Form 1040 Schedule D-1: Capital Gains and Losses Continuation Sheet (2013 Tax Year)

What Form 1040 Schedule D-1 Is For

Schedule D-1 was historically a continuation sheet used by individual taxpayers to report additional capital gains and losses when they had more transactions than would fit on the main Schedule D (Form 1040). However, by the 2013 tax year, the IRS had phased out Schedule D-1 and replaced it with Form 8949, Sales and Other Dispositions of Capital Assets.

This change represented a significant shift in how the IRS required taxpayers to report stock sales, bond transactions, real estate sales, and other capital asset dispositions. Form 8949 became the new standard for detailed transaction reporting, with Schedule D serving as a summary form that aggregated the totals from one or more Forms 8949.

For taxpayers who had previously used Schedule D-1 in earlier tax years, the 2013 filing season required adapting to the new Form 8949 system. The transition was designed to improve IRS matching of reported transactions against Forms 1099-B and 1099-S received from brokers and other financial institutions.

When You'd Use Form 1040 Schedule D-1 (Late or Amended Returns)

Since Schedule D-1 was no longer in use for 2013 returns, taxpayers filing late 2013 returns or amended 2013 returns would need to use Form 8949 instead of Schedule D-1, even if they had used Schedule D-1 in prior years.

For late filers submitting an original 2013 Form 1040, all capital gains and losses must be reported using the current 2013 forms—specifically, Form 8949 for transaction details and Schedule D for totals. The form selection is based on the tax year being filed, not the year you're actually filing the return.

For amended returns using Form 1040-X for the 2013 tax year, you would attach a corrected Form 8949 and Schedule D rather than Schedule D-1. If you're correcting capital gains or losses, you'll need to complete new copies of Form 8949 showing all transactions (not just the ones being corrected) along with an updated Schedule D. The difference between your original and amended Schedule D amounts will flow through to your Form 1040-X calculations.

Importantly, if you electronically filed or are paper-filing late or amended 2013 returns, the IRS systems will not accept or process Schedule D-1 forms from earlier years—you must use the 2013-compliant Form 8949.

Key Rules or Details for 2013

Form Transition Rule: The most critical rule for 2013 is that Schedule D-1 is obsolete and replaced by Form 8949. All detailed transaction reporting must appear on Form 8949, which comes in two parts: Part I for short-term transactions (assets held one year or less) and Part II for long-term transactions (assets held more than one year).

Checkbox Categories: Form 8949 requires checking specific boxes that categorize your transactions based on whether you received a Form 1099-B showing cost basis was reported to the IRS (boxes A and D), cost basis was not reported (boxes B and E), or you didn't receive a Form 1099-B at all (boxes C and F). This categorization didn't exist with Schedule D-1.

Multiple Forms Allowed: If you have numerous transactions, you can use as many copies of Form 8949 as needed. Each copy should be completed with the appropriate checkbox category at the top. The totals from all your Form 8949 pages are then transferred to Schedule D.

Reporting Exceptions: For 2013, the IRS created three exceptions allowing certain taxpayers to bypass Form 8949 and report totals directly on Schedule D. The most significant exception (Exception 3) applied when all your Forms 1099-B showed basis was reported to the IRS, no wash sale losses applied, and you needed no adjustments to basis or gain/loss calculations. This streamlined reporting for straightforward brokerage transactions.

Basis Reporting Requirements: Unlike Schedule D-1, Form 8949 requires detailed reconciliation with broker-reported information. You must enter exactly what appears on your Form 1099-B in terms of proceeds and cost basis, then use adjustment columns if corrections are needed. This prevents mismatches with IRS records.

Holding Period Determination: The same holding period rules apply: short-term means you held the asset one year or less, while long-term means more than one year. Generally, you start counting the day after you acquired the property and include the day you disposed of it.

Step-by-Step (High Level)

Step 1: Gather All Transaction Documents: Collect all Forms 1099-B from brokers, Forms 1099-S from real estate closings, and your own records for any sales where you didn't receive IRS forms. Review each form to determine whether box 6b (for Form 1099-B) is checked, indicating basis was reported to the IRS.

Step 2: Separate Transactions by Holding Period and Reporting Category: Sort your transactions into six categories: short-term with basis reported to IRS (box A), short-term with basis not reported (box B), short-term with no Form 1099-B (box C), long-term with basis reported (box D), long-term with basis not reported (box E), and long-term with no Form 1099-B (box F).

Step 3: Complete Form 8949 for Each Category: Use a separate Form 8949 (or separate Part I or Part II) for each category that applies to you. Check the appropriate box at the top. List each transaction on a separate line, including: property description, acquisition date, sale date, proceeds, cost basis, any necessary adjustments with codes, and calculated gain or loss.

Step 4: Calculate Subtotals: At the bottom of each Form 8949 page, total the amounts in columns (d), (e), (g), and (h). These subtotals will be carried to Schedule D.

Step 5: Transfer Totals to Schedule D: Enter the subtotals from all your Form 8949 pages onto the appropriate lines of Schedule D (lines 1b, 2, 3, 8b, 9, and 10). Schedule D provides the framework for calculating your overall capital gain or loss, applying capital loss limitations, and determining what amount flows to Form 1040.

Step 6: Complete Schedule D Calculations: Follow Schedule D instructions to calculate your net short-term and long-term gains or losses, apply any capital loss carryovers from previous years, and determine your allowable capital loss deduction (limited to $3,000, or $1,500 if married filing separately). Schedule D also includes worksheets for calculating tax on capital gains at preferential rates.

Common Mistakes and How to Avoid Them

Mistake 1: Looking for Schedule D-1 Instead of Using Form 8949: The most common error for 2013 was taxpayers searching for Schedule D-1 based on prior-year experience. Always check which forms are current for your filing year by visiting IRS.gov and accessing the specific year's forms and instructions.

Mistake 2: Failing to Match Form 1099-B Amounts Exactly: Many taxpayers who knew their correct basis would simply enter it in column (e) without entering what the broker reported. The IRS matching program flags these discrepancies. The correct approach is to enter the broker-reported amount (even if wrong), then use column (f) code ""B"" and column (g) adjustment to correct it.

Mistake 3: Checking the Wrong Box at the Top of Form 8949: Mixing transactions from different categories on one form creates processing problems and IRS notices. Before filling out Form 8949, carefully sort your transactions and use separate forms or parts for each category (A through F). The checkbox determines how the IRS computer systems process your return.

Mistake 4: Omitting Transactions Because They're Not Profitable: The IRS receives copies of all Forms 1099-B and 1099-S. Even if a transaction resulted in a loss or broke even, you must report it. Unreported transactions trigger automated IRS notices (CP2000) proposing additional tax, even when no tax is actually owed.

Mistake 5: Forgetting to Enter Adjustment Codes in Column (f): When making adjustments in column (g), you must enter the appropriate code in column (f) to explain the adjustment. Common codes include ""W"" for wash sales, ""B"" for basis corrections, ""H"" for home sale exclusions, and ""E"" for expenses not included in broker reporting. Missing codes can cause IRS questions.

Mistake 6: Incorrectly Calculating Holding Periods: Taxpayers sometimes count the acquisition date as day one, but the holding period begins the day after acquisition. For example, stock purchased on March 15, 2012 and sold on March 15, 2013 was held exactly one year—making it short-term, not long-term. Long-term treatment requires holding more than one year (until at least March 16, 2013 in this example).

What Happens After You File

Once you file your 2013 Form 1040 with Form 8949 and Schedule D, the IRS processes your return through automated systems that match your reported capital gains and losses against the information returns (Forms 1099-B and 1099-S) filed by brokers, real estate agents, and other payers.

The IRS matching occurs several months after you file. If discrepancies are found—such as unreported proceeds, missing transactions, or basis amounts that don't match broker reports—you'll receive a CP2000 notice proposing changes to your return. This isn't a bill, but a proposal you can agree with, dispute, or partially agree with by providing explanation and documentation.

Your capital gains and losses flow through Schedule D to Form 1040, line 13, affecting your total tax calculation. If you have a net capital gain, it's added to your other income. If you have a capital loss, up to $3,000 ($1,500 if married filing separately) reduces your other income. Any excess capital loss carries forward to future tax years using Schedule D, line 14, and continues reducing future income or offsetting future capital gains until fully used.

For 2013 specifically, tax rates on long-term capital gains were 0%, 15%, or 20% depending on your taxable income bracket, representing a change from 2012 when the maximum rate was 15%. The Schedule D Tax Worksheet calculates the tax at these preferential rates if you have a net capital gain and your regular tax bracket would produce a higher tax.

If you sold your home and claimed the principal residence exclusion (up to $250,000 for single filers, $500,000 for married filing jointly), the IRS will verify you met the ownership and use tests. Although the transaction still appears on Form 8949 and Schedule D, the excluded amount reduces the taxable gain to zero or to the amount exceeding the exclusion.

State tax authorities also receive information from the IRS. Most states require you to report capital gains and losses on your state return, though state treatment may differ from federal. Some states don't tax long-term capital gains preferentially, treating all income the same.

FAQs

I used Schedule D-1 in 2012. Why can't I find Schedule D-1 for my 2013 taxes?

The IRS replaced Schedule D-1 with Form 8949 starting with the 2011 tax year, and by 2013, the transition was complete. Form 8949 provides more detailed information that helps the IRS match your reported transactions with the Forms 1099-B and 1099-S sent by brokers and other financial institutions. While this creates more paperwork for some taxpayers, it actually reduces IRS matching notices when completed correctly. You'll need to use Form 8949 for 2013, even if you're comfortable with the old Schedule D-1 format. The IRS Instructions for Schedule D specifically state that transactions previously reported on Schedule D-1 must now be reported on Form 8949.

Do I really need a separate Form 8949 for every category of transactions?

Yes, proper completion requires using separate Forms 8949 (or at least separate Part I or Part II sections) for each checkbox category that applies to your situation. This separation helps the IRS computer systems process returns efficiently. For example, if you have some stocks where your broker reported cost basis to the IRS and other stocks purchased before brokers were required to track basis, these go on different forms with different checkboxes (A versus B for short-term, or D versus E for long-term). While this may seem tedious with multiple brokerage accounts, tax preparation software handles the categorization automatically, and the IRS provides the option to attach statements in the same format if you have many transactions.

My brokerage gave me a statement with 50 stock trades. Must I list every single transaction?

Generally yes, each transaction appears on a separate row of Form 8949. However, the IRS provides three helpful exceptions. Exception 3 is the most useful for individual investors: if all your transactions are reported on Forms 1099-B showing basis was reported to the IRS (box 6b checked), contain no wash sale losses in box 5, and require no adjustments, you can report the totals directly on Schedule D lines 1a or 8a without completing Form 8949 at all. For 2013, this exception significantly reduced paperwork for many taxpayers with straightforward brokerage accounts. You must keep the Forms 1099-B to support these totals if the IRS later questions your return. If you don't qualify for Exception 3, you can use multiple copies of Form 8949 or attach a statement with the same information in the same format.

What if my broker's Form 1099-B shows the wrong cost basis for my stock?

This is actually a common situation, particularly for shares acquired through inheritance, gifts, or in tax years before brokers were required to track and report basis. The key is to report the transaction correctly while avoiding IRS mismatches. Enter the incorrect basis shown on Form 1099-B in column (e) of Form 8949, then enter code ""B"" in column (f) to indicate a basis adjustment. In column (g), enter an adjustment that corrects to your proper basis. This approach ensures the proceeds in column (d) match what the broker reported, satisfying the IRS matching program, while column (h) shows your correct gain or loss. Keep documentation supporting your correct basis—such as inheritance valuations, gift tax returns, or purchase confirmations—in case the IRS requests it later.

Can I file my 2013 return late in 2025 using these old forms?

Yes, you would file a late 2013 Form 1040 using the 2013 versions of all forms and schedules, including Form 8949 and Schedule D. The IRS maintains prior-year forms on IRS.gov indefinitely. Visit the Prior Year Forms and Publications page and select 2013 to download the correct forms. Do not use current-year forms for a prior-year return, as tax laws, form formats, and line numbers change from year to year. When filing late, remember that any refund you're entitled to may be lost if you file more than three years after the original due date (generally April 15, 2014, plus extensions). However, if you owe tax, you should file immediately to stop penalties and interest from accruing further, even though penalties have already accumulated since 2014.

What if I sold my house in 2013 and qualify for the home sale exclusion?

You must report the home sale on Form 8949, Part II (long-term) with box F checked, even if your entire gain is excluded from income. This requirement applies whenever you received a Form 1099-S from the closing, or when you can't exclude all the gain, or when you used part of the home for business or rental purposes. Complete columns (a) through (e) showing the property description, dates, sales price, and basis. Then enter code ""H"" in column (f) and the exclusion amount as a negative number in parentheses in column (g). This reduces your gain in column (h) to zero or to the non-excludable amount. Don't simply omit the transaction from your return—doing so triggers IRS matching notices when the IRS receives the Form 1099-S showing the sale occurred. The Instructions for Schedule D provide detailed guidance on home sales, including special rules for homes used partly for business and homes inherited from a spouse.

If I have capital losses exceeding the $3,000 deduction limit, what happens to the unused loss?

Capital losses that exceed the annual $3,000 deduction limit ($1,500 if married filing separately) carry forward indefinitely to future tax years. You report the carryover on Schedule D, line 14, of your next year's return (2014 in this case). The carryover maintains its character as short-term or long-term loss. In future years, the carried-over loss first offsets any capital gains, and if capital losses still exceed capital gains, you can deduct another $3,000 against ordinary income. This continues year after year until the loss is fully used. It's essential to track your capital loss carryover accurately, as the IRS doesn't track it for you. Many taxpayers attach their own carryover calculation worksheet to their return to document the carryforward amount for future reference.

Sources

Sources: All information in this summary comes exclusively from official IRS sources, including the 2013 Instructions for Form 1040, 2013 Instructions for Schedule D (Form 1040), 2013 Instructions for Form 8949, and the IRS Prior Year Forms page.

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