14 Facts About Form 1040 Schedule D for Investors

by Investing School on January 21, 2009

It’s tax time which means we need to deal with the Schedule D again this year.  In case you are new to all this (or want a refresher), here are 14 facts you need to know about the schedule D.

  1. The 1040 Form Schedule D for the 2008 tax year can be found here (instructions here).
  2. If you sold a property or stock, you must file a Schedule D
  3. If you lost money, you can use this form to offset your gains
  4. On the form, you need to know when you bought and sold the asset, what it is and the cost of buying and the price you sold it at.
  5. Long term gains (assets held one year or more) are taxed at 15%
  6. If your federal tax bracket is 10 or 15%, long term gain tax rate is 5%
  7. Short term gains (assets held less than one year) are taxed at your regular income tax rate, which could be as high as 35%!
  8. If you have short term losses, you can start deducting all the short term gains.  Once those cancel out, you can start deducting the long term gains if you have any.
  9. Once all the gains are canceled out, a total of $3,000 per year can be used to deduct other forms of income
  10. Losses over $3,000 can be carried over to later years until death
  11. If your only investment sell is a house and the capital gain is less than $250,000 (less than $500,000 for a married couple filing taxes jointly), you don’t need to file a Schedule D
  12. Note the wash rule (buying a similar asset within 30 days of selling it) as it keep you from taking that lost this year.
  13. Companies like Gainskeeper can help you automatically create a Schedule D from your brokerage account.
  14. Then it can even be imported into tax software like TaxAct for full automation.

What else can you think of and have you started yet?  Let us know!

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{ 1 comment… read it below or add one }

david November 21, 2009 at 5:53 pm

Fact 1 claims to link to the 2008 Schedule D. It actually links to the 2009 Schedule D. I used the wrong-year form once before and it cost me months of time with the IRS. I had even crossed out the year and written in the correct one, per their instructions.


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