to
section 1250 property.
• Gains or losses treated as ordinary
gains or losses, if you are a trader in
securities or commodities and made a
mark-to-market election under section
475(f).

General Instructions
Use Schedule D to:
• Figure the overall gain or loss from
transactions reported on Form 8949,
Sales and Other Dispositions of Capital
Assets;
• Report certain transactions the
corporation does not have to report on
Form 8949;
• Report gain from Form 6252,
Installment Sale Income, or from Part I
of Form 4797, Sales of Business
Property;
• Report gain or loss from Form 8824,
Like-Kind Exchanges;
• Report unused capital loss carryover;
and
• Report capital gain distributions not
reported directly on Form 1120, line 8
(or effectively connected capital gain
distributions not reported directly on
Form 1120-F, 1120-C, 1120-H, or all
other related forms).
Complete and attach Schedule D (Form
1120) to Form 1120, 1120-C, 1120-F,
1120-FSC, 1120-H, 1120-IC-DISC,
1120-L, 1120-ND, 1120-PC, 1120-POL,
1120-REIT, 1120-RIC, 1120-SF, or
certain Forms 990-T.

Other Forms the
Corporation May Have To
File

Use Form 8949 to report:
• Sales or exchanges of capital assets
(defined later) not reported on another
form or schedule;
• Nonbusiness bad debts;
• Undistributed long-term capital gains
from Form 2439;
Dec 13, 2020

Cat. No. 26358T

• Election to defer a qualified section
1231 gain invested in a QOF.
Use Form 4684, Casualties and
Thefts, to report involuntary conversions
of property due to casualty or theft.
Use Form 6781, Gains and Losses
From Section 1256 Contracts and
Straddles, to report gains and losses
from section 1256 contracts and
straddles.
Use Form 8824 if the corporation
made one or more “like-kind”
exchanges. Generally, a like-kind
exchange occurs when the corporation
exchanges qualifying business or
investment real property for real
property of a like kind. For exchanges of
capital assets, include the gain or (loss)
from Form 8824, if any, on Schedule D
(Form 1120), line 5 or line 13, as
applicable.
Additional information. For more
information, see the instructions for the
forms listed above. Also, see Pub. 544,
Sales and Other Dispositions of Assets
and Pub. 550, Investment Income and
Expenses.

Capital Assets

Each item of property the corporation
held (whether or not connected with its
trade or business) is a capital asset
except the following. See section
1221(a).
• Stock in trade or other property
included in inventory or held mainly for
sale to customers. However, see the
Note, later.
• Accounts or notes receivable
acquired in the ordinary course of the
trade or business for services rendered
or from the sale of stock in trade or other
property included in inventory or held
mainly for sale to customers.
• Depreciable or real property used in
the trade or business, even if it is fully
depreciated.
• Certain copyrights; literary, musical,
or artistic compositions; letters or
memoranda; or similar property.
However, see the Note, later.
• Certain patents, inventions, models
or designs (whether or not patented);

secret formulas or processes; or similar
property.
• U.S. Government publications,
including the Congressional Record,
that the corporation received from the
government, other than by purchase at
the normal sales price, or that the
corporation got from another taxpayer
who had received it in a similar way, if
the corporation's basis is determined by
reference to the previous owner's basis.
• Certain commodities derivative
financial instruments held by a dealer in
connection with its dealer activities.
• Certain identified hedging
transactions entered into in the normal
course of the trade or business.
• Supplies regularly used in the trade
or business.
Note. The corporation can elect to treat
as capital assets certain musical
compositions or copyrights in musical
works it sold or exchanged. See section
1221(b)(3) and Pub. 550 for details.

Capital Losses

For a corporation, capital losses are
allowed in the current tax year only to
the extent of capital gains. A net capital
loss is carried back 3 years and forward
up to 5 years as a short-term capital
loss. Carry back a capital loss to the
extent it doesn’t increase or produce a
net operating loss in the tax year to
which it is carried. Foreign expropriation
capital losses cannot be carried back,
but are carried forward up to 10 years. A
net capital loss of a regulated
investment company (RIC) incurred in
tax years beginning before December
23, 2010, is carried forward up to 8
years. There is no limit on the number of
tax years a RIC is allowed to carry
forward a net capital loss incurred in tax
years beginning after December 22,
2010.
For more information about corporate
capital losses, see Capital Losses in
Pub. 542, Corporations.

Short- or Long-Term Gain or
Loss

Report short-term gains or losses in Part
I. Report long-term gains or losses in
Part II. The holding period for short-term
capital gains and losses is generally 1
year or less. The holding period for
long-term capital gains and losses is
generally more than 1 year.
For more information about holding
periods, see the Instructions for Form
8949.

Items for Special Treatment

Note. For more information, see Pub.
544.

Special rules for determining basis.
In general, the basis of property is its
cost. See section 1012 and the related
regulations. Special rules for
determining basis are provided in
sections in subchapters C, K, O, and P
of the Code. These rules may apply to
the:
• Receipt of certain distributions with
respect to stock (section 301 or 1059),
• Liquidation of another corporation
(section 334),
• Transfer to another corporation
(section 358),
• Transfer from a shareholder or
reorganization (section 362),
• Bequest (section 1014),
• Contribution or gift (section 1015),
• Tax-free exchange (section 1031),
• Involuntary conversion (section
1033),
• Certain asset acquisitions (section
1060), or
• Wash sale of stock (section 1091).
Attach an explanation if the
corporation uses a basis other than
actual cost of the property. See the
instructions for Form 8949, column (e).
A RIC's or REIT's basis in an asset it
held on January 1, 2001, for which it
made an election to recognize any gain
under section 311 of the Taxpayer
Relief Act of 1997, is the asset's closing
market price or fair market value (FMV),
whichever applies, on the date of the
deemed sale and reacquisition, whether
the deemed sale resulted in a gain or
unallowed loss.
See section 852(f) for the treatment
of certain load charges incurred in
acquiring stock in a RIC with a
reinvestment right.
Gain from installment sales. If the
corporation sold property at a gain and it
will receive a payment in a tax year after
the year of sale, it generally must report
the sale on the installment method
unless it elects not to. However, the
installment method may not be used to
report sales of stock or securities traded
on an established securities market.
Use Form 6252 to report the sale on
the installment method. Also use Form
6252 to report any payment received
during the tax year from a sale made in
an earlier year that was reported on the
installment method. Enter gain from the
installment sales on Schedule D, line 4
or line 12, as applicable. See the
instructions for Form 6252.
To elect out of the installment
method, report the full amount of the
gain on Form 8949 for the year of the
sale on a return filed by the due date
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(including extensions). If the original
return was filed on time without making
the election, the corporation may make
the election on an amended return filed
no later than 6 months after the original
due date (excluding extensions). Write
“Filed pursuant to section 301.9100-2”
at the top of the amended return.
Gain on distributions of appreciated
property. Generally, gain (but not loss)
is recognized on a nonliquidating
distribution of appreciated property to
the extent that the property's FMV
exceeds its adjusted basis. See section
311.
Rollover of gain from empowerment
zone assets. If the corporation sold a
qualified empowerment zone asset held
for more than 1 year, it may be able to
elect to postpone part or all of the gain
that it would otherwise include in
income. See section 1397B(b)(1) for the
definition of a qualified empowerment
zone asset. If the corporation makes the
election, the gain on the sale is
generally recognized only to the extent,
if any, that the amount realized on the
sale exceeds the cost of qualified
empowerment zone assets
(replacement property) the corporation
purchased during the 60-day period
beginning on the date of the sale and
before January 1, 2021. For more
information, see section 1397B and
section 1391(d)(1)(A)(i). Also see Pub.
544.
How to report. If applicable, report
the sale on Part II of Form 8949 as the
corporation otherwise would if it were
not making the election. Enter “R” in
column (f). Enter the amount of the
postponed gain as a negative number in
column (g). Put it in parentheses to
show it is negative. See the instructions
for Form 8949, columns (f), (g), and (h).
Complete all remaining columns.
Exclusion of gain from DC Zone assets. If the corporation sold or
exchanged a qualified District of
Columbia Enterprise Zone (DC Zone)
asset acquired after 1997 and before
2012, and held for more than 5 years, it
may exclude any qualified capital gain
that the corporation would otherwise
include in income. The exclusion
applies to an interest in, or property of,
certain businesses operating in the
District of Columbia.
DC Zone asset. A DC Zone asset is
any of the following.
• DC Zone business stock.
• DC Zone partnership interest.
• DC Zone business property.

Qualified capital gain. Qualified
capital gain is any gain recognized on
the sale or exchange of a DC Zone
asset, but doesn’t include any of the
following.
• Gain treated as ordinary income
under section 1245.
• Section 1250 gain figured as if
section 1250 applied to all depreciation
rather than the additional depreciation.
• Gain attributable to real property, or
an intangible asset, that isn’t an integral
part of a DC Zone business.
• Gain from a related-party transaction.
See Sales and Exchanges Between
Related Persons in chapter 2 of Pub.
544.
• Gain attributable to periods before
1998 and after 2016.
See section 1400B (as in effect
before its repeal) for more details on DC
Zone assets and special rules.
How to report. If applicable, report
the sale or exchange on Form 8949,
Part II, as the corporation otherwise
would without regard to the exclusion
(with the appropriate box checked).
Enter “X” in column (f). Enter the amount
of the exclusion as a negative number
(in parentheses) in column (g).
Complete all remaining columns. See
the Instructions for Form 8949 for
details.
Report the sale or exchange of DC
Zone business property on Form 4797.
See the Instructions for Form 4797 for
details.
Exclusion of gain from qualified
community assets. If the corporation
sold or exchanged a qualified
community asset acquired after 2001
and before 2010, it may be able to
exclude any qualified capital gain that
the corporation would otherwise include
in income. The exclusion applies to an
interest in, or property of, certain
renewal community businesses.
Qualified community asset. A
qualified community asset is any of the
following.
• Qualified community stock.
• Qualified community partnership
interest.
• Qualified community business
property.
Qualified capital gain. Qualified
capital gain is any gain recognized on
the sale or exchange of a qualified
community asset, but does not include
any of the following.
• Gain treated as ordinary income
under section 1245.

• Section 1250 gain figured as if
section 1250 applied to all depreciation
rather than the additional depreciation.
• Gain attributable to real property, or
an intangible asset, that is not an
integral part of a renewal community
business.
• Gain from a related-party transaction.
See Sales and Exchanges Between
Related Persons in chapter 2 of Pub.
544.
• Gains from periods after December
31, 2014.
See section 1400F (as in effect
before its repeal) for more details and
special rules.
How to report. If applicable, report
the sale or exchange on Form 8949,
Part II, as the corporation otherwise
would without regard to the exclusion
(with the appropriate box checked).
Enter “X” in column (f) and enter the
amount of the excluded gain as a
negative number (in parentheses) in
column (g). Complete all remaining
columns. See the Instructions for Form
8949.
Report the sale or exchange of
qualified community business property
on Form 4797. See the Instructions for
Form 4797 for details.
Gain on the constructive sale of certain appreciated financial positions.
Generally, if the corporation holds an
appreciated financial position in stock or
certain other interests, it may have to
recognize gain (but not loss) if it enters
into a constructive sale (such as a “short
sale against the box”). See Pub. 550.
Gain from certain constructive ownership transactions. Gain in excess of
the underlying net long-term capital gain
the corporation would have recognized
if it had held a financial asset directly
during the term of a derivative contract
must be treated as ordinary income.
See section 1260. If any portion of the
constructive ownership transaction was
open in any prior year, the corporation
may have to pay interest. See section
1260(b) for details, including how to
figure the interest. Include the interest
as an additional tax on Form 1120,
Schedule J, line 9g (or the applicable
line for other income tax returns).
Gain on disposition of market discount bonds. In general, if the
corporation realizes a capital gain upon
the disposition of a market discount
bond, the gain is recharacterized as
interest income to the extent of accrued
market discount as of the date of
disposition. See sections 1276 through
1278 and Pub. 550 for more information
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on market discount. See the Instructions
for Form 8949 for detailed information
about how to report the disposition of a
market discount bond.
Gains on certain insurance property.
Form 1120-L filers with gains on
property held on December 31, 1958,
and certain substituted property
acquired after 1958, should see section
818(c).
Gains and losses from passive activities. A closely held or personal service
corporation that has a gain or loss that
relates to a passive activity (section
469) may be required to complete Form
8810, Corporate Passive Activity Loss
and Credit Limitations, before
completing Form 8949 and Schedule D.
An applicable loss may be limited under
the passive activity rules. See Form
8810 and the Instructions for Form
8810.
Gains and losses of foreign corporations from the disposition of investment in U.S. real property. Foreign
corporations must report gains and
losses from the disposition of U.S. real
property interests. For more information,
see section 897. Also, see section
897(c) for the definition of a U.S. real
property interest, section 897(k) for
special rules for real estate investment
trusts, and section 897(l) for special
rules relating to qualified foreign
pension funds.
Gain or loss on distribution of property in complete liquidation.
Generally, gain or loss is recognized on
property distributed in a complete
liquidation. Treat the property as if it had
been sold at its FMV. An exception to
this rule applies for liquidations of
certain subsidiaries. See sections 336
and 337 for more information and other
exceptions to the general rules.
Gain or loss on certain asset transfers to a tax-exempt entity. A taxable
corporation that transfers all or
substantially all of its assets to a
tax-exempt entity or converts from a
taxable corporation to a tax-exempt
entity in a transaction other than a
liquidation generally must recognize
gain or loss as if it had sold the assets
transferred at their FMV. For details and
exceptions, see Regulations section
1.337(d)-4.
Gain or loss on an option to buy or
sell property. See sections 1032 and
1234 for the rules that apply to a
purchaser or grantor of an option or a
securities futures contract (as defined in
section 1234B). See Pub. 550 for
details.

Gain or loss from a short sale of
property. Report the gain or loss if the
property used to close the short sale is
considered a capital asset in the hands
of the taxpayer. Report any short sale
on Form 8949 in the year the sale
closes.
If a short sale closed in 2020 but you
did not get a 2020 Form 1099-B (or
substitute statement) for it because you
entered into it before 2011, report it on
Form 8949 in Part I with box C checked
or Part II with box F checked (whichever
applies). In column (a), enter (for
example) “100 sh. XYZ Co. —2010
short sale closed.” Fill in the other
columns according to their instructions.
Report the short sale the same way if
you received a 2020 Form 1099-B (or
substitute statement) that doesn’t show
the proceeds (sales price).
Gain on certain short-term federal,
state, and municipal obligations
(other than tax-exempt obligations).
If a short-term governmental obligation
(other than a tax-exempt obligation) that
is a capital asset is acquired at an
acquisition discount, then, on any gain
realized, a portion is treated as ordinary
income and any remaining balance is
treated as a short-term capital gain. See
section 1271.
Contingent payment debt instruments. If the corporation sells a
taxable contingent payment debt
instrument subject to the noncontingent
bond method at a gain, the gain is
ordinary income (interest income), even
if the corporation holds the debt
instrument as a capital asset. If the
corporation sells a taxable contingent
payment debt instrument subject to the
noncontingent bond method at a loss,
its loss is an ordinary loss to the extent
of its prior original issue discount (OID)
inclusions on the debt instrument. If the
debt instrument is a capital asset, treat
any loss that is more than the
corporation's prior OID inclusions as a
capital loss. See Regulations section
1.1275-4(b) and Pub. 1212, Guide to
Original Issue Discount (OID), for more
information on contingent payment debt
instruments subject to the
noncontingent bond method.
See the Instructions for Form 8949
for information on how to report the gain
or loss.
At-risk limitations (section 465). If
the corporation sold or exchanged a
capital asset used in an activity to which
the at-risk rules apply, combine the gain
or loss on the sale or exchange with the
profit or loss from the activity. If the

result is a net loss, complete Form
6198, At-Risk Limitations. Report any
gain from the capital asset on Form
8949, Schedule D, and Form 6198.

section 384 may limit the amount of
recognized built-in capital gains that
may be offset by preacquisition capital
losses.

Loss from a sale or exchange between the corporation and a related
person. Except for distributions in
complete liquidation of a corporation, no
loss is allowed from the sale or
exchange of property between the
corporation and certain related persons.
See section 267.

Loss from the sale or exchange of
capital assets of an insurance company taxable under section 831.
Capital losses of a casualty insurance
company are deductible to the extent
that the assets were sold to meet
abnormal insurance losses or to provide
for the payment of dividend and similar
distributions to policyholders. See
section 834(c)(6).

Loss from a wash sale. A wash sale
occurs if the corporation acquires (by
purchase or exchange), or has a
contract or option to acquire,
substantially identical stock or securities
within 30 days before or after the date of
a sale or exchange that results in a loss.
The corporation cannot deduct a loss
from a wash sale of stock or securities
(including contracts or options to
acquire or sell stock or securities)
unless the corporation is a dealer in
stock or securities and the loss was
sustained in a transaction made in the
ordinary course of the corporation's
trade or business. For more information
on wash sales, see section 1091 and
Pub. 550.
The wash sale rules don't apply to a
redemption of shares in a floating-NAV
(net asset value) money market fund.
Report the transaction as the
corporation otherwise would on Form
8949, Part I or II (depending on how
long the corporation owned the stock or
securities). Check the appropriate box.
Enter “W” in column (f). Enter the
nondeductible loss as a positive number
in column (g). Complete all remaining
columns. See the Instructions for Form
8949.
Loss from securities that are capital
assets that become worthless during the year. Except for securities held
by a bank, treat the loss as a capital loss
as of the last day of the tax year. See
section 582 for the rules on the
treatment of securities held by a bank.
Losses limited after an ownership
change or acquisition. If the
corporation has undergone an
“ownership change” as defined in
section 382(g), section 383 may limit the
amount of capital gains that may be
offset by prechange capital losses. In
addition, section 382(h) may in some
cases limit capital losses recognized
after an ownership change when the
loss accrued before the ownership
change. Also, if a corporation acquires
control of another corporation (or
acquires its assets in a reorganization),
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Gains and losses from partnerships,
estates, or trusts. Report the
corporation's share of capital gains and
losses from investments in partnerships,
estates, or trusts on the appropriate Part
of Form 8949. Report a net short-term
capital gain (loss) on Part I with box C
checked. Report a net long-term capital
gain (loss) on Part II with box F
checked. See the Instructions for Form
8949.
Undistributed long-term gains from
a regulated investment company
(RIC) or real estate investment trust
(REIT). Report the corporation's share
of long-term gains from Form 2439,
Notice to Shareholder of Undistributed
Long-Term Capital Gains, on Form
8949, Part II (with box F checked). Enter
“From Form 2439” in column (a). Enter
the gain in column (h). Leave all other
columns blank. See the Instructions for
Form 8949.
Amounts from Form 2438. Enter any
net short-term capital gain from line 4 of
Form 2438, Undistributed Capital Gains
Tax Return, on Form 8949, Part I, with
box C checked. Identify the gain as “Net
short-term capital gain from Form 2438
line 4” in column (a). Enter the amount
of the gain in column (h). Leave all other
columns blank.
Enter the amount from line 12 of
Form 2438 on Form 8949, Part II, with
box F checked. Identify the gain as
“Undistributed capital gains not
designated (from Form 2438)” in column
(a). Enter the amount of the gain in
column (h). Leave all other columns
blank.
NAV method for money market
funds. Report capital gain or loss
determined under the net asset value
(NAV) method with respect to shares in
a money market fund on Form 8949,
Part I, with box C checked. Enter the
name of each fund followed by “(NAV)”
in column (a). Enter the net gain or loss
in column (h). Leave all other columns

blank. See the Instructions for Form
8949.
Deferral of gain invested in Qualified
Opportunity Fund (QOF). If the
corporation has an eligible gain (defined
below), the corporation can invest that
gain in a QOF and elect to defer part or
all of the gain that it would otherwise
include in income. The gain is deferred
until the corporation disposes of the
investment in the QOF or December 31,
2026, whichever is earlier. If the
corporation makes the election, only
include gain to the extent, if any, the
amount of realized gain is more than the
aggregate amount invested in a QOF
during the 180-day period beginning on
the date the gain was realized. The
corporation also may be able to
permanently exclude the gain from the
sale or exchange of any investment in a
QOF if the investment is held for at least
10 years.
QOF. A QOF is any investment
vehicle that is organized as either a
corporation or partnership for the
purpose of investing in eligible property
that is located in a Qualified Opportunity
Zone.
Eligible gain. Gain that is eligible to
be deferred if it is invested in a QOF
includes any amount treated as a capital
gain for federal income tax purposes.
See section 1400Z for more details
on QOFs and special rules. Also, see
IRS.gov/Ozfaqs.
How to report. Report the eligible
gain as the corporation normally would
on Form 8949 and Schedule D. See the
Instructions for Form 8949 for how to
report the deferral. You will also need to
annually attach to your tax return Form
8997, Initial and Annual Statement of
Qualified Opportunity Fund
Investments, until you dispose of the
QOF investment. For more information,
see Form 8997 and its instructions.

Specific Instructions
Rounding off to whole dollars. You
may enter decimal points and cents
when completing your return. However,
you should round off cents to whole
dollars on your return, forms, and
schedules to make completing your
return easier. You must either round off
all amounts on your return to whole
dollars, or use cents for all amounts. To
round, drop amounts under 50 cents
and increase amounts from 50 to 99
cents to the next dollar. For example,
$8.40 rounds to $8 and $8.50 rounds to
$9.

If you have to add two or more
amounts to figure the amount to enter
on a line, include cents when adding the
amounts and round off only the total.
Disposal of QOF investment. If the
corporation disposed of any investment
in a QOF during the tax year, check the
box on the top of Schedule D and see
the Instructions for Form 8949 for
additional reporting requirements.

Parts I and II
Lines 1a and 8a—Transactions not
reported on Form 8949. The
corporation can report on line 1a (for
short-term transactions) or line 8a (for
long-term transactions) the aggregate
totals from any transactions (other than
sales of collectibles) for which:
• The corporation received a Form
1099-B (or substitute statement) that
shows basis was reported to the IRS
and does not show any adjustments in
box 1f or box 1g;
• The Ordinary checkbox in box 2 of
Form 1099-B (or substitute statement) is
not checked;
• The QOF checkbox in box 3 of Form
1099-B (or substitute statement) is not
checked; and
• The corporation does not need to
make any adjustments to the basis or
type of gain or loss reported on Form
1099-B (or substitute statement), or to
its gain or loss.
See How To Complete Form 8949,
Columns (f) and (g) in the Instructions
for Form 8949 for details about possible
adjustments to the corporation's gain or
loss.
If the corporation chooses to report
these transactions on lines 1a and 8a,
do not report them on Form 8949. Also,
the corporation does not need to attach
a statement to explain the entries on
lines 1a and 8a.
Figure gain or loss on each line.
Subtract the cost or other basis in
column (e) from the proceeds (sales
price) in column (d). Enter the gain or
loss in column (h). Enter negative
amounts in parentheses.
Example 1—Basis reported to the
IRS. The corporation received a Form
1099-B reporting the sale of stock held
for 3 years, showing proceeds (in
box 1d) of $6,000 and cost or other
basis (in box 1e) of $2,000. Box 3 is
checked, meaning that basis was
reported to the IRS. The corporation
does not need to make any adjustments
to the amounts reported on Form
1099-B or enter any codes. This was
the corporation's only 2020 transaction.
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Instead of reporting this transaction on
Form 8949, the corporation can enter
$6,000 on Schedule D, line 8a, column
(d); $2,000 in column (e); and $4,000
($6,000 - $2,000) in column (h).
If the corporation had a second
transaction that was the same except
that the proceeds were $5,000 and the
basis was $3,000, combine the two
transactions. Enter $11,000 ($6,000 +
$5,000) on Schedule D, line 8a, column
(d); $5,000 ($2,000 + $3,000) in column
(e); and $6,000 ($11,000 - $5,000) in
column (h).
Example 2—Basis not reported to
the IRS. The corporation received a
Form 1099-B showing proceeds (in
box 1d) of $6,000 and cost or other
basis (in box 1e) of $2,000. Box 3 is not
checked, meaning that basis was not
reported to the IRS. Do not report this
transaction on line 1a or line 8a.
Instead, report the transaction on Form
8949. Complete all necessary pages of
Form 8949 before completing line 1b, 2,
3, 8b, 9, or 10 of Schedule D.
Example 3—Adjustment. The
corporation received a Form 1099-B
showing proceeds (in box 1d) of $6,000
and cost or other basis (in box 1e) of
$2,000. Box 3 is checked, meaning that
basis was reported to the IRS. However,
the basis shown in box 1e is incorrect.
Do not report this transaction on line 1a
or line 8a. Instead, report the transaction
on Form 8949. See the instructions for
Form 8949, columns (f), (g), and (h).
Complete all necessary pages of Form
8949 before completing line 1b, 2, 3, 8b,
9, or 10 of Schedule D.
Lines 1b, 2, 3, 8b, 9, and 10—Transactions reported on Form 8949.
Complete Form 8949 before completing
Schedule D, lines 1b, 2, 3, 8b, 9, and
10. Enter on Schedule D, lines 1b, 2,
and 3, respectively, the short-term totals
from all Forms 8949, Part I, line 2, with
box A, B, or C, respectively, checked.
Enter on Schedule D, lines 8b, 9, and
10, respectively, the long-term totals
from all Forms 8949, Part II, line 2, with
box D, E, or F, respectively, checked.
Line 6. Enter any unused capital loss
carryover. Attach a statement showing
how the carryover was computed.
Line 14. Enter the total capital gain
distributions paid by a RIC or REIT
during the year, regardless of how long
the corporation owned stock in the RIC
or REIT.
Also enter any amount received from
a RIC or REIT that qualifies as a
distribution in complete liquidation
under section 332(b) and is designated

by the RIC or REIT as a capital gain
distribution. See section 332(c).

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