Special rules for determining basis.

In general, the basis of property is its cost. See section 1012 and the related regulations. Special rules for determining basis are provided in sections in subchapters C, K, O, and P of the Code. These rules may apply to the:

Attach an explanation if the corporation uses a basis other than actual cost of the property. See the instructions for Form 8949, column (e).

A RIC's or REIT's basis in an asset it held on January 1, 2001, for which it made an election to recognize any gain under section 311 of the Taxpayer Relief Act of 1997, is the asset's closing market price or fair market value (FMV), whichever applies, on the date of the deemed sale and reacquisition, whether the deemed sale resulted in a gain or unallowed loss.

See section 852(f) for the treatment of certain load charges incurred in acquiring stock in a RIC with a reinvestment right.

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 12, 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 may make the election on an amended return filed no later than 6 months after the original due date (excluding extensions). Write “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 FMV exceeds its adjusted basis. See section 311.

Exclusion of gain from DC Zone assets.

If the corporation sold or exchanged a qualified District of Columbia Enterprise Zone (DC Zone) asset acquired after 1997 and before 2012, and held for more than 5 years, it may 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, if the corporation holds an appreciated financial position in stock or certain other interests, it may have to recognize gain (but not loss) if it enters into a constructive sale (such as a “short sale against the box”). See Pub. 550.

Gain from certain constructive ownership transactions.

Gain in excess of the underlying net long-term capital 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. If any portion of the constructive ownership transaction was open in any prior year, the corporation may have to pay interest. See section 1260(b) for details, including how to figure the interest. Include the interest as an additional tax on Form 1120, Schedule J, line 9g (or the applicable line for other income tax returns).

Gain on disposition of market discount bonds.

In general, if the corporation realizes a capital gain upon the disposition of a market discount bond, the gain is recharacterized 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.

Gains on certain insurance property.

Form 1120-L filers with gains on property held on December 31, 1958, and certain substituted property acquired after 1958, should see section 818(c).

Gains and losses from passive activities.

A closely held or personal service corporation that has a gain or loss that relates to a passive activity (section 469) may be required to complete Form 8810, before completing Form 8949 and Schedule D. An applicable loss may be limited under the passive activity rules. See Form 8810 and the Instructions for Form 8810.

Gains and losses of foreign corporations from the disposition of investment in U.S. real property.

Foreign corporations must report gains and losses from the disposition of U.S. real property interests. For more information, see section 897. Also, see section 897(c) for the definition of a U.S. real property interest, section 897(k) for special rules for real estate investment trusts, and section 897(l) for special rules relating to qualified foreign pension funds.

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. An exception to this rule applies for liquidations of certain subsidiaries. See sections 336 and 337 for more information and other exceptions to the general rules.

Gain or loss on certain asset transfers to a tax-exempt entity.

A taxable corporation that transfers all or substantially all of its assets to a tax-exempt entity or converts from a taxable corporation to a tax-exempt entity in a transaction other than a liquidation must generally recognize gain or loss as if it had sold the assets transferred at their FMV. For details and exceptions, see Regulations section 1.337(d)-4.

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

If a short sale closed in 2023 but you did not get a 2023 Form 1099-B (or substitute statement) for it because you 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 you 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, then, on any gain realized, a portion is treated as ordinary income and any remaining balance is treated as a short-term capital gain. See section 1271.

Contingent payment debt instruments.

If the corporation sells a taxable contingent payment debt instrument subject to the noncontingent bond method at a gain, the gain is ordinary income (interest income), even if the corporation holds the debt instrument as a capital asset. If the corporation sells a taxable contingent payment debt instrument subject to the noncontingent bond method at a loss, its loss is an ordinary loss to the extent of its prior original issue discount (OID) inclusions on the debt instrument. If the debt instrument is a capital asset, treat any loss that is more than the corporation's prior OID inclusions as a capital loss. See Regulations section 1.1275-4(b) and Pub. 1212, Guide to Original Issue Discount (OID), for more information on contingent payment debt instruments subject to the noncontingent bond method.

See the Instructions for Form 8949 for information on how to report the gain or loss.

At-risk limitations (section 465).

If the corporation sold or exchanged a capital asset used in an activity to which the at-risk rules apply, combine the gain or loss on the sale or exchange with the profit or loss from the activity. If the result is a net loss, complete Form 6198, At-Risk Limitations. Report any gain from the capital asset on Form 8949, Schedule D, and Form 6198.

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 a sale or exchange that results in a loss. The corporation cannot 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.

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.

Losses limited after an ownership change or acquisition.

If the corporation has undergone an “ownership change” as defined in section 382(g), section 383 may limit the amount of capital gains that may be offset by prechange capital losses. In addition, section 382(h) may in some cases limit capital losses recognized after an ownership change when the loss accrued before the ownership change. Also, if a corporation acquires control of another corporation (or acquires its assets in a reorganization),
section 384 may limit the amount of recognized built-in capital gains that may be offset by preacquisition capital losses.

Loss from the sale or exchange of capital assets of an insurance company taxable under section 831.

Capital losses of a casualty insurance company are deductible to the extent that the assets were sold to meet abnormal insurance losses or to provide for the payment of dividend and similar distributions to policyholders. See section 834(c)(6).

Gains and losses from partnerships, estates, or trusts.

Report the 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 (loss) on Part I with box C checked. Report a net long-term capital gain (loss) on Part II with box F checked. See the Instructions for Form 8949.

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.

Amounts from Form 2438.

Enter any net short-term capital gain from line 4 of Form 2438, Undistributed Capital Gains Tax Return, on Form 8949, Part I, with box C checked. Identify the gain as “Net short-term capital gain from Form 2438 line 4” in column (a). Enter the amount of the gain in column (h). Leave all other columns blank.

Enter the amount from line 12 of Form 2438 on Form 8949, Part II, with box F checked. Identify the gain as “Undistributed capital gains not designated (from Form 2438)” in column (a). Enter the amount of the gain in column (h). Leave all other columns blank.

Net Asset Value (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 Qualified Opportunity Fund (QOF).

If the corporation has an eligible gain (defined below), the corporation can invest that gain in a QOF and elect to defer part or all of the gain that it would otherwise include in income. The gain is deferred until the corporation disposes of the investment in the QOF or December 31, 2026, whichever is earlier. If the corporation makes the election, only include gain to the extent, if any, the amount of realized gain is more than the aggregate amount invested in a QOF during the 180-day period beginning on the date the gain was 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.