What Is IRS Form 8949?
IRS Form 8949 is used to report the sale or disposition of capital assets, such as stocks, bonds, cryptocurrency, real estate, or other investments. It provides detailed transaction information that supports the totals reported on Schedule D.
Form 8949 helps the IRS verify capital gains and losses and how they were calculated.
What Is Form 8949 Used For?
Form 8949 is used to:
- Report individual sales or dispositions of capital assets
- Reconcile cost basis, proceeds, and adjustments
- Separate short-term and long-term transactions
- Explain differences between taxpayer records and broker statements
It is required when transactions are not fully summarized elsewhere or when adjustments are needed.
When Should You File Form 8949?
You generally need to file Form 8949 if:
- You sold investments during the tax year
- You received Form 1099-B with reported transactions
- Adjustments to basis, dates, or proceeds are required
- You sold cryptocurrency or other assets requiring detail
Form 8949 is filed with your annual tax return and supports Schedule D.
IRS Notices This Form Is Commonly Used With
Issues related to Form 8949 often appear alongside IRS notices involving income mismatches or adjustments, including:
- CP2000 – Proposed changes due to unreported or mismatched investment income
- CP11 / CP12 – IRS corrections resulting in a balance due or refund
- Audit or adjustment letters related to capital gains reporting
Form 8949 provides the transaction-level detail needed to resolve discrepancies.
When NOT to Use Form 8949
Do not use Form 8949 if:
- All transactions are correctly summarized on Schedule D with no adjustments required
- The IRS does not require transaction-level detail for your situation
- You are correcting unrelated income or deduction errors (use Form 1040-X)
What Information Is Required on Form 8949?
Form 8949 generally requires:
- Description of each asset sold
- Dates acquired and sold
- Sales proceeds and cost basis
- Codes and amounts for any adjustments
- Classification as short-term or long-term
Accurate records from brokers or exchanges are essential.
Where and How to File Form 8949
Form 8949 is filed:
- Attached to your Form 1040 or 1040-SR
- Electronically or by mail with your annual return
- Alongside Schedule D, which summarizes totals
It is not filed separately.
What Happens After You File Form 8949?
After filing:
- The IRS processes the capital gains and losses
- Totals flow to Schedule D and your tax calculation
- Errors or omissions may trigger adjustment notices
- Proper reporting reduces the risk of IRS correspondence
Related IRS Forms
Forms commonly associated with capital asset reporting include:
- Schedule D (Form 1040) – Capital Gains and Losses
- Form 1099-B – Proceeds from broker and barter exchange transactions
- Form 1040-X – Amended return, if corrections are needed
Summary
IRS Form 8949 is used to report detailed sales and dispositions of capital assets and to reconcile capital gains and losses with broker-reported information. Accurate completion supports Schedule D and helps prevent IRS adjustment notices.
Scope Note
This page explains the purpose and general use of IRS Form 8949. It does not provide legal or tax advice.