Basis and Recordkeeping

Basis is the amount of your investment in property for tax purposes. The basis of property you buy is usually its cost. You need to know your basis to figure any gain (or loss) on the sale or other disposition of the property. You must keep accurate records that show the basis and, if applicable, adjusted basis of your property. Your records should show the purchase price, including commissions; increases to basis, such as the cost of improvements; and decreases to basis, such as depreciation, nondividend distributions on stock, and stock splits.

For more information on basis, see Column (e)—Cost or Other Basis, later, and the following publications.

If you lost or didn't keep records to determine your basis in securities, contact your broker for help. If you receive a Form 1099-B (or substitute statement), your broker may have reported your basis for these securities in box 1e.

The IRS partners with companies that offer Form 8949 software that can import trades from many brokerage firms and accounting software that can help you keep track of your adjusted basis in securities. To find out more, go to IRS.gov/Efile.

Short-Term or Long-Term

Separate your capital gains and losses according to how long you held or owned the property.

The holding period for short-term capital gains and losses is generally 1 year or less. Taxpayers that hold certain partnership interests in connection with the performance of services may be subject to different holding period rules. See the Schedule D instructions for more information. Report these transactions on Part I of Form 8949 (or line 1a of Schedule D if you can use Exception 1 under the instructions for line 1, later).

The holding period for long-term captal gains and losses is generally more than 1 year. Taxpayers that hold certain partnership interests in connection with the performance of services may be subject to different holding period rules. See the Schedule D instructions for more information. Report these transactions on Part II of Form 8949 (or line 8a of Schedule D if you can use Exception 1 under the instructions for line 1, later).

To figure the holding period, begin counting on the day after you received the property and include the day you disposed of it.

Generally, if you disposed of property that you acquired by inheritance, report the disposition as a long-term gain (or loss) regardless of how long you held the property.

A nonbusiness bad debt must be treated as a short-term capital loss. See Pub. 550 for what qualifies as a nonbusiness bad debt and how to enter it on Part I of Form 8949.

Corporation's Gains and Losses From Partnerships, Estates, or Trusts

Report a corporation's share of capital gains and losses from investments in partnerships, estates, or trusts on the appropriate part of Form 8949. Report a net short-term capital gain (or loss) on Part I (with box C checked) and a net long-term capital gain (or loss) on Part II (with box F checked). In column (a), enter “From Schedule K-1 (Form 1065)” or “From Schedule K-1 (Form 1041),” whichever applies; enter the gain (or loss) in column (h); and leave all other columns blank.

If more than one Schedule K-1 is received, report each on a separate row. Include additional identifying information, such as “Partnership X.”

Section 1061 Reporting

Section 1061 recharacterizes certain long-term capital gains of a partner that holds one or more applicable partnership interests as short-term capital gains. An applicable partnership interest is an interest in a partnership that is transferred to or held by a taxpayer, directly or indirectly, in connection with the performance of substantial services by the taxpayer or any other related person, in an applicable trade or business. See Section 1061 Reporting Guidance FAQs for reporting of section 1061 recharacterization amounts on the Form 8949.

Digital Assets

A digital asset is a digital representation of value that is recorded on a cryptographically secured distributed ledger or any similar technology. A digital asset is treated as property, and general tax principles that apply to property transactions apply to transactions using digital assets, including how to figure your holding period for short-term and long-term capital gains and losses explained earlier under Short-Term or Long-Term. Digital assets include property that has been referred to as “convertible virtual currency,”“cryptocurrency,” and “non-fungible tokens.” If a particular asset has the characteristics of a digital asset, it will be treated as a digital asset for federal income tax purposes. For more information on the tax treatment of digital assets, see Notice 2014-21 (as modified by Notice 2023-34), Rev. Rul. 2019-24, Rev. Rul. 2023-14, and IRS.gov/VirtualCurrencyFAQs. For more information on the tax treatment of property transactions and on short-term and long-term capital gains and losses, see Pub. 544.

Rounding Off to Whole Dollars

You can round off cents to whole dollars on Form 8949. If you do round to whole dollars, round all amounts. To round, drop cent amounts under 50 cents and increase cent amounts over 49 cents to the next dollar. For example, $1.49 becomes $1 and $1.50 becomes $2.

Column (a)—Description of Property

For stock, include the number of shares. You can use stock ticker symbols or abbreviations to describe the property as long as they are based on the descriptions of the property as shown on Form 1099-B or 1099-S (or substitute statement).

For a digital asset, include the full name or an abbreviated symbol of the digital asset and the exact units sold or disposed of in the transaction, and include the sale transaction ID number, if available.

Column (b)—Date Acquired

Enter in this column the date you acquired the property. Enter the trade date for stocks and bonds you purchased on an exchange or over-the-counter market. For a short sale, enter the date you acquired the property delivered to the broker or lender to close the short sale. For property you previously elected to treat as having been sold and reacquired on January 1, 2001 (or January 2, 2001, for readily tradable stock), enter the date of the deemed sale and reacquisition.

If you received a Form 1099-B (or substitute statement), box 1b may help you determine when you acquired the property.

Column (c)—Date Sold or Disposed Of

Enter in this column the date you sold or disposed of the property. Use the trade date for stocks and bonds traded on an exchange or over-the-counter market. For a short sale, enter the date you delivered the property to the broker or lender to close the short sale.

If you received a Form 1099-B (or substitute statement), box 1c may help you determine when you sold or disposed of the property.

Column (d)—Proceeds (Sales Price)

Follow the instructions below that apply to your transaction(s).

Column (e)—Cost or Other Basis

The basis of property you buy is usually its cost, including the purchase price and any costs of purchase, such as commissions. You may not be able to use the actual cost as the basis if you inherited the property, got it as a gift, or received it in a tax-free exchange or involuntary conversion or in connection with a “wash sale.” If you don't use the actual cost, attach an explanation of your basis.

The basis of property acquired by gift is generally the basis of the property in the hands of the donor. The basis of inherited property is generally the fair market value at the date of death. See Pub. 551 for details.

If you elected to recognize gain on property held on January 1, 2001, your basis in the property is its closing market price or fair market value, whichever applies, on the date of the deemed sale and reacquisition, whether the deemed sale resulted in a gain or an unallowed loss.

For more details, see Pub. 551; Pub. 550; or the instructions for Form 8971 and Schedule A, available at IRS.gov/Form8971.

Increase the cost or other basis of a taxable OID debt instrument by the amount of OID that you have included in gross income for that instrument. See Pub. 550 for details.

Increase the cost or other basis of a tax-exempt OID debt instrument by the amount of tax-exempt OID that accrued on the debt instrument while held by you. See Pub. 550 for details.

If you elect to currently include in income the market discount on a bond, increase the basis of the bond by the market discount that has been included in income for that bond. See Pub. 550 for details.

If you elect to amortize bond premium on a taxable bond, reduce the basis of the bond by any bond premium amortization allowed as either an offset to interest income or as a deduction for that bond. Reduce the basis of a tax-exempt bond by any bond premium amortization for that bond. See Pub. 550 for details.

If a charitable contribution deduction is allowable because of a bargain sale of property to a charitable organization, you must allocate your basis in the property between the part sold and the part contributed based on the fair market value of each. See Pub. 544 for details.

For compensatory options granted after 2013, the basis information reported to you on Form 1099-B (or substitute statement) won’t reflect any amount you included in income upon grant or exercise of the option. Increase your basis by any amount you included in income upon grant or exercise of the option. For compensatory options granted before 2014, any basis information reported to you on Form 1099-B (or substitute statement) may or may not reflect any amount you included in income upon grant or exercise of the option; therefore, the basis may need to be adjusted. If the basis information reported to you on Form 1099-B (or substitute statement) doesn’t reflect an amount you included in income upon grant or exercise of the option, increase your basis by the amount you included in income upon grant or exercise of the option. See Pub. 525 for more information.

Solely for purposes of calculating a loss on the sale of the stock of a specified 10%-owned foreign corporation, if a corporate shareholder received an actual or constructive dividend after December 31, 2017, and that dividend qualified for the 100% dividends-received deduction, the shareholder must reduce its basis in the controlled foreign corporation stock in the amount of the dividend received, but not below zero.

Column (f)—Code

In order to explain any adjustment to gain (or loss) in column (g), enter the appropriate code(s) in column (f). See How To Complete Form 8949, Columns (f) and (g) , later. If more than one code applies, enter all the codes that apply in alphabetical order (for example, “BOQ”). Don't separate the codes by a space or comma.

Column (g)—Amount of Adjustment

Enter in this column any necessary adjustments to gain (or loss). Enter negative amounts in parentheses. Also, enter a code in column (f) to explain the adjustment. See How To Complete Form 8949, Columns (f) and (g) , later.

How To Complete Form 8949, Columns (f) and (g)

For most transactions, you don't need to complete columns (f) and (g) and can leave them blank. You may need to complete columns (f) and (g) if you got a Form 1099-B or 1099-S (or substitute statement) that is incorrect, if you are excluding or postponing a capital gain, if you have a disallowed loss, or in certain other situations. Details are in the table below. If you enter more than one code in column (f), see More than one code in the instructions for column (g) above.

IF . . .	THEN enter this code in column (f) . . .	AND. . .
You received a Form 1099-B (or substitute statement) and the basis shown in box 1e is incorrect	B	If this transaction is reported on a Part I with box B checked at the top or if this transaction is reported on a Part II with box E checked at the top, enter the correct basis in column (e), and enter -0- in column (g). If this transaction is reported on a Part I with box A checked at the top or if this transaction is reported on a Part II with box D checked at the top, enter the basis shown on Form 1099-B (or substitute statement) in column (e), even though that basis is incorrect. Correct the error by entering an adjustment in column (g). To figure the adjustment needed, see the Worksheet for Basis Adjustments in Column (g), later. Also, see Example 4—Adjustment for incorrect basis in the instructions for column (h), later.
You received a Form 1099-B (or substitute statement) and the type of gain (or loss) shown in box 2 is incorrect	T	Report the transaction on the correct part of Form 8949, and enter -0- in column (g) on that part of the form if there are no adjustments needed for the transaction.
If you received a Form 1099-B (or substitute statement) with the Ordinary box in box 2 checked and the security is a taxable contingent payment debt instrument subject to the noncontingent bond method, enter code “O” for the transaction in column (f) of the appropriate part of Form 8949 and complete the Worksheet for Contingent Payment Debt Instrument Adjustment in Column (g), later, to figure the amount to enter in column (g).
You received a Form 1099-B or 1099-S (or substitute statement) as a nominee for the actual owner of the property	N	Report the transaction on Form 8949 as you would if you were the actual owner, but also enter any resulting gain as a negative adjustment (in parentheses) in column (g) or any resulting loss as a positive adjustment in column (g). As a result of this adjustment, the amount in column (h) should be zero. However, if you received capital gain distributions as a nominee, report them instead, as described under Capital Gain Distributions in the Instructions for Schedule D (Form 1040).
You sold or exchanged your main home at a gain, must report the sale or exchange on Part II of Form 8949 (as explained in Sale of Your Home in the Instructions for Schedule D (Form 1040)), and can exclude some or all of the gain	H	Report the sale or exchange on Form 8949 as you would if you weren't taking the exclusion. Then enter the amount of excluded (nontaxable) gain as a negative number (in parentheses) in column (g). See the example in the instructions for column (g).
You received a Form 1099-B (or substitute statement) showing accrued market discount in box 1f	D	Use the Worksheet for Accrued Market Discount Adjustment in Column (g), later, to figure the amount to enter in column (g). However: If you received a partial payment of principal on a bond, don't use the worksheet. Instead, enter the smaller of the accrued market discount or your proceeds in column (g). Also, report it as interest on your tax return. If you chose to include market discount in income currently, enter -0- in column (g). Before figuring your gain (or loss), increase your basis in the bond by the market discount you have included in income for all years. See the instructions for code B above. If the disposition of a market discount bond results in a loss subject to the wash sale rules, enter “W” in column (f) and follow the instructions for code W below.
You sold or exchanged QSB stock and can exclude part of the gain	Q	Report the sale or exchange on Form 8949 as you would if you weren't taking the exclusion and enter the amount of the exclusion as a negative number (in parentheses) in column (g). However, if the transaction is reported as an installment sale, see Gain from an installment sale of QSB stock in the Instructions for Schedule D (Form 1040).
You can exclude all or part of your gain under the rules explained in the Schedule D instructions for DC Zone assets or qualified community assets	X	Report the sale or exchange on Form 8949 as you would if you weren't taking the exclusion. Then enter the amount of the exclusion as a negative number (in parentheses) in column (g).
You are electing to postpone all or part of your gain under the rules explained in the Schedule D instructions for any rollover of gain (for example, rollover of gain from QSB stock)	R	Report the sale or exchange on Form 8949 as you would if you weren't making the election. Then enter the amount of postponed gain as a negative number (in parentheses) in column (g).
You have a nondeductible loss from a wash sale	W	Report the sale or exchange on Form 8949 and enter the amount of the nondeductible loss as a positive number in column (g). See the Schedule D instructions for more information about wash sales generally and Pub. 550 for more information on wash sales involving substantially similar stock or securities. If you received a Form 1099-B (or substitute statement) and the amount of nondeductible wash sale loss shown in box 1g is incorrect, enter the correct amount of the nondeductible loss as a positive number in column (g). If the amount of the nondeductible loss is less than the amount shown on Form 1099-B (or substitute statement), attach a statement explaining the difference. If no part of the loss is a nondeductible loss from a wash sale transaction, enter -0- in column (g).
You have a nondeductible loss other than a loss indicated by code W	L	Report the sale or exchange on Form 8949 and enter the amount of the nondeductible loss as a positive number in column (g). See Nondeductible Losses in the Instructions for Schedule D (Form 1040).
You received a Form 1099-B or 1099-S (or substitute statement) for a transaction and there are selling expenses or option premiums that aren't reflected on the form or statement by an adjustment to either the proceeds or basis shown	E	Enter in column (d) the proceeds shown on the form or statement you received. Enter in column (e) any cost or other basis shown on Form 1099-B or 1099-S (or substitute statement). In column (g), enter as a negative number (in parentheses) any selling expenses and option premium that you paid (and that aren't reflected on the form or statement you received) and enter as a positive number any option premium that you received (and that isn't reflected on the form or statement you received). For more information about option premiums, see Gain or Loss From Options in the Instructions for Schedule D (Form 1040).
You had a loss from the sale, exchange, or worthlessness of small business (section 1244) stock and the total loss is more than the maximum amount that can be treated as an ordinary loss	S	See Small Business (Section 1244) Stock in the Schedule D (Form 1040) instructions.
You disposed of collectibles (see the Schedule D instructions)	C	Enter -0- in column (g). Report the disposition on Form 8949 as you would report any sale or exchange.
You report multiple transactions on a single row, as described in Exception 2 or Special provision for certain corporations, partnerships, securities dealers, and other qualified entities under Exceptions to reporting each transaction on a separate row, earlier	M	See Exception 2 and Special provision for certain corporations, partnerships, securities dealers, and other qualified entities under Exceptions to reporting each transaction on a separate row, earlier. Enter -0- in column (g) unless an adjustment is required because of another code.
You are electing to postpone all or part of your gain under the rules explained in the Schedule D instructions for investments in QOFs	Z	See How To Report an Election To Defer Tax on Eligible Gain Invested in a QOF , later.
You are reporting your gain from a QOF investment that you deferred in a prior tax year	Y	See How To Report Gain Previously Deferred in a QOF Investment , later.
You are a nonresident alien individual, foreign trust, foreign estate, or foreign corporation who sold or exchanged an interest in a partnership engaged in a U.S. trade or business	P	Report on Form 8949 the gain or loss on the sale or exchange by a nonresident alien individual, foreign trust, foreign estate, or foreign corporation of an interest in a partnership that is engaged in a U.S. trade or business. Enter in column (g) any adjustment resulting from the application of Regulations section 1.864(c)(8)-1(b) and (c). If you are required to file Schedule P (Form 1040-NR), see the instructions for lines 9 and 17. If you are required to file Schedule P (Form 1120-F), see the instructions for line 9.
You have an adjustment not explained earlier in this column	O	Enter the appropriate adjustment amount in column (g). See the instructions for column (g).
None of the other statements in this column apply because you have no adjustments	Leave columns (f) and (g) blank.

Column (h)—Gain (or Loss)

Figure gain (or loss) on each row. First, subtract the cost or other basis in column (e) from the proceeds (sales price) in column (d). Then take into account any adjustments in column (g). Enter the gain (or loss) in column (h). Enter negative amounts in parentheses.

How To Report an Election To Defer Tax on Eligible Gain Invested in a Qualified Opportunity Fund (QOF)

For more information on QOFs, see Pub. 544.

If you elect to defer tax on an eligible gain by investing in a QOF, report the eligible gain on the form and in the manner otherwise instructed. For example, individual taxpayers would report gain from the sale of stock on Form 8949 and Schedule D (Form 1040). If the gain is reported on Form 8949, do not make any adjustments for the deferral in column (g).

Report the deferral of the eligible gain on its own row of Form 8949 in Part I with box C checked or Part II with box F checked (depending on whether the gain being deferred is short term or long term). If you made multiple investments in different QOFs or in the same QOF on different dates, use a separate row for each investment. If you invested eligible gains of the same character (but from different transactions) on the same date into the same QOF, you can group those investments on the same row. In column (a), enter only the employer identification number (EIN) of the QOF into which you invested. In column (b), enter the date you invested in the QOF. Leave columns (c), (d), and (e) blank. Enter code “Z” in column (f) and the amount of the deferred gain as a negative number (in parentheses) in column (g).

Your investment in a QOF can be used to defer only long-term gain, only short-term gain, or a combination of both short-term and long-term gain. You do not need to trace or allocate the funds invested in a QOF to the specific gain being deferred, but the investment in the QOF must have occurred within the 180-day period beginning on the date the deferred gain was realized. If you realized both short-term and long-term gains during the 180-day period, you can choose how much of each gain to defer by reporting the deferral in Part I or Part II, as applicable. The character of the eligible gain will survive the investment in the QOF. When you recognize the eligible gain (either when you sell or exchange or otherwise dispose of your investment in the QOF or December 31, 2026, whichever is earlier), the gain you recognize will be the same character as the gain you deferred.

If you are attaching multiple Forms 8949 to your return, attach the Form(s) 8949 that lists code "Z" in column (f) first.

If you elect to defer tax on an eligible gain by investing in a QOF, you will need to complete a Form 8997 for each year you hold the investment and for the year you dispose of the investment. If you have held that investment for more than 5 years, see the instructions for Form 8997 for additional information regarding the basis of that investment.

How To Report Gain Previously Deferred in a QOF Investment

If you sold or exchanged your investment in a QOF during the tax year, you must report the amount of eligible gain that you previously deferred and that you are now recognizing. Report the gain from each investment on its own row. Check box C in Part I or check box F in Part II depending on whether the gain is short term or long term. The gain you recognize will be the same character as the gain you deferred. Put the EIN of the QOF investment you are selling in column (a). Complete columns (b), (c), (d), and (e). Enter code "Y" in column (f), and enter the amount of previously deferred gain as a positive number in column (g).

If you disposed of your investment in a QOF, you will also need to complete Form 8997. See the instructions for Form 8997 for more information.