Form 1040 Schedule D-1: Capital Gains and Losses Continuation Sheet (2016)

Important: Schedule D-1 Didn’t Exist for 2016 Returns

Schedule D-1 (Capital Gains and Losses – Continuation Sheet) was discontinued after the 2010 tax year. Starting with 2011, the IRS replaced it with Form 8949, Sales and Other Dispositions of Capital Assets.

So for 2016 tax returns:

• You do not use Schedule D-1.
• You must use Form 8949 (plus Schedule D) to report capital gains and losses.

The only time Schedule D-1 would still appear in 2016 is if you were amending an old pre-2011 return.

What Schedule D-1 Used to Do (Historical Context)

Before Form 8949 existed, Schedule D-1 was essentially extra pages for Schedule D.

You used it when:

• You sold capital assets like stocks, bonds, mutual funds, or real estate, and
• You had more transactions than Schedule D could hold.

The form mirrored Schedule D:

• Part I – Short-term (held 1 year or less)
• Part II – Long-term (held more than 1 year)

For each sale you listed:

• Description of the property (e.g., 100 sh XYZ Corp)
• Date acquired and date sold
• Sales price
• Cost or other basis
• Gain or loss

You then totaled the gains and losses on Schedule D-1 and carried those totals back to Schedule D, which did the final capital gain/loss math.

When You’d Use It in 2016 (Only for Old-Year Amendments)

In 2016, the only legitimate use of Schedule D-1 was when you were amending a tax year when the form was still valid, such as 2010.

Examples:

• You file Form 1040X in 2016 to amend your 2010 return
• You discover unreported 2010 stock transactions
• You receive a corrected 2010 Form 1099-B
• You fix basis or holding period errors from 2010

In that case, you would:

• Use the 2010 version of Schedule D-1
• Attach it to Form 1040X and a corrected 2010 Schedule D

For any original 2016 return or any amendment of 2011–2016 returns, Schedule D-1 is not allowed. You must use Form 8949 instead.

How Schedule D-1 Worked (High-Level, Historical)

When it was still in use (through 2010), the general workflow looked like this:

1. Gather your records
   • Forms 1099-B / 1099-S
   • Purchase confirmations and basis records
   • Notes on stock splits, dividend reinvestments, and returns of capital
2. Determine holding period
   • Short-term: held 1 year or less
   • Long-term: held more than 1 year
   • Count from the day after acquisition up to the sale date
3. Fill out Schedule D first
   • List up to 5 short-term and 5 long-term transactions
   • Once you ran out of lines, you moved to Schedule D-1
4. Continue on Schedule D-1
   • Part I for additional short-term sales
   • Part II for additional long-term sales
   • One line per transaction (or one line with “VARIOUS” for multiple acquisition dates, still separated by short vs. long term)
5. Total and transfer
   • Add up the gains/losses in column (f) for Part I → go to Schedule D, line 2
   • Add up Part II → go to Schedule D, line 9
6. Attach to the return in order
   • Schedule D
   • Then Schedule D-1 (Attachment Sequence 12A)

Why It Was Replaced by Form 8949

Starting with the 2011 tax year, brokers had to report cost basis information to the IRS. That change required more detailed tracking:

• Whether a sale was reported on Form 1099-B
• Whether basis was reported or not
• Whether you needed adjustments (wash sales, basis corrections, etc.)

Schedule D-1 wasn’t built for this level of detail, so the IRS created Form 8949, which:

• Groups transactions by how they appear on Form 1099-B
• Provides dedicated columns for adjustments and codes
• Feeds totals into Schedule D, similar to the old D-1 approach but with more precision

Common Historical Pitfalls (That Help Explain the Change)

Even though D-1 is gone, the old problem areas are the same issues Form 8949 is designed to fix:

• Vague descriptions
  • Writing “stock sale” instead of “100 sh ABC Corp” made matching difficult.
• Wrong holding period
  • Example: Buy March 1, 2009, sell March 1, 2010 → still short-term (not more than 1 year).
• Basis mistakes
  • Forgetting commissions, stock splits, dividend reinvestments, or return-of-capital adjustments.
• Wash sales
  • Failing to disallow the loss and adjust basis when you rebuy substantially identical stock within 30 days.
• Not totaling and transferring correctly
  • Completing D-1 but forgetting to bring totals back to Schedule D.

FAQs

Why can’t I use Schedule D-1 for a 2016 return?

Because it’s obsolete. For tax years 2011 and later, the IRS requires Form 8949 + Schedule D for capital gains and losses. Using Schedule D-1 for 2016 will cause processing problems and likely force you to amend.

What should I do if I accidentally used Schedule D-1 with a 2016 return?

You should:

1. Prepare Form 1040X (amended return)
2. Complete Form 8949 and Schedule D for 2016
3. Attach those to the 1040X
4. Include a brief explanation: e.g., “Used discontinued Schedule D-1 instead of Form 8949; correcting.”

I’m amending a 2010 return now. Which form do I use?

Use the 2010 versions of:

• Schedule D-1 (if you need extra space)
• Schedule D
• Attach them to Form 1040X for that year

You always use the forms for the tax year you’re amending, not the year you file the amendment.

What replaced Schedule D-1’s “extra pages” function?

Form 8949 took over that role. It still acts as the transaction detail sheet, but:

• Breaks transactions into categories based on 1099-B reporting
• Captures adjustments (like wash sales) more clearly
• Then passes subtotals to Schedule D, which does the final math

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