The IRS introduced a new form for 2011 – form 8949, Sales and Other Dispositions of Capital Goods. Schedule D-1, which was previously part of a continuous income statement that used to report individual transactions, has been deleted and Schedule D has been revised to serve as a summary of capital gains and losses.
As indicated by the IRS, many businesses that were previously reported on Schedule D or D-1 are now reported on Form 8949 in 2011. These include sales or exchanges of capital goods; gains from involuntary conversions, except accidents or thefts, of capital goods which are not intended for business or profit; and non-business bad debts.
As explained by Jobe Dupree of Bond Beebe Accountants and Advisors, the new form 8949 coincides with a change in tax laws regarding the reporting basis. Beginning in 2012, stock brokers must report on Form 1099-B expenses from stock acquired in the corporation on or after January 2011. Beginning in 2012, cost base information will be required on the 1099-B for mutual funds and stock in a corporation that is purchased through a dividend reinvestment plan.
Form 8949 has two separate pages or sections. Part I is for short term transactions and Part II is for long term. At the head of each section there are three boxes to choose from. One is for transactions reported on Form 1099-B with the basis reported to the IRS. The second is for transactions reported on Form 1099-B without a basis. and it is the third of all other transactions. A separate Form 8949 must be filed for each check box.
The total on each part of Form 8949 is transferred to the appropriate line on Schedule D.
There are cases in which it is necessary to adjust the cost basis reported on Form 1099-B. As indicated by myStockOptions.com, the reported basis may be incomplete if you sold stock that was acquired from stock grants or through an employee stock purchase plan. The instructions for Schedule D and Form 8949 provide a series of codes that can be entered in column b of Form 8949, with the appropriate adjustment reported in column g.
According to the Instructions for Schedule D (and form 8949), instead of reporting each transaction on a separate line of form 8949, you can attach a statement, such as a statement from your broker, that contains the same form. Then you’ll want to report the amounts from each attachment on Form 8949, depending on the box you’re looking for.
If you want to e-file your returns and use the attachment for entering individual transactions, you must send IRS form 8453, US individual Tax Return< /a> Transmittal for IRS e-file Return, and attach Form 8949 or similar statement with the same information.
Sources:
Form 8453, US Individual Taxation Transmittal for IRS e-file Return, IRS
Form 8949, Sales and Other Dispositions of Capital Goods, IRS
To let you know: New IRS Form 8949 For Reporting Stock Sales On Your Tax Return, myStockOptions.com
Instructions for Schedule D (and form 8949), IRS
Jobe Dupree, “IRS Changes to Schedule D and Introduction of New Form 8949”, Bond Beebe Accountants and Advisors
Schedule D, Capital Gains and Losses, IRS
Report:
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www.irs.gov/formspubs/article/0,,id =239592,00.html
