A capital asset is generally any property you own, whether it's used for personal purposes or as an investment. Common examples include stocks, bonds, cryptocurrency, mutual funds, investment property, and your home.
When you sell a capital asset, the difference between what you paid for it (your basis) and what you sold it for determines whether you have a capital gain or a capital loss.
- A capital gain occurs when you sell an asset for more than your basis.
- A capital loss occurs when you sell an asset for less than your basis.
Keep in mind that losses on the sale of personal-use property, such as a personal vehicle or your primary residence, are generally not deductible.
Where Can I Find Schedule D?
Capital gains and deductible capital losses are generally reported on Form 1040, Schedule D (Capital Gains and Losses).
You can view Schedule D and its instructions on the IRS website:
Schedule D is used to calculate your net capital gain or loss for the tax year. If you have a net capital gain, it may qualify for tax rates that differ from ordinary income tax rates.
Is My Capital Asset Long-Term or Short-Term?
The tax treatment of a gain or loss depends on how long you owned the asset before selling it.
Short-Term Capital Assets
An asset is considered short-term if you held it for one year or less before selling it.
Short-term capital gains are generally taxed at ordinary income tax rates.
Long-Term Capital Assets
An asset is considered long-term if you held it for more than one year before selling it.
Long-term capital gains may qualify for preferential tax rates that are often lower than ordinary income tax rates.
For holding period purposes, the day after you acquire the asset is considered the first day of ownership.
How Do I Report Capital Gains and Losses in TaxSlayer?
To enter the sale of stocks, mutual funds, cryptocurrency, collectibles, and similar investments in TaxSlayer:
- Select Federal.
- Select Income and choose My Forms.
- Select Investments.
- Choose Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.
Follow the prompts to enter the information from your tax documents.
Where Can I Learn More About Cost Basis for Gifts and Inherited Property?
If you received an asset as a gift or inheritance, special basis rules may apply.
For additional guidance, see:
This publication explains how to determine your basis in property acquired by gift, inheritance, or other non-purchase methods.
What Happens If My Capital Losses Exceed My Capital Gains?
If your total capital losses are greater than your total capital gains, you may be able to deduct part of the excess loss against other income.
For 2026 tax returns filed in 2027:
- Up to $3,000 of net capital losses may generally be deducted each year.
- If you're Married Filing Separately, the annual limit is generally $1,500.
Any remaining unused loss can usually be carried forward to future tax years until it is fully used.
How Do I Enter a Capital Loss Carryover in TaxSlayer?
If you're carrying forward losses from a prior year:
- Select Federal.
- Select Income and choose My Forms.
- Select Investments.
- Choose Capital Loss Carryover.
The Capital Loss Carryover Worksheet can help determine the amount available to carry forward.
Where Can I Learn More About Estimated Taxes?
If you have a taxable capital gain, you may need to make estimated tax payments to avoid underpayment penalties.
For additional information, see:
This publication explains withholding requirements, estimated tax payments, and strategies for avoiding tax surprises.
Additional IRS Resources
The following IRS publications provide more information about capital assets, gains, losses, and related tax topics:
- Publication 550, Investment Income and Expenses
- Publication 544, Sales and Other Dispositions of Assets
- Publication 523, Selling Your Home
These resources can help you understand the tax rules that apply to investment sales, asset dispositions, and home sales.
Before You File
Review all capital asset sales carefully to ensure:
- Purchase and sale dates are accurate.
- Cost basis information is correct.
- Gains and losses are classified properly.
- Capital loss carryovers are entered when applicable.
- Your entries match Forms 1099-B, 1099-S, and other supporting documents.
Accurate reporting can help you avoid IRS notices and ensure you're receiving any tax benefits available from deductible capital losses.