Page 224 - Individual Forms & Instructions Guide

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
complete column (h). (For example, if at the top of Part II of this Form 8949 which begins on page 4 of Internal Rev-
you entered $5,000 in column (d) and (depending on how long you owned the enue Bulletin 1997-39 at IRS.gov/pub/
$6,000 in column (e), enter $1,000 in property). Complete all columns. Be- irs-irbs/irb97-39.pdf.
column (g). Then enter -0- ($5,000 − cause the loss isn't deductible, enter “L” • Bonds and other debt instruments.
$6,000 + $1,000) in column (h). Be sure in column (f). Enter the amount of the See Pub. 550.
to check box C at the top of Part I or box nondeductible loss as a positive number • Certain real estate subdivided for
F at the top of Part II of this Form 8949 in column (g). Complete column (h). sale that may be considered a capital as-
(depending on how long you owned the See the instructions for Form 8949, col- set. See section 1237.
home).) umns (f), (g), and (h). • Gain on the sale of depreciable
Capital Losses Example 1. You sold land you held property to a more-than-50%-owned en-
as an investment for 5 years to your tity or to a trust of which you are a bene-
You can deduct capital losses up to the brother for $10,000. Your basis was ficiary. See Pub. 544.
amount of your capital gains plus $3,000 $15,000. On Part II of Form 8949, check • Gain on the disposition of stock in
($1,500 if married filing separately). box F at the top. Enter $10,000 on Form domestic international sales corpora-
You may be able to use capital losses 8949, Part II, column (d). Enter $15,000 tions. See section 995(c).
that exceed this limit in future years. For in column (e). Because the loss isn't de- • Gain on the sale or exchange of
details, see the instructions for line 21. ductible, enter “L” in column (f) and stock in certain foreign corporations.
Be sure to report all of your capital gains $5,000 (the difference between $10,000 See section 1248.
and losses even if you can't use all of and $15,000) in column (g). In column • Transfer of property to a partner-
your losses in 2022. (h), enter -0- ($10,000 − $15,000 + ship that would be treated as an invest-
Nondeductible Losses $5,000). If this is your only transaction ment company if it were incorporated.
on this Form 8949, enter $10,000 on See Pub. 541.
Don't deduct a loss from a sale or ex- • Sales of stock received under a
change between certain related parties. Schedule D, line 10, column (d). Enter qualified public utility dividend rein-
$15,000 in column (e) and $5,000 in
This includes a direct or indirect sale or vestment plan. See Pub. 550.
exchange of property between any of the column (g). In column (h), enter -0- • Transfer of appreciated property to
($10,000 − $15,000 + $5,000).
following. a political organization. See section 84.
• Members of a family. Example 2. You received a Form • Transfer of property by a U.S. per-
• A corporation and an individual 1099-B showing proceeds (sales price) son to a foreign estate or trust. See sec-
who directly (or indirectly) owns more of $1,000 and basis of $5,000. Box 7 on tion 684.
than 50% of the corporation's stock (un- Form 1099-B is checked, indicating that • If you give up your U.S. citizen-
less the loss is from a distribution in your loss of $4,000 ($1,000 − $5,000) ship, you may be treated as having sold
complete liquidation of a corporation). isn't allowed. On the top of Form 8949, all your property for its fair market val-
• A grantor and a fiduciary of a check box A or box B in Part I or box D ue on the day before you gave up your
trust. or box E in Part II (whichever applies). citizenship. This also applies to
• A fiduciary and a beneficiary of Enter $1,000 in column (d) and $5,000 long-term U.S. residents who cease to be
the same trust. in column (e). Because the loss isn't de- lawful permanent residents. For details,
• A fiduciary of a trust and a fiducia- ductible, enter “L” in column (f) and exceptions, and rules for reporting these
ry (or beneficiary) of another trust if $4,000 (the difference between $1,000 deemed sales, see Pub. 519 and Form
both trusts were created by the same and $5,000) in column (g). In column 8854.
grantor. (h), enter -0- ($1,000 − $5,000 + • In general, no gain or loss is recog-
• An executor of an estate and a ben- $4,000). nized on the transfer of property from an
eficiary of that estate, unless the sale or At-risk rules. If you disposed of (a) an individual to a spouse or a former
exchange was to satisfy a pecuniary be- asset used in an activity to which the spouse if the transfer is incident to a di-
quest (that is, a bequest of a sum of at-risk rules apply, or (b) any part of vorce. See Pub. 504.
money). your interest in an activity to which the • Amounts received on the retire-
• An individual and a tax-exempt or- at-risk rules apply, and you have ment of a debt instrument are generally
ganization controlled directly (or indi- amounts in the activity for which you treated as received in exchange for the
rectly) by the individual or the individu- aren't at risk, see the Instructions for debt instrument. See Pub. 550.
al's family. Form 6198. • Any loss on the disposition of con-

See Pub. 544 for more details on Passive activity rules. If the loss is al- verted wetland or highly erodible crop-
sales and exchanges between related lowable under the at-risk rules, it may be land that is first used for farming after
parties. subject to the passive activity rules. See March 1, 1986, is reported as a
Form 8582 and its instructions for de- long-term capital loss on Form 8949, but
Report a transaction that results in a tails on reporting capital gains and los- any gain is reported as ordinary income
nondeductible loss in Part I or Part II of ses from a passive activity. on Form 4797.
Form 8949 (depending on how long you Items for Special Treatment • If qualified dividends that you re-
held the property). Unless you received ported on Form 1040, 1040-SR, or
a Form 1099-B for the sale or exchange, • Transactions by a securities dealer. 1040-NR, line 3a, include extraordinary
check box C at the top of Part I or box F See section 475 and Rev. Rul. 97-39, dividends, any loss on the sale or ex-

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