Taxation

Here’s a more detailed look at the process for reporting your gain on a stock sale, as well as a visual representation of what Forms 1099-B, 8949, and Schedule D look like.

Reporting: Step-by-Step
1. Receive Form 1099-B:
• After the end of the tax year in which you sold the stock, your broker or financial institution will send you Form 1099-B. This form typically arrives in January or February of the following year.
• Form 1099-B includes the following key information:
• Description of Property: The name of the stock you sold.
• Date Acquired: The date you purchased the stock.
• Date Sold or Disposed: The date you sold the stock.
• Sales Price: The amount received from the sale of the stock.
• Cost or Other Basis: The amount you paid for the stock when you purchased it.
• Gain or Loss: The difference between the sale price and the purchase price.

2. Completing Form 8949:
• Form 8949 is used to itemize all of your stock sales. On it, you
list each sale listed on Form 1099-B and calculate the gain or loss on each transaction.
• Form 8949 is divided into two parts:
• Part I: For short-term sales (stocks sold less than one year after purchase).
• Part II: For long-term sales (stocks sold more than one year after purchase).
• On Form 8949, you will need to include:
• A description of the asset.
• The dates of purchase and sale.
• The proceeds from the sale.
• The purchase price.
• The calculated gain or loss.

3. Completing Schedule D:
• Schedule D is used to total all gains and losses reported on Form
8949. On this form, you calculate your total short-term and long-term capital gains.
• Schedule D also accounts for any losses that can be used to reduce taxable income.