IRS Publication 544 — Sales and Other Dispositions of Assets

Schedule D. Use Schedule Dto figure the overall gain or loss from transactions reported on Form 8949 and to report certain transactions you do not have to report on Form 8949. Before completing Schedule D, you may have to complete other forms as shown below.

• Complete all applicable lines of Form 8949 before completing lines 1b, 2, 3, 8b, 9, and 10 of your applicable Schedule D. See the Instructions for Form 8949 and the Instructions for Schedule Dfor special provisions and exceptions to completing Form 8949. Enter on Schedule Dthe combined totals from all your Forms 8949.

• For a sale, exchange, or involuntary conversion of business property, complete Form 4797 (discussed later).

• For a like-kind exchange, complete Form 8824. See Reporting the exchange under Like-Kind Exchanges in chapter 1.

• For an installment sale, complete Form 6252. See Pub. 537.

• For an involuntary conversion due to casualty or theft, complete Form 4684. See Pub. 547.

• For a disposition of an interest in or property used in an activity to which the at-risk rules apply, complete Form 6198. See Pub. 925.

• For a disposition of an interest in or property used in a passive activity, complete Form 8582. See Pub. 925.

• For gains and losses from section 1256 contracts and straddles, complete Form 6781. See Pub. 550.

• Digital asset transaction.

See the instructions for the Schedule Dyou are filing for additional reporting requirements.

Personal-use property. Report gain on the sale or exchange of property held for personal use (such as your home) on Form 8949 and Schedule D (Form 1040), as applicable. Loss from the sale or exchange of property held for personal use is not deductible. But if you had a loss from the sale or exchange of real estate held for personal use for which you received a Form 1099 -S, report the transaction on Form 8949 and Schedule D, as applicable, even though the loss is not deductible. See the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949 for information on how to report the transaction. Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. The time you own an asset before disposing of it is the holding period.

If you received a Form 1099 -B (or substitute statement), box 2 may help you determine whether the gain or loss is short term or long term.

Generally, if you hold a capital asset 1 year or less, the gain or loss from its disposition is short term. Report it in Part I of Form 8949 and/or Schedule D, as applicable. If you hold a capital asset longer than 1 year, the gain or loss from its disposition is generally long term. Report it in Part II of Form 8949 and/or Schedule D, as applicable. However, certain partnership interests held in connection with the performance of services may be subject to different holding period rules. See the Instructions for Form 8949 for more information.

Table 4-1. Do I Have a Short-Term or Long-Term Gain or Loss?

IF you hold the property... THEN you have a... 1 year or less short-term capital gain or loss. more than 1 year long-term capital gain or loss. These distinctions are essential to correctly arrive at your net capital gain or loss. Capital losses are allowed in full against capital gains plus up to $3,000 of ordinary income. See Capital Gains Tax Rates, later. Holding period. T o figure if you held property longer than 1 year, start counting on the day following the day you acquired the property. The day you disposed of the property is part of your holding period.

Example. If you bought an asset on June 17, 2024, you should start counting on June 18, 2024. If you sold the asset on June 17, 2025, your holding period is not longer than 1 year, but if you sold it on June 19, 2025, your holding period is longer than 1 year. Patent property. If you dispose of patent property, you are considered to have held the property longer than 1 year, no matter how long you actually held it. For more information, see Patents in chapter 2. Inherited property. If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. Installment sale. The gain from an installment sale of an asset qualifying for long -term capital gain treatment in the year of sale continues to be long term in later tax years. If it is short term in the year of sale, it continues to be short term when payments are received in later tax years.

Tip: The date the installment payment is received determines the capital gains rate that should be applied, not the date the asset was sold under an installment contract. Nontaxable exchange. If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. That is, it begins on the same day as your holding period for the old property. Corporate liquidation. The holding period for property you receive in a liquidation generally starts on the day after you receive it if gain or loss is recognized. 54 Chapter 4 Reporting Gains and Losses Publication 544 (2025)