If you sold property, investments, or other assets during the year, you may need to report the transaction on Schedule D, Capital Gains and Losses.
Most property you own is considered a capital asset. Common examples include:
- Stocks and bonds
- Mutual funds and ETFs
- Cryptocurrency
- Collectibles
- Your primary residence
- Other personal-use or investment property
When you sell a capital asset, you generally must report the sale and calculate any gain or loss based on the difference between the selling price and your adjusted basis in the property.
What Types of Sales Are Reported on Schedule D?
Schedule D is commonly used to report:
- Sales of stocks and securities
- Capital gain distributions
- Sales of investment property
- Sales of personal-use property that result in a taxable gain
- Sales of a main home when reporting is required
Not every property sale belongs on Schedule D. Property used in a trade or business is often reported on Form 4797, Sales of Business Property, instead.
Business Property Exception
If property was used primarily for business or investment purposes, it may need to be reported on Form 4797 rather than Schedule D.
However, special rules may apply to property that was used for both personal and business purposes.
Do I Need to Report the Sale of My Main Home?
In many cases, yes.
Although most homeowners can exclude some or all of the gain from the sale of their primary residence, it's still often a good idea to report the transaction.
Reporting the sale may help reduce the likelihood of:
- IRS notices requesting additional information
- Return adjustments due to missing transaction details
- Questions related to reported proceeds on Form 1099-S
If you're eligible for the Home Sale Exclusion, you may be able to exclude up to:
- $250,000 of gain if filing Single
- $500,000 of gain if Married Filing Jointly
provided you meet the ownership and use requirements.
Where Do I Enter Capital Gains and Losses?
To enter the sale of a capital asset in the program:
- Go to Federal.
- Select Income.
- Choose Investments.
- Select Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.
- Choose the method you'd like to use to enter your transactions.
The program will use the information you provide to calculate any gain or loss and transfer the results to the appropriate tax forms.
What Information Do I Need to Enter?
Before you begin, gather documents related to the sale.
You'll generally need:
- Date acquired (purchase date)
- Purchase price or cost basis
- Date sold
- Sales proceeds
- Any applicable adjustments or selling expenses
This information is often found on:
- Form 1099-B for investment sales
- Form 1099-S for certain real estate transactions
- Brokerage statements
- Closing documents from a property sale
Accurate dates and amounts are important because they determine whether the transaction is treated as a short-term or long-term gain or loss.
What If I Sold Property at a Loss?
The tax treatment depends on the type of property sold.
Investment Property
Losses from investment assets, such as stocks and mutual funds, are generally deductible and may be used to offset capital gains.
Personal-Use Property
Losses from personal-use property, including your main home, personal vehicles, or household items, are generally not deductible.
However, any taxable gain from the sale of personal-use property must still be reported.
Keep Good Records
To accurately report capital gains and losses, keep copies of:
- Purchase records
- Brokerage statements
- Form 1099-B
- Form 1099-S
- Closing disclosures
- Receipts for improvements and selling expenses
Maintaining complete records helps ensure your gain or loss is calculated correctly and provides support if the IRS requests additional documentation.