2023 Instructions for Form 8949

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2023

Instructions for Form 8949

Sales and Other Dispositions of Capital Assets

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to Form

8949 and its instructions, such as legislation enacted after they

were published, go to

IRS.gov/Form8949.

What’s New

New code P. Use code “P” to report gain or loss on the sale or

exchange by a nonresident alien individual, foreign trust, foreign

estate, or foreign corporation of an interest in a partnership that

is engaged in a U. S. trade or business. Code P will apply to Part

I and Part II, as applicable, of Form 8949.

General Instructions

File Form 8949 with the Schedule D for the return you are filing.

This includes Schedule D of Forms 1040, 1040-SR, 1041, 1065,

8865, 1120, 1120-S, 1120-C, 1120-F, 1120-FSC, 1120-H,

1120-IC-DISC, 1120-L, 1120-ND, 1120-PC, 1120-POL,

1120-REIT, 1120-RIC, and 1120-SF; and certain Forms 990-T.

Complete Form 8949 before you complete line 1b, 2, 3, 8b, 9, or

10 of Schedule D.

Purpose of Form

Use Form 8949 to report sales and exchanges of capital assets.

Form 8949 allows you and the IRS to reconcile amounts that

were reported to you and the IRS on Forms 1099-B or 1099-S

(or substitute statements) with the amounts you report on your

return. If you receive Forms 1099-B or 1099-S (or substitute

statements), always report the proceeds (sales price) shown on

the form (or statement) in column (d) of Form 8949. If Form

1099-B (or substitute statement) shows that the cost or other

basis was reported to the IRS, always report the basis shown on

that form (or statement) in column (e). If any correction or

adjustment to these amounts is needed, make it in column (g).

See

How To Complete Form 8949, Columns (f) and (g), later, for

details about these adjustments.

If all Forms 1099-B (or all substitute statements) you received

show basis was reported to the IRS and no correction or

adjustment is needed, you may not need to file Form 8949. See

Exception 1 under the instructions for line 1, later.

If you received a Schedule A to Form 8971 for property and

Part 2, column C, of the Schedule A indicates that the property

increased the estate tax liability, you will be required to report a

basis consistent with the final estate tax value of the property

reported in Part 2, column E, of the schedule. See Schedule A to

Form 8971—Consistent basis reporting under Column (e)—Cost

or Other Basis, later, for more information on consistent basis

reporting and the amount you will report on Form 8949.

Individuals. Individuals use Form 8949 to report the following.

•

The sale or exchange of a capital asset reported on a Form

1099-K.

•

Gain or loss on the sale or exchange by a nonresident alien

individual of an interest in a partnership that is engaged in a U.S.

trade or business.

•

The sale or exchange of a capital asset not reported on

another form or schedule.

•

Gains from involuntary conversions (other than from casualty

or theft) of capital assets not used in your trade or business.

•

Nonbusiness bad debts.

•

Worthlessness of a security.

•

The election to defer capital gain invested in a qualified

opportunity fund (QOF).

•

The disposition of interests in QOFs.

If you are filing a joint return, complete as many copies of

Form 8949 as you need to report all of your and your spouse's

transactions. You and your spouse may list your transactions on

separate forms or you may combine them. However, you must

include on your Schedule D the totals from all Forms 8949 for

both you and your spouse.

Corporations and partnerships. Corporations and

partnerships use Form 8949 to report the following.

•

The sale or exchange of a capital asset not reported on

another form or schedule.

•

Gain or loss on the sale or exchange by a foreign corporation

of an interest in a partnership that is engaged in a U.S. trade or

business.

•

Sale of stock of a specified 10%-owned foreign corporation,

adjusted for the dividends-received deduction under section

245A, but only if the sale would otherwise generate a loss.

•

Nonbusiness bad debts.

•

Undistributed long-term capital gains from Form 2439.

•

Worthlessness of a security.

•

The election to defer capital gain invested in a QOF.

•

The disposition of interests in QOFs.

Corporations also use Form 8949 to report their share of gain

(or loss) from a partnership, estate, or trust.

For corporations and partnerships meeting certain criteria, an

exception to some of the normal requirements for completing

Form 8949 has been provided. See

Special provision for certain

corporations, partnerships, securities dealers, and other

qualified entities under the instructions for line 1, later.

Estates and trusts. Estates and trusts (including non-grantor

trusts) use Form 8949 to report the following.

•

Gain or loss on the sale or exchange by a foreign trust or

estate of an interest in a partnership that is engaged in a U.S.

trade or business.

•

The sale or exchange of a capital asset not reported on

another form or schedule.

•

Nonbusiness bad debts.

•

Worthlessness of a security.

•

The election to defer capital gain invested in a QOF.

•

The disposition of interests in QOFs.

Schedule D. Use Schedule D for the following purposes.

•

To figure the overall gain (or loss) from transactions reported

on Form 8949.

•

To report a gain from Form 6252 or Part I of Form 4797.

•

To report a gain (or loss) from Form 4684, 6781, or 8824.

•

To report capital gain distributions not reported directly on

Form 1040 or 1040-SR, line 7 (or effectively connected capital

gain distributions not reported directly on Form 1040-NR, line 7).

•

To report a capital loss carryover from the previous tax year to

the current tax year.

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•

To report your share of a gain (or loss) from a partnership, S

corporation, estate, or trust. (However, corporations report this

type of gain (or loss) on Form 8949.)

•

To report certain transactions you don't have to report on Form

8949, such as transactions reported to you on a Form 1099-B (or

substitute statement) showing basis was reported to the IRS and

for which you have no adjustments, as explained under

Exception 1, later.

Individuals, estates, and trusts also use Schedule D to report

undistributed long-term capital gains from Form 2439.

Additional information. See the instructions for the

Schedule D you are filing for detailed information about other

topics, including the following.

•

Other forms you may have to file.

•

The definition of capital asset.

•

Certain digital assets, such as Bitcoin. Also, see the

Instructions for Form 1040 and IRS.gov/VirtualCurrencyFAQs.

•

Reporting capital gain distributions, undistributed capital

gains, the sale of a main home, the sale of capital assets held for

personal use, or the sale of a partnership interest.

•

Capital losses, nondeductible losses, and losses from wash

sales.

•

Traders in securities.

•

Short sales.

•

Gain or loss from options.

•

Installment sales.

•

Demutualization of life insurance companies.

•

Exclusion or rollover of gain from the sale of qualified small

business (QSB) stock.

•

Any other rollover of gain.

•

Exclusion of gain from the sale or exchange of DC Zone

assets or qualified community assets.

•

Deferral of gain invested in a QOF.

•

Certain other items that get special treatment.

•

Special reporting rules for corporations, partnerships, estates,

and trusts in certain situations.

For more information about reporting on Forms 6252, 4797,

4684, 6781, and 8824, see the instructions for those forms. See

Pub. 544 and Pub. 550 for more details.

Basis and Recordkeeping

Basis is the amount of your investment in property for tax

purposes. The basis of property you buy is usually its cost. You

need to know your basis to figure any gain (or loss) on the sale

or other disposition of the property. You must keep accurate

records that show the basis and, if applicable, adjusted basis of

your property. Your records should show the purchase price,

including commissions; increases to basis, such as the cost of

improvements; and decreases to basis, such as depreciation,

nondividend distributions on stock, and stock splits.

For more information on basis, see Column (e)—Cost or

Other Basis, later, and the following publications.

•

Pub. 550, Investment Income and Expenses.

•

Pub. 551, Basis of Assets.

If you lost or didn't keep records to determine your basis in

securities, contact your broker for help. If you receive a Form

1099-B (or substitute statement), your broker may have reported

your basis for these securities in box 1e.

The IRS partners with companies that offer Form 8949

software that can import trades from many brokerage

firms and accounting software that can help you keep

track of your adjusted basis in securities. To find out more, go to

IRS.gov/Efile.

Short-Term or Long-Term

Separate your capital gains and losses according to how long

you held or owned the property.

The holding period for short-term capital gains and losses is

generally 1 year or less. Taxpayers that hold certain partnership

interests in connection with the performance of services may be

subject to different holding period rules. See the Schedule D

instructions for more information. Report these transactions on

Part I of Form 8949 (or line 1a of Schedule D if you can use

Exception 1 under the instructions for line 1, later).

The holding period for long-term captal gains and losses is

generally more than 1 year. Taxpayers that hold certain

partnership interests in connection with the performance of

services may be subject to different holding period rules. See the

Schedule D instructions for more information. Report these

transactions on Part II of Form 8949 (or line 8a of Schedule D if

you can use

Exception 1 under the instructions for line 1, later).

To figure the holding period, begin counting on the day after

you received the property and include the day you disposed of it.

Generally, if you disposed of property that you acquired by

inheritance, report the disposition as a long-term gain (or loss)

regardless of how long you held the property.

A nonbusiness bad debt must be treated as a short-term

capital loss. See Pub. 550 for what qualifies as a nonbusiness

bad debt and how to enter it on Part I of Form 8949.

Form 1099-B. If you received a Form 1099-B (or substitute

statement) for a transaction, box 2 may help you determine

whether your gain (or loss) is short term, long term, or subject to

special rules. If box 2 is blank and code X is in the "Applicable

checkbox on Form 8949" box near the top of Form 1099-B, your

broker doesn't know whether your gain (or loss) is short term or

long term. Use your own records to determine whether your gain

(or loss) is short term or long term.

Corporation's Gains and Losses From

Partnerships, Estates, or Trusts

Report a 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 (or loss)

on Part I (with box C checked) and a net long-term capital gain

(or loss) on Part II (with box F checked). In column (a), enter

“From Schedule K-1 (Form 1065)” or “From Schedule K-1 (Form

1041),” whichever applies; enter the gain (or loss) in column (h);

and leave all other columns blank.

If more than one Schedule K-1 is received, report each on a

separate row. Include additional identifying information, such as

“Partnership X.”

Section 1061 Reporting

Section 1061 recharacterizes certain long-term capital gains of a

partner that holds one or more applicable partnership interests

as short-term capital gains. An applicable partnership interest is

an interest in a partnership that is transferred to or held by a

taxpayer, directly or indirectly, in connection with the

performance of substantial services by the taxpayer or any other

related person, in an applicable trade or business. See Section

1061 Reporting Guidance FAQs for reporting of section 1061

recharacterization amounts on the Form 8949.

Digital Assets

A digital asset is a digital representation of value that is recorded

on a cryptographically secured distributed ledger or any similar

technology. A digital asset is treated as property, and general tax

principles that apply to property transactions apply to

transactions using digital assets, including how to figure your

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holding period for short-term and long-term capital gains and

losses explained earlier under Short-Term or Long-Term. Digital

assets include property that has been referred to as “convertible

virtual currency,” “cryptocurrency,” and “non-fungible tokens.” If a

particular asset has the characteristics of a digital asset, it will be

treated as a digital asset for federal income tax purposes. For

more information on the tax treatment of digital assets, see

Notice 2014-21 (as modified by Notice 2023-34), Rev. Rul.

2019-24, Rev. Rul. 2023-14, and

IRS.gov/VirtualCurrencyFAQs.

For more information on the tax treatment of property

transactions and on short-term and long-term capital gains and

losses, see Pub. 544.

Rounding Off to Whole Dollars

You can round off cents to whole dollars on Form 8949. If you do

round to whole dollars, round all amounts. To round, drop cent

amounts under 50 cents and increase cent amounts over 49

cents to the next dollar. For example, $1.49 becomes $1 and

$1.50 becomes $2.

Specific Instructions

Report short-term gains and losses on Part I. Report long-term

gains and losses on Part II.

Line 1

Enter all sales and exchanges of capital assets, including stocks,

bonds, and real estate (if not reported on line 1a or 8a of

Schedule D or on Form 4684, 4797, 6252, 6781, or 8824).

Include these transactions even if you didn't receive a Form

1099-B or 1099-S (or substitute statement) for the transaction.

However, if the property you sold was your main home, see

Sale

of Your Home in the Instructions for Schedule D (Form 1040).

Enter all losses from the disposition of a portion of a MACRS

asset not used in a trade or business but held for investment or

for use in a not

-for-profit activity. If you have a gain from the

partial disposition of a MACRS asset, see Disposition of

Depreciable Property Not Used in Trade or Business in the Form

4797 instructions.

If you received a Form 1099-K reporting proceeds from the

sale of personal property that resulted in gain, that transaction is

taxable and must be entered on Form 8949. Loss on the sale of

personal property is not deductible, and generally should not be

reported on Form 8949. However, if you receive a Form 1099-K

reporting proceeds from the sale of personal property that

resulted in a loss, you should report the loss with an offsetting

entry. You can do this either on Form 1040, Schedule 1, Part 1,

or on Form 8949, by entering an adjustment when reporting the

proceeds and basis of the property, as follows. Enter “L” in

column (f) as the code explaining the loss is nondeductible.

Then enter the amount of the nondeductible loss as a positive

number in column (g). Enter the proceeds in column (d), enter

the cost basis in column (e), enter “L” in column (f), and enter in

column (g) the amount of the adjustment that will result in $0 as

the gain or loss in column (h).

Enter the details of each transaction on a separate row

(unless one of the Exceptions to reporting each transaction on a

separate row, described later, applies to you).

Part I. Use a separate Part I for each type of short-term

transaction described in the text for one of the boxes (A, B, or C)

at the top of Part I. Include on each Part I only transactions

described in the text for the box you check (A, B, or C). Check

only one box on each Part I. For example, if you check box A,

include on that Part I only short-term transactions reported to you

on a statement showing basis was reported to the IRS. Complete

as many copies of Part I as you need to report all transactions of

each type (A, B, or C).

If you are attaching multiple Forms 8949 to your return, attach

the Form(s) 8949 that lists code "Z" in column (f) first.

If you received a Form 1099-B for a transaction, the

“Applicable checkbox on Form 8949” box near the top of that

form may help you determine which box to check on the Part I

where you report that transaction. A substitute statement you get

instead of Form 1099-B may also tell you which box to check.

Box A. Report on a Part I with box A checked all short-term

transactions reported to you on Form 1099-B (or substitute

statement) with an amount shown for cost or other basis unless

the statement indicates that amount wasn't reported to the IRS. If

your statement shows cost or other basis but indicates it wasn't

reported to the IRS (for example, if box 12 of Form 1099-B isn't

checked), see Box B below.

If you don't need to make any adjustments to the basis

or type of gain (or loss) reported to you on Form 1099-B

(or substitute statement) or to your gain (or loss) for any

transactions for which basis has been reported to the IRS

(normally reported on Form 8949 with box A checked), you don't

have to include those transactions on Form 8949. Instead, you

can report summary information for those transactions directly

on Schedule D. For more information, see

Exception 1, later.

Box B. Report on a Part I with box B checked all short-term

transactions reported to you on Form 1099-B (or substitute

statement) without an amount shown for cost or other basis or

showing that cost or other basis wasn't reported to the IRS. If

your statement shows cost or other basis for the transaction was

reported to the IRS (for example, if box 12 of Form 1099-B is

checked), see

Box A above.

Box C. Report on a Part I with box C checked all short-term

transactions for which you can't check box A or B because you

didn't receive a Form 1099-B (or substitute statement).

Part II. Use a separate Part II for each type of long-term

transaction described in the text for one of the boxes (D, E, or F)

at the top of Part II. Include on each Part II only transactions

described in the text for the box you check (D, E, or F). Check

only one box on each Part II. For example, if you check box D,

include on that Part II only long-term transactions reported to you

on a statement showing basis was reported to the IRS. Complete

as many copies of Part II as you need to report all transactions of

each type (D, E, or F).

If you are attaching multiple Forms 8949 to your return, attach

the Form(s) 8949 that lists code "Z" for investments in a QOF in

column (f) first.

If you received a Form 1099-B for a transaction, the

“Applicable checkbox on Form 8949” box near the top of that

form may help you determine which box to check on the Part II

where you report that transaction. A substitute statement you get

instead of Form 1099-B may also tell you which box to check.

Box D. Report on a Part II with box D checked all long-term

transactions reported to you on Form 1099-B (or substitute

statement) with an amount shown for cost or other basis unless

the statement indicates that amount wasn't reported to the IRS. If

your statement shows cost or other basis but indicates it wasn't

reported to the IRS (for example, if box 12 of Form 1099-B isn't

checked), see Box E below.

If you don't need to make any adjustments to the basis

or type of gain (or loss) reported to you on Form 1099-B

(or substitute statement) or to your gain (or loss) for any

transactions for which basis has been reported to the IRS

(normally reported on Form 8949 with box D checked), you don't

have to include those transactions on Form 8949. Instead, you

can report summary information for those transactions directly

on Schedule D. For more information, see Exception 1, later.

Box E. Report on a Part II with box E checked all long-term

transactions reported to you on Form 1099-B (or substitute

TIP

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statement) without an amount shown for cost or other basis or

showing that cost or other basis wasn't reported to the IRS. If

your statement shows cost or other basis for the transaction was

reported to the IRS (for example, if box 12 of Form 1099-B is

checked), see Box D above.

Box F. Report on a Part II with box F checked all long-term

transactions for which you can't check box D or E because you

didn't receive a Form 1099-B (or substitute statement).

You don't need to complete and file an entire copy of Form

8949 (Parts I and II) if you can check a single box to describe all

your transactions. In that case, complete and file either Part I or II

and check the box that describes the transactions. Otherwise,

complete a separate Part I or II for each category of your

transactions, as described above.

Include on your Schedule D the totals from all your Parts I and

II. Form 8949 and Schedule D explain how to do this.

Exceptions to reporting each transaction on a separate

row. There are exceptions to the rule that you must report each

of your transactions on a separate row of Part I or II. Any

taxpayer who qualifies can use Exception 1 or Exception 2

below. Taxpayers who file Form 1120-S or Form 1065 and other

qualified entities should see Special provision for certain

corporations, partnerships, securities dealers, and other

qualified entities, later.

Exception 1. Form 8949 isn't required for certain

transactions. You may be able to aggregate those transactions

and report them directly on either line 1a (for short-term

transactions) or line 8a (for long-term transactions) of

Schedule D. This option applies only to transactions (other than

sales of collectibles) for which:

•

You received a Form 1099-B (or substitute statement) that

shows basis was reported to the IRS and doesn't show any

adjustments in box 1f or 1g;

•

The Ordinary box in box 2 isn’t checked;

•

You don't need to make any adjustments to the basis or type

of gain (or loss) reported on Form 1099-B (or substitute

statement), or to your gain (or loss); and

•

You aren’t electing to defer income due to an investment in a

QOF and aren’t terminating deferral from an investment in a

QOF.

If you choose to report these transactions directly on

Schedule D, you don't need to include them on Form 8949 and

don't need to attach a statement. For more information, see the

Schedule D instructions.

If you qualify to use Exception 1 and also qualify to use

Exception 2, you can use both. Report the transactions that

qualify for Exception 1 directly on either line 1a or 8a of

Schedule D, whichever applies. Report the rest of your

transactions as explained in

Exception 2.

Exception 2. Instead of reporting each of your transactions

on a separate row of Part I or II, you can report them on an

attached statement containing all the same information as Parts I

and II and in a similar format (that is, description of property,

dates of acquisition and disposition, proceeds, basis, adjustment

and code(s), and gain (or loss)). Use as many attached

statements as you need. Enter the combined totals from all your

attached statements on Parts I and II with the appropriate box

checked.

For example, report on Part I with box B checked all

short-term gains and losses from transactions your broker

reported to you on a statement showing basis wasn't reported to

the IRS. Enter the name of the broker followed by the words “see

attached statement” in column (a). Leave columns (b) and (c)

blank. Enter “M” in column (f). If other codes also apply, enter all

of them in column (f). Enter the totals that apply in columns (d),

(e), (g), and (h). If you have statements from more than one

broker, report the totals from each broker on a separate row.

Don't enter “Available upon request” and summary totals in

lieu of reporting the details of each transaction on Part I or II or

attached statements.

Exception 2 is not available for the election to defer

eligible gain by investing in a QOF. Taxpayers who elect

to defer eligible gain must report the details of each

investment in a QOF on Form 8949 in the manner described

under

How To Report an Election To Defer Tax on Eligible Gain

Invested in a QOF, later.

Special provision for certain corporations, partnerships,

securities dealers, and other qualified entities. This special

provision applies to certain corporations, partnerships, securities

dealers, and nonprofit organizations. Individual taxpayers aren't

eligible except in rare circumstances.

You may enter summary totals instead of reporting the details

of each transaction on a separate row of Part I or II or on

attached statements if:

1. You file Form 1120-S or 1065, or are a taxpayer exempt

from receiving Form 1099-B, such as a corporation or exempt

organization, under Regulations section 1.6045-1(c)(3)(i)(B);

and

2. You must report more than five transactions for that part.

If this provision applies to you, enter the summary totals on

line 1. For short-term transactions, check box C at the top of Part

I even if the summary totals include transactions described in the

text for box A or B. For long-term transactions, check box F at the

top of Part II even if the summary totals include transactions

described in the text for box D or E. Enter “Available upon

request” in column (a). Leave columns (b) and (c) blank. Enter

“M” in column (f). If other codes also apply, enter all of them in

column (f). Enter the totals that apply in columns (d), (e), (g), and

(h).

Don't use a separate row for the totals from each broker.

Instead, enter the summary totals from all brokers on a single

row of Part I (with box C checked) or Part II (with box F checked).

This special provision is not available for the election to

defer eligible gain by investing in a QOF. Taxpayers who

elect to defer eligible gain must report the details of each

investment in a QOF on Form 8949 in the manner described

under

How To Report an Election To Defer Tax on Eligible Gain

Invested in a QOF, later.

E-file. If you e-file your return but choose not to report each

transaction on a separate row on the electronic return, you must

attach Form 8949 to Form 8453 (or the appropriate form in the

Form 8453 series) and mail the forms to the IRS. (However, you

can't attach a paper Form 8949 to Form 8453-FE.) You can

attach one or more statements containing all the same

information as Form 8949, instead of attaching Form 8949, if the

statements are in a format similar to Form 8949.

However, this doesn't apply to transactions that qualify for

Exception 1 or the Special provision for certain corporations,

partnerships, securities dealers, and other qualified entities,

earlier. In those cases, an attachment, a statement, or Form

8453 isn’t required.

Charitable gift annuity. If you are the beneficiary of a

charitable gift annuity and receive a Form 1099-R showing an

amount in box 3, report the box 3 amount on a Part II with box F

checked. Enter “Form 1099-R” in column (a). Enter the box 3

amount in column (d). Also, complete column (h).

Form 2438. Enter any net short-term capital gain from line 4 of

Form 2438 on a Part I with box C checked. Enter “Net short-term

capital gain from Form 2438, line 4” in column (a), enter the gain

in column (h), and leave all other columns blank.

CAUTION

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Enter any amount from line 12 of Form 2438 on a Part II with

box F checked. Enter “Undistributed capital gains not designated

(from Form 2438)” in column (a), enter the amount of the gain in

column (h), and leave all other columns blank.

Form 2439. Corporations and partnerships report undistributed

long-term capital gains from Form 2439 on a Part II with box F

checked. Enter “From Form 2439” in column (a), enter the gain in

column (h), and leave all other columns blank. Individuals report

undistributed long-term capital gains from Form 2439 on line 11

of Schedule D (Form 1040). Estates and trusts report those

amounts on line 11 of Schedule D (Form 1041).

Schedule P (Form 1040-NR). A nonresident alien individual,

foreign trust, or foreign estate that sells or exchanges an interest

in a partnership engaged in a U.S. trade or business reports

recognized effectively connected capital gain (or loss) on a Part

I, if short term capital gain (or loss) and Part II, if long term capital

gain (or loss), checking box (C) on Part I or box (F) on Part II, as

applicable. Enter “From Schedule P (Form 1040-NR)” in column

(a), enter the code “P” in column (f), and enter the gain (or loss)

in column (h) with all other columns filled in.

Schedule P (Form 1120-F). A foreign corporation that sells or

exchanges an interest in a partnership engaged in a U.S. trade

or business reports recognized effectively connected capital gain

(or loss) on a Part I, if short term capital gain (or loss) and Part II,

if long term capital gain (or loss), checking box (C) on Part I or

box (F) on Part II, as applicable. Enter “From Schedule P (Form

1120-F)” in column (a), enter the code “P” in column (f), and

enter the gain (or loss) in column (h) with all other columns filled

in.

Contingent payment debt instruments. If you sell a taxable

contingent payment debt instrument subject to the

noncontingent bond method at a gain, your gain is ordinary

income (interest income), even if you hold the debt instrument as

a capital asset. If you sell a taxable contingent payment debt

instrument subject to the noncontingent bond method at a loss,

your loss is an ordinary loss to the extent of your 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

your prior OID inclusions as a capital loss. See Regulations

section 1.1275-4(b) for exceptions to these rules.

If you received a Form 1099-B (or substitute statement)

reporting the sale of a taxable contingent payment debt

instrument subject to the noncontingent bond method and the

Ordinary box in box 2 is checked, an adjustment may be

required. See the

Worksheet for Contingent Payment Debt

Instrument Adjustment in Column (g), later, to figure the

adjustment to enter in column (g).

See Pub. 550 or Pub. 1212 for more details on any special

rules or adjustments that might apply.

Net asset value (NAV) method for money market funds. If

you have a capital gain (or loss) determined under the NAV

method with respect to shares in a money market fund, enter the

name of the fund followed by “(NAV)” in column (a) on a Part I

with box C checked. Enter the net gain (or loss) in column (h).

Leave all other columns blank. No long-term capital gain (or

loss) can be entered under the NAV method.

Nondividend distributions. Distributions from a corporation

with respect to its stock that are a return of your cost (or other

basis) aren’t taxed until you recover your cost (or other basis),

determined on a share-by-share basis. Reduce your cost (or

other basis) in a share by the distributions allocable to such

share. After you have recovered your entire cost (or other basis)

in a share, any later nondividend distribution allocable to that

share is taxable as a capital gain. Enter the name of the payer of

any taxable nondividend distributions in column (a) on a Part I

with box C checked or Part II with box F checked (depending on

how long you held the stock). Enter the taxable part of the

distribution in columns (d) and (h). Each payer of a nondividend

distribution should send you a Form 1099-DIV showing the

amount of the distribution in box 3.

Dispositions of depreciable property not used in a trade or

business. Report on Form 8949 a loss from the sale or

exchange of depreciable property not used in a trade or

business but held for investment or for use in a not

-for-profit

activity. If you have a gain from the sale of such property, see

Disposition of Depreciable Property Not Used in Trade or

Business in the Form 4797 instructions.

Other gains (or losses) where sales price or basis isn't

known. If you have another gain (or loss) for which you don't

know the sales price or basis (such as a long-term capital gain

from Form 8621), enter a description of the gain (or loss) in

column (a) on a Part I with box C checked or Part II with box F

checked (depending on how long you held the property). If you

have a gain, enter it in columns (d) and (h). If you have a loss,

enter it in columns (e) and (h). Complete any other columns you

can.

Column (a)—Description of Property

For stock, include the number of shares. You can use stock ticker

symbols or abbreviations to describe the property as long as

they are based on the descriptions of the property as shown on

Form 1099-B or 1099-S (or substitute statement).

For a digital asset, include the full name or an abbreviated

symbol of the digital asset and the exact units sold or disposed

of in the transaction, and include the sale transaction ID number,

if available.

Column (b)—Date Acquired

Enter in this column the date you acquired the property. Enter the

trade date for stocks and bonds you purchased on an exchange

or over-the-counter market. For a short sale, enter the date you

acquired the property delivered to the broker or lender to close

the short sale. For property you previously elected to treat as

having been sold and reacquired on January 1, 2001 (or January

2, 2001, for readily tradable stock), enter the date of the deemed

sale and reacquisition.

If you received a Form 1099-B (or substitute statement),

box 1b may help you determine when you acquired the property.

Inherited property. Generally, if you disposed of property that

you acquired by inheritance, report the sale or exchange on a

Part II with the appropriate box checked (D, E, or F). Enter

“INHERITED” in column (b).

Stock acquired on various dates. If you sold a block of stock

(or similar property) that you acquired through several different

purchases, you may report the sale on one row and enter

“VARIOUS” in column (b). However, you must still report the

short-term gain (or loss) on the sale on Part I and the long-term

gain (or loss) on Part II.

Column (c)—Date Sold or Disposed Of

Enter in this column the date you sold or disposed of the

property. Use the trade date for stocks and bonds traded on an

exchange or over-the-counter market. For a short sale, enter the

date you delivered the property to the broker or lender to close

the short sale.

If you received a Form 1099-B (or substitute statement),

box 1c may help you determine when you sold or disposed of the

property.

Column (d)—Proceeds (Sales Price)

Follow the instructions below that apply to your transaction(s).

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You didn't receive a Form 1099-B or 1099-S (or substitute

statement). If you didn't receive a Form 1099-B or 1099-S (or

substitute statement) for a transaction, enter in column (d) the

net proceeds. The net proceeds equal the gross proceeds minus

any selling expenses (such as broker’s fees, commissions, and

state and local transfer taxes). If you sold a call option and it was

exercised, you adjust the sales price of the property sold under

the option for any option premiums (as instructed under

Gain or

Loss From Options in the Instructions for Schedule D (Form

1040)).

You received a Form 1099-B or 1099-S (or substitute state-

ment). If you received a Form 1099-B or 1099-S (or substitute

statement) for a transaction, enter in column (d) the proceeds

shown on the form or statement you received. If there are any

selling expenses or option premiums that aren't reflected on the

form or statement you received (by an adjustment to either the

proceeds or basis shown), enter “E” in column (f) and the

necessary adjustment in column (g). See the example under

Column (g)—Amount of Adjustment, later.

If the proceeds you received were more than shown on Form

1099-B or 1099-S (or substitute statement), enter the correct

proceeds in column (d). This might happen if, for example, box 4

on Form 1099-S is checked.

You shouldn't have received a Form 1099-B (or substitute

statement) for a transaction merely representing the return of

your original investment in a nontransferable obligation, such as

a savings bond or a certificate of deposit. But if you did, report

the proceeds shown on Form 1099-B (or substitute statement) in

both columns (d) and (e).

Column (e)—Cost or Other Basis

The basis of property you buy is usually its cost, including the

purchase price and any costs of purchase, such as

commissions. You may not be able to use the actual cost as the

basis if you inherited the property, got it as a gift, or received it in

a tax-free exchange or involuntary conversion or in connection

with a “wash sale.” If you don't use the actual cost, attach an

explanation of your basis.

The basis of property acquired by gift is generally the basis of

the property in the hands of the donor. The basis of inherited

property is generally the fair market value at the date of death.

See Pub. 551 for details.

If you elected to recognize gain on property held on January

1, 2001, your basis in the property is its closing market price or

fair market value, whichever applies, on the date of the deemed

sale and reacquisition, whether the deemed sale resulted in a

gain or an unallowed loss.

Schedule A to Form 8971—Consistent basis reporting. If

you received a Schedule A to Form 8971 from an executor of an

estate or other person required to file an estate tax return and

you are a beneficiary who receives (or is to receive) property

from that estate, you will be required to report a basis consistent

with the final estate tax value of the property if Part 2, column C,

of the Schedule A you received indicates that the property

increased the estate tax liability of the decedent. In this case,

first use an amount that is equal to or less than the final estate

tax value listed in Part 2, column E, of the Schedule A. This

amount is your initial basis in the property. You then adjust your

initial basis in the property, as described under

Adjustments to

basis, later. The resulting amount is entered in column (e) of

Form 8949.

If you received a supplemental Schedule A to Form

8971, use the most recently dated supplemental

Schedule A to determine your initial basis.

Penalties for inconsistent basis reporting. If you use an

initial basis that is more than the amount listed in Part 2, column

TIP

E, of the Schedule A to figure your basis in the property and Part

2, column C, of the Schedule A indicates that the property

increased the estate tax liability of the decedent, you may be

subject to a penalty equal to 20% of any resulting underpayment

of tax because the basis reported isn’t consistent with the final

estate tax value of the property.

For more details, see Pub. 551; Pub. 550; or the instructions

for Form 8971 and Schedule A, available at IRS.gov/Form8971.

Adjustments to basis. Before you can figure any gain (or loss)

on a sale, exchange, or other disposition of property, you must

usually make certain adjustments (increases and decreases) to

the basis of the property. Increase the basis of your property by

capital improvements. Decrease it by depreciation, amortization,

and depletion. Other adjustments may be necessary for your

property. See Pub. 551 for more information.

If you sold shares of stock, adjust your basis in each share,

but not below zero, by subtracting all the nondividend

distributions allocable to such shares that were received before

the sale and that reduced your cost (or other basis) in such

shares. Also, adjust your basis for any stock splits. See Pub. 550

for details. See

Form 1099-B and How To Complete Form 8949,

Columns (f) and (g), later, for the adjustment you must make if

you received a Form 1099-B (or substitute statement) and the

basis shown in box 1e is incorrect.

Increase the cost or other basis of a taxable OID debt

instrument by the amount of OID that you have included in gross

income for that instrument. See Pub. 550 for details.

Increase the cost or other basis of a tax-exempt OID debt

instrument by the amount of tax-exempt OID that accrued on the

debt instrument while held by you. See Pub. 550 for details.

If you elect to currently include in income the market discount

on a bond, increase the basis of the bond by the market discount

that has been included in income for that bond. See Pub. 550 for

details.

If you elect to amortize bond premium on a taxable bond,

reduce the basis of the bond by any bond premium amortization

allowed as either an offset to interest income or as a deduction

for that bond. Reduce the basis of a tax-exempt bond by any

bond premium amortization for that bond. See Pub. 550 for

details.

If a charitable contribution deduction is allowable because of

a bargain sale of property to a charitable organization, you must

allocate your basis in the property between the part sold and the

part contributed based on the fair market value of each. See

Pub. 544 for details.

For compensatory options granted after 2013, the basis

information reported to you on Form 1099-B (or substitute

statement) won’t reflect any amount you included in income

upon grant or exercise of the option. Increase your basis by any

amount you included in income upon grant or exercise of the

option. For compensatory options granted before 2014, any

basis information reported to you on Form 1099-B (or substitute

statement) may or may not reflect any amount you included in

income upon grant or exercise of the option; therefore, the basis

may need to be adjusted. If the basis information reported to you

on Form 1099-B (or substitute statement) doesn’t reflect an

amount you included in income upon grant or exercise of the

option, increase your basis by the amount you included in

income upon grant or exercise of the option. See Pub. 525 for

more information.

Solely for purposes of calculating a loss on the sale of the

stock of a specified 10%-owned foreign corporation, if a

corporate shareholder received an actual or constructive

dividend after December 31, 2017, and that dividend qualified

for the 100% dividends-received deduction, the shareholder

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must reduce its basis in the controlled foreign corporation stock

in the amount of the dividend received, but not below zero.

Average basis. You can use the average basis method to

determine the basis of shares of stock if the shares are identical

to each other, you acquired them at different prices and left them

in an account with a custodian or agent, and either:

•

They are shares in a mutual fund (or other regulated

investment company);

•

They are shares you hold in connection with a dividend

reinvestment plan (DRP), and all the shares you hold in

connection with the DRP are treated as covered securities

(defined below); or

•

You acquired them after 2011 in connection with a DRP.

Shares are identical if they have the same CUSIP number,

except that shares of stock in a DRP aren't identical to shares of

stock that aren't in a DRP, even if they have the same CUSIP

number. (CUSIP numbers are security identification numbers.)

If you are using the average basis method and received a

Form 1099-B (or substitute statement) that shows an incorrect

basis, enter “B” in column (f), enter the basis shown on Form

1099-B (or substitute statement) in column (e), and see

How To

Complete Form 8949, Columns (f) and (g), later. For details on

making the election and figuring average basis, see section

1012, Pub. 550, and Regulations section 1.1012-1(e).

Form 1099-B. If the property you sold was a covered security,

its basis should be shown in box 1e of the Form 1099-B (or

substitute statement) you received from your broker. Generally, a

covered security is any of the following.

•

Stock you acquired after 2010 (generally after 2011, if in a

mutual fund or other regulated investment company, or acquired

through a DRP).

•

Certain stock held in a mutual fund or in connection with a

DRP for which a single-account election is in effect.

•

Certain debt instruments you acquired after 2013.

•

Certain options, warrants, and stock rights you granted or

acquired after 2013.

•

A securities future contract you entered into after 2013.

•

Variable rate debt instruments acquired after 2015.

•

Inflation-indexed debt instruments acquired after 2015.

•

Contingent payment debt instruments acquired after 2015.

•

Convertible debt instruments acquired after 2015.

•

Options on debt instruments with payments denominated in

(or determined by reference to) a currency other than the U.S.

dollar and granted or acquired after 2015.

•

Options issued as part of investment units and granted or

acquired after 2015.

For more information on covered securities, see section

6045(g) and Regulations section 1.6045-1.

For covered securities, enter the basis shown on Form

1099-B (or substitute statement) in column (e). If the basis

shown on Form 1099-B (or substitute statement) isn’t correct,

see How To Complete Form 8949, Columns (f) and (g), later, for

the adjustment you must make.

If box 5 of Form 1099-B (or substitute statement) is checked,

the property sold wasn't a covered security.

For noncovered securities, enter the correct basis of the

property in column (e) if:

•

No basis is shown on Form 1099-B (or substitute statement),

•

The basis shown wasn't reported to the IRS.

If the basis shown wasn’t reported to the IRS, see How To

Complete Form 8949, Columns (f) and (g), later, for further

information about how to report the correct basis.

Column (f)—Code

In order to explain any adjustment to gain (or loss) in column (g),

enter the appropriate code(s) in column (f). See How To

Complete Form 8949, Columns (f) and (g), later. If more than

one code applies, enter all the codes that apply in alphabetical

order (for example, “BOQ”). Don't separate the codes by a space

or comma.

Column (g)—Amount of Adjustment

Enter in this column any necessary adjustments to gain (or loss).

Enter negative amounts in parentheses. Also, enter a code in

column (f) to explain the adjustment. See How To Complete

Form 8949, Columns (f) and (g), later.

More than one code. If you entered more than one code in

column (f) on the same row, enter the net adjustment in column

(g). For example, if one adjustment is $5,000 and another is

($1,000), enter $4,000 ($5,000 − $1,000).

Example. You sold your main home in 2023 for $320,000

and received a Form 1099-S showing the $320,000 gross

proceeds. The home's basis was $100,000. You had selling

expenses of $20,000 that weren’t included on your Form 1099-S.

Under the tests described in

Sale of Your Home in the

Instructions for Schedule D (Form 1040), you can exclude the

entire $200,000 gain from income. On Form 8949, Part II, check

box F at the top. Complete columns (a), (b), and (c). Enter

$320,000 in column (d) and $100,000 in column (e). Enter “EH”

in column (f). In column (g), enter $220,000 ($20,000 selling

expenses + $200,000 exclusion) as a negative number. Put it in

parentheses to show it is negative. In column (h), enter -0-

($320,000 − $100,000 − $220,000). If this is your only

transaction on this Part II, enter $320,000 in column (d) on

line 10 of Schedule D (Form 1040), $100,000 in column (e),

($220,000) in column (g), and -0- in column (h).

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How To Complete Form 8949, Columns (f) and (g)

For most transactions, you don't need to complete columns (f) and (g) and can leave them blank. You may need to complete columns

(f) and (g) if you got a Form 1099-B or 1099-S (or substitute statement) that is incorrect, if you are excluding or postponing a capital

gain, if you have a disallowed loss, or in certain other situations. Details are in the table below. If you enter more than one code in

column (f), see More than one code in the instructions for column (g) above.

IF . . .

THEN enter this code

in column (f) . . .

AND. . .

You received a Form 1099-B (or substitute

statement) and the basis shown in box 1e is

incorrect

•

If this transaction is reported on a Part I with box B

checked at the top or if this transaction is reported on a Part

II with box E checked at the top, enter the correct basis in

column (e), and enter -0- in column (g).

•

If this transaction is reported on a Part I with box A

checked at the top or if this transaction is reported on a Part

II with box D checked at the top, enter the basis shown on

Form 1099-B (or substitute statement) in column (e), even

though that basis is incorrect. Correct the error by entering

an adjustment in column (g). To figure the adjustment

needed, see the

Worksheet for Basis Adjustments in

Column (g), later. Also, see Example 4—Adjustment for

incorrect basis in the instructions for column (h), later.

You received a Form 1099-B (or substitute

statement) and the type of gain (or loss)

shown in box 2 is incorrect

Report the transaction on the correct part of Form 8949,

and enter -0- in column (g) on that part of the form if there

are no adjustments needed for the transaction.

TIP

If you received a Form 1099-B

(or substitute statement) with the Ordinary

box in box 2 checked and the security is a

taxable contingent payment debt instrument

subject to the noncontingent bond method,

enter code “O” for the transaction in column

(f) of the appropriate part of Form 8949 and

complete the

Worksheet for Contingent

Payment Debt Instrument Adjustment in

Column (g), later, to figure the amount to

enter in column (g).

You received a Form 1099-B or 1099-S (or

substitute statement) as a nominee for the

actual owner of the property

Report the transaction on Form 8949 as you would if you

were the actual owner, but also enter any resulting gain as

a negative adjustment (in parentheses) in column (g) or any

resulting loss as a positive adjustment in column (g). As a

result of this adjustment, the amount in column (h) should

be zero. However, if you received capital gain distributions

as a nominee, report them instead, as described under

Capital Gain Distributions in the Instructions for Schedule D

(Form 1040).

You sold or exchanged your main home at a

gain, must report the sale or exchange on

Part II of Form 8949 (as explained in Sale of

Your Home in the Instructions for

Schedule D (Form 1040)), and can exclude

some or all of the gain

Report the sale or exchange on Form 8949 as you would if

you weren't taking the exclusion. Then enter the amount of

excluded (nontaxable) gain as a negative number (in

parentheses) in column (g). See the example in the

instructions for column (g).

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IF . . .

THEN enter this code

in column (f) . . .

AND. . .

You received a Form 1099-B (or substitute

statement) showing accrued market

discount in box 1f

Use the Worksheet for Accrued Market Discount

Adjustment in Column (g), later, to figure the amount to

enter in column (g). However:

•

If you received a partial payment of principal on a bond,

don't use the worksheet. Instead, enter the smaller of the

accrued market discount or your proceeds in column (g).

Also, report it as interest on your tax return.

•

If you chose to include market discount in income

currently, enter -0- in column (g). Before figuring your gain

(or loss), increase your basis in the bond by the market

discount you have included in income for all years. See the

instructions for code B above.

If the disposition of a market discount bond results in a loss

subject to the wash sale rules, enter “W” in column (f) and

follow the instructions for code W below.

You sold or exchanged QSB stock and can

exclude part of the gain

Report the sale or exchange on Form 8949 as you would if

you weren't taking the exclusion and enter the amount of

the exclusion as a negative number (in parentheses) in

column (g). However, if the transaction is reported as an

installment sale, see Gain from an installment sale of QSB

stock in the Instructions for Schedule D (Form 1040).

You can exclude all or part of your gain

under the rules explained in the Schedule D

instructions for DC Zone assets or qualified

community assets

Report the sale or exchange on Form 8949 as you would if

you weren't taking the exclusion. Then enter the amount of

the exclusion as a negative number (in parentheses) in

column (g).

You are electing to postpone all or part of

your gain under the rules explained in the

Schedule D instructions for any rollover of

gain (for example, rollover of gain from QSB

stock)

Report the sale or exchange on Form 8949 as you would if

you weren't making the election. Then enter the amount of

postponed gain as a negative number (in parentheses) in

column (g).

You have a nondeductible loss from a wash

sale

Report the sale or exchange on Form 8949 and enter the

amount of the nondeductible loss as a positive number in

column (g). See the Schedule D instructions for more

information about wash sales generally and Pub. 550 for

more information on wash sales involving substantially

similar stock or securities. If you received a Form 1099-B

(or substitute statement) and the amount of nondeductible

wash sale loss shown in box 1g is incorrect, enter the

correct amount of the nondeductible loss as a positive

number in column (g). If the amount of the nondeductible

loss is less than the amount shown on Form 1099-B (or

substitute statement), attach a statement explaining the

difference. If no part of the loss is a nondeductible loss from

a wash sale transaction, enter -0- in column (g).

You have a nondeductible loss other than a

loss indicated by code W

Report the sale or exchange on Form 8949 and enter the

amount of the nondeductible loss as a positive number in

column (g). See Nondeductible Losses in the Instructions

for Schedule D (Form 1040).

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IF . . .

THEN enter this code

in column (f) . . .

AND. . .

You received a Form 1099-B or 1099-S (or

substitute statement) for a transaction and

there are selling expenses or option

premiums that aren't reflected on the form

or statement by an adjustment to either the

proceeds or basis shown E

Enter in column (d) the proceeds shown on the form or

statement you received. Enter in column (e) any cost or

other basis shown on Form 1099-B or 1099-S (or substitute

statement). In column (g), enter as a negative number (in

parentheses) any selling expenses and option premium

that you paid (and that aren't reflected on the form or

statement you received) and enter as a positive number

any option premium that you received (and that isn't

reflected on the form or statement you received). For more

information about option premiums, see

Gain or Loss From

Options in the Instructions for Schedule D (Form 1040).

You had a loss from the sale, exchange, or

worthlessness of small business (section

1244) stock and the total loss is more than

the maximum amount that can be treated as

an ordinary loss

See Small Business (Section 1244) Stock in the

Schedule D (Form 1040) instructions.

You disposed of collectibles (see the

Schedule D instructions)

Enter -0- in column (g). Report the disposition on Form

8949 as you would report any sale or exchange.

You report multiple transactions on a single

row, as described in Exception 2 or Special

provision for certain corporations,

partnerships, securities dealers, and other

qualified entities under Exceptions to

reporting each transaction on a separate

row, earlier

See Exception 2 and Special provision for certain

corporations, partnerships, securities dealers, and other

qualified entities under Exceptions to reporting each

transaction on a separate row, earlier. Enter -0- in column

(g) unless an adjustment is required because of another

code.

You are electing to postpone all or part of

your gain under the rules explained in the

Schedule D instructions for investments in

QOFs

See How To Report an Election To Defer Tax on Eligible

Gain Invested in a QOF, later.

You are reporting your gain from a QOF

investment that you deferred in a prior tax

year

See How To Report Gain Previously Deferred in a QOF

Investment, later.

You are a nonresident alien individual,

foreign trust, foreign estate, or foreign

corporation who sold or exchanged an

interest in a partnership engaged in a U.S.

trade or business P

Report on Form 8949 the gain or loss on the sale or

exchange by a nonresident alien individual, foreign trust,

foreign estate, or foreign corporation of an interest in a

partnership that is engaged in a U.S. trade or business.

Enter in column (g) any adjustment resulting from the

application of Regulations section 1.864(c)(8)-1(b) and (c).

If you are required to file Schedule P (Form 1040-NR), see

the instructions for lines 9 and 17. If you are required to file

Schedule P (Form 1120-F), see the instructions for line 9.

You have an adjustment not explained

earlier in this column

Enter the appropriate adjustment amount in column (g).

See the instructions for column (g).

None of the other statements in this column

apply because you have no adjustments

Leave columns (f) and (g) blank.

Column (h)—Gain (or Loss)

Figure gain (or loss) on each row. First, subtract the cost or other

basis in column (e) from the proceeds (sales price) in column

(d). Then take into account any adjustments in column (g). Enter

the gain (or loss) in column (h). Enter negative amounts in

parentheses.

Example 1—Gain. Column (d) is $6,000 and column (e) is

$2,000. Enter $4,000 in column (h).

Example 2—Loss. Column (d) is $6,000 and column (e) is

$8,000. Enter ($2,000) in column (h).

Example 3—Adjustment. Column (d) is $6,000, column (e)

is $2,000, and column (g) is ($1,000). Enter $3,000 in column

(h).

Example 4—Adjustment for incorrect basis. You sold

stock for $1,000. You had owned the stock for 3 months. Your

correct basis for the stock is $100, but you receive a Form

1099-B that shows your basis is $900 and shows your broker

reported that basis to the IRS. Enter $900 on line 1 of the

Worksheet for Basis Adjustments in Column (g), later. Enter

$100 on line 2 of the worksheet. Because line 1 is larger than

line 2, leave line 3 blank and enter $800 ($900 − $100) as a

positive number on line 4. Also, enter $800 in column (g) of Part I

Instructions for Form 8949 (2023)

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with box A checked at the top. Enter “B” in column (f). Enter

$1,000 in column (d) and $900 in column (e). To figure your gain

(or loss), subtract $900 from $1,000. Combine the result, $100,

with the $800 adjustment in column (g). Your gain is $900 ($100

+ $800). Enter $900 in column (h).

Example 5—Digital asset. You purchased one unit of digital

asset A on June 1, 2020, for $1,000. On June 1, 2023, you use a

platform for trading digital assets to exchange your unit of digital

asset A for one unit of digital asset B with a fair market value of

$3,000. You must report a long-term capital gain of $2,000.

Example 6—Digital asset. You are a self-employed

attorney who performs legal services for a client. The client gives

you one unit of digital asset A as payment for services. At the

time of the payment, the fair market value of one unit of digital

asset A is $10,000. You report $10,000 in self-employment

income (the fair market value of one unit of digital asset A). Two

months later, when the fair market value of one unit of digital

asset A is $12,000, you decide to sell it. You must report a

short-term capital gain of $2,000, which is the difference

between the sales price ($12,000) and your basis in one unit of

digital asset A ($10,000).

Worksheet for Basis Adjustments in Column (g)

Keep for Your Records

If the basis shown on Form 1099-B (or substitute statement) isn't correct, do the following.

•

If the basis wasn't reported to the IRS, enter the correct basis in column (e) and enter -0- in column (g) (unless you must make an adjustment for some other reason).

You don't need to complete this worksheet.

•

If the basis was reported to the IRS, enter the reported basis shown on Form 1099-B (or substitute statement) in column (e) and use this worksheet to figure the

adjustment to include in column (g).

1. Enter the cost or other basis shown on Form 1099-B (or substitute statement) ................................

2. Enter the correct cost or other basis ...........................................................

3. If line 1 is larger than line 2, leave this line blank and go to line 4. If line 2 is larger than line 1, subtract line 1 from line 2. Enter the

result here and in column (g) as a negative number (in parentheses) ...................................... 3.

4. If line 1 is larger than line 2, subtract line 2 from line 1. Enter the result here and in column (g) as a positive number ........

Worksheet for Accrued Market Discount Adjustment in Column (g)

Keep for Your Records

If you received a Form 1099-B (or substitute statement) reporting the sale or retirement of a market discount bond, enter code “D” for the transaction in column (f) of the

appropriate part of Form 8949 and complete this worksheet to figure the amount to enter in column (g). If, in addition, any of the amounts shown on Form 1099-B (or

substitute statement) are incorrect, see How To Complete Form 8949, Columns (f) and (g), earlier, for information on how to correct those amounts. Use the corrected

amounts when completing this worksheet.

1. Enter the proceeds from box 1d of Form 1099-B (or substitute statement) ...................................

2. Enter the basis from box 1e of Form 1099-B (or substitute statement) ......................................

3. Subtract line 2 from line 1. If zero or less, enter -0- ..................................................

4. Enter the accrued market discount from box 1f of Form 1099-B (or substitute statement) ..........................

5. Enter the smaller of line 3 or line 4, or, if lines 3 and 4 are the same, enter the amount from line 3. This is the amount of your gain

that is ordinary income. Enter it as a negative amount (in parentheses) in Form 8949, column (g). Also, report it as interest income

on your tax return. If zero or less, enter -0- ....................................................... 5.

Worksheet for Contingent Payment Debt Instrument

Adjustment in Column (g)

Keep for Your Records

If you received a Form 1099-B (or substitute statement) reporting the sale of a taxable contingent payment debt instrument subject to the noncontingent bond method,

enter code “O” for the transaction in column (f) of the appropriate part of Form 8949 and complete this worksheet to figure the amount to enter in column (g). If, in addition,

any of the amounts shown on Form 1099-B (or substitute statement) are incorrect, see How To Complete Form 8949, Columns (f) and (g), earlier, for information on how

to correct those amounts. Use the corrected amounts when completing this worksheet. Don’t use this worksheet if there are no remaining contingent payments on the

debt instrument as of the sale, exchange, or retirement of the instrument. See Regulations section 1.1275-4(b)(8)(iii).

1. Enter the proceeds from box 1d of Form 1099-B (or substitute statement) ...................................

2. Enter the basis from box 1e of Form 1099-B (or substitute statement) ......................................

3. Subtract line 2 from line 1 ..................................................................

4. If line 3 is more than zero, enter the number from line 3. This is the amount of your gain that is ordinary income. Enter this amount

as a negative amount (in parentheses) in Form 8949, column (g), and enter “O” in column (f). Also, report it as interest income on

your tax return ......................................................................... 4.

5. If line 3 is less than zero, enter the total amount of OID on this debt instrument that you included in income for the entire period

that you held the debt instrument ............................................................. 5.

6. Enter the total amount of net negative adjustments on the debt instrument that you took into account as ordinary losses over the

entire period that you held the debt instrument. Enter this amount as a negative amount (in parentheses) ............... 6.

7. Add lines 5 and 6 .......................................................................

8. Enter the amount from line 3 as a positive amount ..................................................

9. Enter the smaller of line 7 or line 8. This is the amount of your loss that is an ordinary loss. Enter it as a positive amount in Form

8949, column (g), and enter “O” in column (f). Also, report it as an ordinary loss on your tax return .................... 9.

Instructions for Form 8949 (2023)

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How To Report an Election To Defer Tax on

Eligible Gain Invested in a Qualified Opportunity

Fund (QOF)

For more information on QOFs, see Pub. 544.

If you elect to defer tax on an eligible gain by investing in a

QOF, report the eligible gain on the form and in the manner

otherwise instructed. For example, individual taxpayers would

report gain from the sale of stock on Form 8949 and Schedule D

(Form 1040). If the gain is reported on Form 8949, do not make

any adjustments for the deferral in column (g).

Report the deferral of the eligible gain on its own row of Form

8949 in Part I with box C checked or Part II with box F checked

(depending on whether the gain being deferred is short term or

long term). If you made multiple investments in different QOFs or

in the same QOF on different dates, use a separate row for each

investment. If you invested eligible gains of the same character

(but from different transactions) on the same date into the same

QOF, you can group those investments on the same row. In

column (a), enter only the employer identification number (EIN)

of the QOF into which you invested. In column (b), enter the date

you invested in the QOF. Leave columns (c), (d), and (e) blank.

Enter code “Z” in column (f) and the amount of the deferred gain

as a negative number (in parentheses) in column (g).

Your investment in a QOF can be used to defer only long-term

gain, only short-term gain, or a combination of both short-term

and long-term gain. You do not need to trace or allocate the

funds invested in a QOF to the specific gain being deferred, but

the investment in the QOF must have occurred within the

180-day period beginning on the date the deferred gain was

realized. If you realized both short-term and long-term gains

during the 180-day period, you can choose how much of each

gain to defer by reporting the deferral in Part I or Part II, as

applicable. The character of the eligible gain will survive the

investment in the QOF. When you recognize the eligible gain

(either when you sell or exchange or otherwise dispose of your

investment in the QOF or December 31, 2026, whichever is

earlier), the gain you recognize will be the same character as the

gain you deferred.

If you are attaching multiple Forms 8949 to your return,

attach the Form(s) 8949 that lists code "Z" in column (f)

first.

If you elect to defer tax on an eligible gain by investing in

a QOF, you will need to complete a Form 8997 for each

year you hold the investment and for the year you

dispose of the investment. If you have held that investment for

more than 5 years, see the instructions for Form 8997 for

additional information regarding the basis of that investment.

How To Report Eligible Gains From Section 1231

Property

Taxpayers deferring eligible gains from section 1231 property,

including gains from installment sales and like-kind exchanges,

by investing in a QOF must report the deferral election on Form

8949 in the tax year of the deferral. Likewise, taxpayers selling or

exchanging a QOF investment must report the inclusion of the

eligible gain on Form 8949.

TIP

Reporting the deferral election.

Each QOF investment of

section 1231 gains will use two separate rows in Part II

(long-term transactions) of Form 8949.

•

For the first row, in column (a), write “QOF INVESTMENT

FROM FORM 4797.” Leave columns (b) through (e) blank. Enter

code “O” in column (f), and in column (g) report the amount of

the QOF investment from Form 4797 as a positive number. For

example, if ($75,000) was reported in column (g) of Form 4797,

report $75,000 in column (g) of Form 8949.

•

For the second row, in column (a), enter only the EIN of the

QOF investment. In column (b), enter the date of the QOF

investment. Leave columns (c), (d), and (e) blank. Enter code “Z”

in column (f) and the amount of the deferred gain as a negative

number (in parentheses) in column (g).

Reporting the inclusion. Each inclusion will use two separate

rows in Part II.

•

For the first row, in column (a), write “QOF INCLUSION

EVENT FROM SECTION 1231 GAINS.” Leave columns (b)

through (e) blank. Enter code “O” in column (f), and in column (g)

report the amount of the included section 1231 gains to Form

4797 as a negative number (in parentheses). For example,

$75,000 inclusion of section 1231 gains was reported in column

(g) of Form 4797, report ($75,000) in column (g) of Form 8949.

•

For the second row, enter the EIN of the QOF investment in

column (a). Complete columns (b) and (c). Leave (d) and (e)

blank. Enter code "Y" in column (f), and in column (g) enter the

amount of previously deferred gain as a positive number.

How To Report Gain Previously Deferred in a

QOF Investment

If you sold or exchanged your investment in a QOF during the tax

year, you must report the amount of eligible gain that you

previously deferred and that you are now recognizing. Report the

gain from each investment on its own row. Check box C in Part I

or check box F in Part II depending on whether the gain is short

term or long term. The gain you recognize will be the same

character as the gain you deferred. Put the EIN of the QOF

investment you are selling in column (a). Complete columns (b),

(c), (d), and (e). Enter code "Y" in column (f), and enter the

amount of previously deferred gain as a positive number in

column (g).

If you disposed of your investment in a QOF, you will also

need to complete Form 8997. See the instructions for

Form 8997 for more information.

Line 2

The total of the amounts in column (h) of line 2 of all your Forms

8949 should equal the amount you get by combining columns

(d), (e), and (g) on the corresponding line of Schedule D (Form

1040). For example, the total of the amounts in column (h) of

line 2 of all your Forms 8949 with box A checked should equal

the amount you get by combining columns (d), (e), and (g) on

line 1b of Schedule D. The total of the amounts in column (h) of

line 2 of all your Forms 8949 with box E checked should equal

the amount you get by combining columns (d), (e), and (g) on

line 9 of Schedule D.

TIP

Instructions for Form 8949 (2023)