What is schedule D Taxation?

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Schedule D is the Internal Revenue Service (IRS) tax form that allows you to figure your capital gains. Your capital gains may be taxed differently than regular income.

Types

Any time you sell something you own, you should report the gain or loss on Schedule D. Property could include stocks, bonds and real estate.

Information

On Schedule D, you must report what you sold, when you obtained it, when you sold it, how much you paid for it, how much you sold it for, and your gain or loss on the item for each item that you sold.

Time Frame

Whether your gains are taxed at the capital gains rate depends on how long you have held the property. If you have held it for at least 366 days, you get to pay a lower tax rate than if you held the item for less than a year.

Considerations

If you sold items at a loss, you can use the losses to offset capital gains. If your losses exceed your losses, you can claim a tax deduction of up to $3,000 ($1,500 if you are married filing separately) and carry forward excess losses to future years.

Requirement

If you are required to file Schedule D, you must file your taxes using Form 1040. If you cannot use Form 1040EZ or Form 1040A.

Source:

IRS: 10 Facts About Capital Gains and Losses

Bankrate: Reporting Your Capital Gains (and Losses); Kay Bell

More Information:

IRS: Schedule D; capitals gains and losses

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