Answers · Individual tax · Form 1040
Short-Term vs. Long-Term Capital Gains
Schedule D summarizes capital gains/losses, generally supported by Form 8949 and basis records.
This question is answered in full on the main page for it.
How it works
The rule, and what it turns on.
Gain/loss depends on amount realized, adjusted basis, holding period and character; capital loss limitations and carryovers may apply.
Example
Stock cost $10,000, sold for $15,000 after 18 months generally creates a $5,000 long-term capital gain before adjustments.
Common mistakes
What we see go wrong, and what we do instead.
- Using sales proceeds as gain.
- Missing basis/carryovers.
A better approach
- Reconcile broker forms to taxpayer basis records.
Authority
Where this comes from, so you can check it.
IRC §§1001, 1011-1016, 1211, 1221-1222; Schedule D and Form 8949 instructions.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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