Individual Income Tax Return Project: Analyzing Schedule D (Form 1040)

This assignment solution provides a detailed walkthrough of Schedule D (Form 1040), focusing on the calculation and reporting of capital gains and losses for individual income tax purposes. It includes the proper handling of short-term and long-term capital gains, as well as capital loss carryovers. The solution references relevant forms and worksheets, such as Form 8949 and the Capital Loss Carryover Worksheet, ensuring accurate completion of the schedule. The project adheres to the 2018 tax guidelines, offering a comprehensive understanding of how to report capital gains and losses on an individual income tax return. Desklib provides this document as part of its collection of solved assignments.

SCHEDULE D
(Form 1040)
Department of the Treasury
Internal Revenue Service (99)
Capital Gains and Losses
▶ Attach to Form 1040 or Form 1040NR.
▶ Go to www.irs.gov/ScheduleD for instructions and the latest information.
▶ Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10.
OMB No. 1545-0074
2018
Attachment
Sequence No.12
Name(s) shown on return Your social security number
Part I Short-Term Capital Gains and Losses—Generally Assets Held One Year or Less (see instructions
See instructions for how to figure the amounts to enter on the
lines below.
This form may be easier to complete if you round off cents to
whole dollars.
(d)
Proceeds
(sales price)
(e)
Cost
(or other basis)
(g)
Adjustments
to gain or loss from
Form(s) 8949, Part I,
line 2, column (g)
(h) Gain or (loss)
Subtract column (e)
from column (d) and
combine the result
with column (g)
1a Totals for all short-term transactions reported on Form
1099-B for which basis was reported to the IRS and for
which you have no adjustments(see instructions).
However, if you choose to report all these transactions
on Form 8949, leave this line blank and go to line 1b.
1b Totals for all transactions reported on Form(s) 8949 with
Box A checked . . . . . . . . . . . . .
2 Totals for all transactions reported on Form(s) 8949 with
Box B checked . . . . . . . . . . . . .
3 Totals for all transactions reported on Form(s) 8949 with
Box C checked . . . . . . . . . . . . .
4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824. . 4
5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from
Schedule(s) K-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover
Worksheet in the instructions. . . . . . . . . . . . . . . . . . . . . . . . 6 ( )
7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any long-
term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back. . . . . . 7
Part II Long-Term Capital Gains and Losses—Generally Assets Held More Than One Year (see instructi
See instructions for how to figure the amounts to enter on the
lines below.
This form may be easier to complete if you round off cents to
whole dollars.
(d)
Proceeds
(sales price)
(e)
Cost
(or other basis)
(g)
Adjustments
to gain or loss from
Form(s) 8949, Part II,
line 2, column (g)
(h) Gain or (loss)
Subtract column (e)
from column (d) and
combine the result
with column (g)
8a Totals for all long-term transactions reported on Form
1099-B for which basis was reported to the IRS and for
which you have no adjustments(see instructions).
However, if you choose to report all these transactions
on Form 8949, leave this line blank and go to line 8b.
8b Totals for all transactions reported on Form(s) 8949 with
Box D checked . . . . . . . . . . . . .
9 Totals for all transactions reported on Form(s) 8949 with
Box E checked . . . . . . . . . . . . .
10 Totals for all transactions reported on Form(s) 8949 with
Box F checked. . . . . . . . . . . . . .
11 Gain from Form 4797, Part I; long-term gain from Forms 2439 and 6252; and long-term gain or (loss)
from Forms 4684, 6781, and 8824. . . . . . . . . . . . . . . . . . . . . . . 11
12 Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-112
13 Capital gain distributions. See the instructions. . . . . . . . . . . . . . . . . . . 13
14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover
Worksheet in the instructions. . . . . . . . . . . . . . . . . . . . . . . . 14 ( )
15 Net long-term capital gain or (loss). Combine lines 8a through 14 in column (h). Then go to Part III on
the back . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11338H Schedule D (Form 1040) 2018

Schedule D (Form 1040) 2018 Page 2
Part III Summary
16 Combine lines 7 and 15 and enter the result. . . . . . . . . . . . . . . . . . 16
• If line 16 is a gain, enter the amount from line 16 on Schedule 1 (Form 1040), line 13, or Form
1040NR, line 14. Then go to line 17 below.
• If line 16 is a loss, skip lines 17 through 20 below. Then go to line 21. Also be sure to complete
line 22.
• If line 16 is zero, skip lines 17 through 21 below and enter -0- on Schedule 1 (Form 1040), line
13, or Form 1040NR, line 14. Then go to line 22.
17 Are lines 15 and 16 both gains?
Yes. Go to line 18.
No. Skip lines 18 through 21, and go to line 22.
18 If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the
amount, if any, from line 7 of that worksheet. . . . . . . . . . . . . . . . . ▶ 18
19 If you are required to complete the UnrecapturedSection 1250 Gain Worksheet(see
instructions), enter the amount, if any, from line 18 of that worksheet. . . . . . . . . ▶ 19
20 Are lines 18 and 19 both zero or blank?
Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions
for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42). Don't complete lines
21 and 22 below.
No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21
and 22 below.
21 If line 16 is a loss, enter here and on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14,
the smaller of:
• The loss on line 16; or
• ($3,000), or if married filing separately, ($1,500)} . . . . . . . . . . . . . . . 21 ( )
Note: When figuring which amount is smaller, treat both amounts as positive numbers.
22 Do you have qualified dividends on Form 1040, line 3a, or Form 1040NR, line 10b?
Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions
for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42).
No. Complete the rest of Form 1040 or Form 1040NR.
Schedule D (Form 1040) 2018