Additional information.

For more information, see the instructions for the forms listed above. Also, see Pub. 544, Sales and Other Dispositions of Assets, and Pub. 550, Investment Income and Expenses.

Gain from installment sales.

If the corporation sold property at a gain and it will receive a payment in a tax year after the year of sale, it must generally report the sale on the installment method unless it elects not to. However, the installment method may not be used to report sales of stock or securities traded on an established securities market.

Use Form 6252 to report the sale on the installment method. Also, use Form 6252 to report any payment received during the tax year from a sale made in an earlier year that was reported on the installment method. Enter gain from the installment sales on Schedule D, line 4 or line 11, as applicable. See the instructions for Form 6252.

To elect out of the installment method, report the full amount of the gain on Form 8949 for the year of the sale on a return filed by the due date (including extensions). If the original return was filed on time without making the election, the corporation can make the election on an amended return filed no later than 6 months after the original due date of the return (excluding extensions). Enter “Filed pursuant to section 301.9100-2” at the top of the amended return.

Gain on distributions of appreciated property.

Generally, gain (but not loss) is recognized on a nonliquidating distribution of appreciated property to the extent that the property's fair market value (FMV) exceeds its adjusted basis. See section 311.

Exclusion of gain from DC Zone assets.

If the corporation sold or exchanged a District of Columbia Enterprise Zone (DC Zone) asset acquired after 1997 and before 2012, and held for more than 5 years, it can exclude any qualified capital gain that the corporation would otherwise include in income. The exclusion applies to an interest in, or property of, certain businesses operating in the District of Columbia.

Exclusion of gain from qualified community assets.

If the corporation sold or exchanged a qualified community asset acquired after 2001 and before 2010, it may be able to exclude any qualified capital gain that the corporation would otherwise include in income. The exclusion applies to an interest in, or property of, certain renewal community businesses.

Gain on the constructive sale of certain appreciated financial positions.

Generally, the S corporation must recognize gain (but not loss) on the date it enters into a constructive sale of any appreciated position in stock, a partnership interest, or certain debt instruments as if the position were disposed of at FMV on that date.

The S corporation is treated as making a constructive sale of an appreciated position when it (or a related person, in some cases) does one of the following.

For details and other exceptions to these rules, see Pub. 550.

Gain from certain constructive ownership transactions.

Gain in excess of the net underlying long-term gain the corporation would have recognized if it had held a financial asset directly during the term of a derivative contract must be treated as ordinary income. See section 1260.

Gain on disposition of market discount bonds.

In general, a capital gain upon the disposition of a market discount bond is treated as interest income to the extent of accrued market discount as of the date of disposition. See sections 1276 through 1278 and Pub. 550 for more information on market discount. See the Instructions for Form 8949 for detailed information about how to report the disposition of a market discount bond.

Gain or loss on distribution of property in complete liquidation.

Generally, gain or loss is recognized on property distributed in a complete liquidation. Treat the property as if it had been sold at its FMV. See section 336.

Gain or loss on an option to buy or sell property.

See sections 1032 and 1234 for the rules that apply to a purchaser or grantor of an option or a securities futures contract (as defined in section 1234B). See Pub. 550 for details.

Gain or loss from a short sale of property.

Report the gain or loss on Form 8949 to the extent that the property used to close the short sale is considered a capital asset in the hands of the taxpayer. Report any short sale in the year the sale closes.

If a short sale closed in 2023 but the corporation didn’t get a 2023 Form 1099-B (or substitute statement) for it because the corporation entered into it before 2011, report it on Form 8949 in Part I with box C checked or Part II with box F checked (whichever applies). In column (a), enter (for example) “100 sh. XYZ Co.—2010 short sale closed.” Fill in the other columns according to their instructions. Report the short sale the same way if the corporation received a 2023 Form 1099-B (or substitute statement) that doesn't show the proceeds (sales price).

Gain on certain short-term federal, state, and municipal obligations (other than tax-exempt obligations).

If a short-term governmental obligation (other than a tax-exempt obligation) that is a capital asset is acquired at an acquisition discount, a portion of any gain realized is treated as ordinary income and any remaining balance is treated as a short-term capital gain. See section 1271.

Contingent payment debt instruments.

Any gain recognized on the sale, exchange, or retirement of a contingent payment debt instrument subject to the noncontingent bond method is generally treated as interest income rather than as capital gain. In certain situations, all or a portion of a loss recognized on the sale, exchange, or retirement of a contingent payment debt instrument subject to the noncontingent bond method may be treated as an ordinary loss rather than as a capital loss. See Regulations section 1.1275-4(b) and Pub. 1212, Guide to Original Issue Discount Instruments, for more information on contingent payment debt instruments subject to the noncontingent bond method. See the Instructions for Form 8949 for detailed information about how to report the disposition of a contingent payment debt instrument.

Loss from a sale or exchange between the corporation and a related person.

Except for distributions in complete liquidation of a corporation, no loss is allowed from the sale or exchange of property between the corporation and certain related persons. See section 267.

Loss from a wash sale.

A wash sale occurs if the corporation acquires (by purchase or exchange), or has a contract or option to acquire, substantially identical stock or securities within 30 days before or after the date of the sale or exchange. The corporation can’t deduct a loss from a wash sale of stock or securities (including contracts or options to acquire or sell stock or securities) unless the corporation is a dealer in stock or securities and the loss was sustained in a transaction made in the ordinary course of the corporation's trade or business. For more information on wash sales, see section 1091 and Pub. 550.

The wash sale rules don’t apply to a redemption of shares in a floating-NAV (net asset value) money market fund (MMF). For redemptions of shares in any MMF after October 2, 2023, the wash sale rules don't apply.

Report the transaction as the corporation otherwise would on Form 8949, Part I or II (depending on how long the corporation owned the stock or securities). Check the appropriate box. Enter “W” in column (f). Enter the nondeductible loss as a positive number in column (g). Complete all remaining columns. See the Instructions for Form 8949.

Loss from securities that are capital assets that become worthless during the year.

Except for securities held by a bank, treat the loss as a capital loss as of the last day of the tax year. See section 582 for the rules on the treatment of securities held by a bank. Also see section 165(g).

Undistributed long-term gains from a regulated investment company (RIC) or real estate investment trust (REIT).

Report the corporation's share of long-term gains from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, on Form 8949, Part II (with box F checked). Enter “From Form 2439” in column (a). Enter the gain in column (h). Leave all other columns blank. See the Instructions for Form 8949.

NAV method for money market funds.

Report capital gain or loss determined under the NAV method with respect to shares in a money market fund on Form 8949, Part I, with box C checked. Enter the name of each fund followed by “(NAV)” in column (a). Enter the net gain or loss in column (h). Leave all other columns blank. See the Instructions for Form 8949.

Deferral of gain invested in a qualified opportunity fund (QOF).

If the corporation realized gain from an actual, or deemed, sale or exchange with an unrelated person and during the 180-day period beginning on the date the corporation realized the gain, invested an amount of the gain in a QOF, the corporation may be able to elect to temporarily defer part or all of the gain that would otherwise be included in income. If the corporation makes the election, the gain is included in income only to the extent, if any, the amount of realized gain exceeds the aggregate amount invested in a QOF during the 180-day period beginning on the date gain is realized. The corporation may also be able to permanently exclude the gain from the sale or exchange of any investment in a QOF if the investment is held for at least 10 years. For more information, see section 1400Z-2.

Bonds and other debt instruments.

See Pub. 550.

Collectibles gain (28% rate gain) or loss.

Report any 28% rate gain or loss on Form 1120-S, Schedule K, line 8b (and each shareholder's share in box 8b of Schedule K-1 (Form 1120-S)). A collectibles gain or loss is any long-term gain or deductible long-term loss from the sale or exchange of a collectible that is a capital asset.

Collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible property.

Report any 28% rate gain or loss from a sale or exchange of a collectible on Form 8949, Part II (with the appropriate box checked). See the Instructions for Form 8949.

Also include gain (but not loss) from the sale or exchange of an interest in a partnership or trust held more than 1 year and attributable to unrealized appreciation of collectibles. See Regulations section 1.1(h)-1. Also, attach the statement required under Regulations section 1.1(h)-1(e).

Disposition of converted wetland or highly erodible cropland.

Any loss on the disposition of converted wetland or highly erodible cropland that is first used for farming after March 1, 1986, is reported as a long-term capital loss on Form 8949, but any gain on such a disposition is reported as ordinary gain on Form 4797. See section 1257 for details.

Nonbusiness bad debts.

A nonbusiness bad debt must be treated as a short-term capital loss and can be deducted only in the year the debt becomes totally worthless. See section 166(d) and Nonbusiness Bad Debts in Pub. 550 for details.

Nonrecognition of gain on sale of stock to an employee stock ownership plan (ESOP) or an eligible cooperative.

See section 1042 and Temporary Regulations section 1.1042-1T for rules under which the corporation can elect not to recognize gain from the sale of certain stock to an ESOP or an eligible cooperative.

Real estate subdivided for sale.

Certain lots or parcels that are part of a tract of real estate subdivided for sale may be treated as capital assets. See section 1237.

Rollover of gain from qualified small business (QSB) stock.

If the corporation sold QSB stock (defined below) it held for more than 6 months, it can postpone gain if it purchased other QSB stock during the 60-day period that began on the date of the sale. The corporation must recognize gain to the extent the sale proceeds exceed the cost of the replacement stock. Reduce the basis of the replacement stock by any postponed gain.

If the corporation chooses to postpone gain, report the entire gain realized on the sale on Form 8949, Part I or II (with the appropriate box checked).Enter “R” in column (f). Enter the amount of the postponed gain as a negative number (in parentheses) in column (g). Complete all remaining columns. See the Instructions for Form 8949.

The corporation must also separately state the amount of the gain rolled over on qualified stock under section 1045 on Form 1120-S, Schedule K, line 10. Each shareholder must determine if they qualify for the rollover at the shareholder level. Also, the corporation must separately state on that line (and not on Form 8949) any gain that could qualify for the section 1045 rollover at the shareholder level instead of the corporate level (because a shareholder was entitled to purchase replacement stock). If the corporation had a gain on qualified stock that could qualify for the exclusion under section 1202, report that gain on Form 8949 (and on Form 1120-S, Schedule K, line 10).

To be QSB stock, the stock must meet all of the following tests.

A qualified business is any business other than the following.

For more details about limits and additional requirements that may apply, see Pub. 550 or section 1202.

Sale of a partnership interest.

A sale or other disposition of an interest in a partnership owning unrealized receivables or inventory items may result in ordinary gain or loss. See Pub. 541, Partnerships.

Special rules for traders in securities.

Traders in securities are engaged in the business of buying and selling securities for their own account. To be engaged in a business as a trader in securities, the corporation:

The following facts and circumstances should be considered in determining if a corporation's activity is a business.

Like an investor, a trader must generally report each sale of securities (taking into account commissions and any other costs of acquiring or disposing of the securities) on Form 8949 unless one of the exceptions described under Exceptions to reporting each transaction on a separate row in the Instructions for Form 8949 applies. However, if a trader made the mark-to-market election (see the Instructions for Form 4797), each transaction is reported in Part II of Form 4797 instead of on Form 8949.

The limitation on investment interest expense that applies to investors doesn't apply to interest paid or incurred in a trading business. A trader reports interest expense and other expenses (excluding commissions and other costs of acquiring and disposing of securities) from a trading business on page 1 of Form 1120-S.

A trader may also hold securities for investment. The rules for investors will generally apply to those securities. If they apply, allocate interest and other expenses between the corporation's trading business and investment securities. Report investment interest expense on Form 1120-S, Schedule K, line 12b; and in box 12 of Schedule K-1 (Form 1120-S) using code H.

Transactions with respect to applicable partnership interests.

The long-term holding period for gains and losses with respect to applicable partnership interests is more than 3 years. If the holding period is 3 years or less, gains and losses with respect to applicable partnership interests are treated as short term. An applicable partnership interest is any interest in a partnership that, directly or indirectly, is transferred to (or is held by) the taxpayer in connection with the performance of substantial services by the taxpayer, or any other related person, in any applicable trade or business. See section 1061 and Pub. 541 for details.

Figure gains and losses with respect to the applicable partnership interest on Form 8949 by applying the special holding period rules discussed above. See the Instructions for Form 8949.