People with capital gains transactions to report will need to use Form 8949 along with Schedule D. Form 8949 is a brand new tax form, and debuts for the 2011 tax year. Individuals will detail the sale of capital assets, such as stocks, mutual funds and bonds, on Form 8949 before summarizing those details on the Schedule D.
Schedule D has likewise undergone a major redesign. The newly revised Schedule D functions as a summary of the total amounts reported on Form 8949.
The first thing I noticed about the new Form 8949 is it has more columns and a different structure than the old Schedule D. The Form 8949 has extra columns to indicate whether a transaction has any special characteristics, such as the sale of a home or a wash sale, which necessitate making adjustments to the amount of gain or loss being reported.
The second thing I noticed, capital gains transactions must be grouped into three categories, depending on whether the broker supplied cost basis information on the Form 1099-B (which reports the sale of a capital asset), whether the broker did not supply any cost basis information on the 1099-B, or whether no 1099-B was received for that transaction. These three categories are found along the top of the Form 8949. Taxpayers will need to fill out one Form 8949 for each category of capital gains transaction they have.
The newly revised Schedule D mirrors the structure of the Form 8949, with totals from each category found on Form 8949 showing up on the Schedule D.
The instructions have been revised too, and contain extensive discussion of the various codes and adjustments that may need to be indicated.
Resources from the IRS Web site: