Form 1040 Schedule D-1: Understanding the Discontinued Continuation Sheet
Important: Schedule D-1 (Continuation Sheet for Schedule D) was discontinued after tax year 2010. For the 2019 tax year, taxpayers use Form 8949 and Schedule D to report capital gains and losses. This guide explains what Schedule D-1 used to do and what replaced it for 2019 and later years.
What the Form Was For
Schedule D-1 was an overflow page for Schedule D (Capital Gains and Losses). If you had more capital asset transactions than Schedule D could hold—such as multiple:
- Stock or bond sales
- Mutual fund redemptions
- Real estate or other property sales
—you would continue listing them on Schedule D-1 using the same columns as Schedule D.
Like Schedule D, Schedule D-1 was divided into:
- Part I – Short-term capital gains and losses (held 1 year or less)
- Part II – Long-term capital gains and losses (held more than 1 year)
You had to provide details for each transaction: description of the property, dates acquired and sold, sales price, cost basis, and the resulting gain or loss.
What Replaced It for 2019
Starting with 2011, the IRS eliminated Schedule D-1 and replaced it with Form 8949, Sales and Other Dispositions of Capital Assets. By 2019, all detailed capital transactions had to be reported on Form 8949 first, then summarized on Schedule D.
For 2019 and later:
- Form 8949 = where you list each transaction
- Schedule D = where you summarize totals and compute overall capital gain or loss
When You’d Use It (or Its 2019 Replacement)
Historically, you used Schedule D-1 when:
- Schedule D didn’t have enough lines for all your trades or sales
- You were an active investor with many stock or fund trades
- You sold multiple investment properties or other capital assets
For 2019 returns (original, late, or amended):
You must use:
- Form 8949 to list transactions, and
- Schedule D to summarize them.
You’ll use Form 8949 for 2019 if you:
- Sold stocks, bonds, mutual funds, or ETFs through a broker
- Disposed of cryptocurrency or other digital assets
- Sold investment real estate (not your primary home only, unless reported on Form 1099-S)
- Sold or exchanged collectibles (art, coins, metals, etc.)
- Have wash sales, non-taxable exchanges, basis corrections, or other adjustments
For amended 2019 returns (Form 1040-X) or late-filed 2019 returns, the rule is the same: use Form 8949 and Schedule D, not Schedule D-1.
Key Rules
Even though Schedule D-1 is obsolete, the basic rules it followed still apply to Form 8949 and Schedule D for 2019:
1. Short-Term vs. Long-Term
- Short-term: Asset held 1 year or less → taxed at ordinary income rates
- Long-term: Asset held more than 1 year → taxed at preferential capital gains rates (0%, 15%, or 20% depending on income)
The holding period:
- Starts the day after you acquire the asset
- Includes the day you sell it
2. Accurate Basis Reporting
Your cost basis (what you paid plus certain adjustments) must be correct. For many securities, brokers now report basis to the IRS, so your return needs to line up with their Forms 1099-B to avoid mismatch notices.
3. Proper Attachment Order
- Historically, Schedule D-1 had Attachment Sequence No. 12A and went right after Schedule D.
- For 2019, you attach Form 8949 pages first, then Schedule D, then the main Form 1040.
4. Complete Reporting
You must report all capital transactions, even if:
- Your losses exceed your gains, or
- You can only deduct up to $3,000 in net capital losses ($1,500 if MFS)
Any unused losses carry forward to future years.
5. Matching Form 1099-B
Your return is matched against Forms 1099-B from brokers. If proceeds or basis don’t match and you don’t explain the difference on Form 8949, you’ll likely receive an IRS notice.
Step-by-Step (High Level, 2019 Process)
Even though Schedule D-1 is gone, the workflow for 2019 is similar—just done through Form 8949:
Step 1 – Gather Records
Collect for 2019:
- All Forms 1099-B (brokerage), 1099-S (real estate), and any crypto transaction reports
- Your own records: dates acquired, dates sold, proceeds, basis, and fees
Step 2 – Organize by Type
Separate:
- Short-term vs long-term
- Within each, group by whether basis was or was not reported to the IRS on Form 1099-B
Step 3 – Complete Form 8949
For 2019, use:
- Boxes A, B, C for short-term
- Boxes D, E, F for long-term
Based on whether:
- You got a Form 1099-B
- Basis was reported to the IRS
List each transaction on its own line.
Step 4 – Make Adjustments
Use:
- Column (f) for adjustment codes (e.g., wash sale, basis correction)
- Column (g) for the adjustment amount (+/-)
Step 5 – Subtotal Each Form 8949
At the bottom of each 8949 page, total the:
- Proceeds
- Basis
- Adjustments
- Gains/losses
Combine all pages with the same box checked.
Step 6 – Transfer to Schedule D
Carry category subtotals to Schedule D:
- Short-term totals → lines 1b, 2, 3
- Long-term totals → lines 8b, 9, 10
Step 7 – Finish Schedule D
Use Schedule D to:
- Compute total net capital gain or loss
- Apply the $3,000/$1,500 capital loss limit
- Carry the final result to Form 1040
Common Mistakes (and How to Avoid Them)
1. Using Outdated Forms
Trying to use Schedule D-1 for 2019 is an automatic error. Always:
- Download forms for the specific tax year from IRS.gov
- Use Form 8949 + Schedule D for 2019 capital transactions
2. Misclassifying Holding Periods
Remember:
- Buy on March 1, 2018 and sell on March 1, 2019 → held exactly 1 year → short-term
- Long-term requires more than one year (e.g., sell on March 2, 2019)
3. Incorrect Basis
Common basis mistakes:
- Ignoring reinvested dividends (which increase basis)
- Ignoring stock splits or return-of-capital distributions
- Forgetting to include fees/commissions in basis
Broker basis info helps, but you’re still responsible for accuracy.
4. Ignoring Wash Sale Rules
If you sell at a loss and buy “substantially identical” securities within 30 days before or after the sale:
- The loss is disallowed currently
- It is added to the basis of the new shares
These adjustments belong in Form 8949 columns (f) and (g).
5. Not Reporting “Offsetting” Transactions
Even if your net effect is zero (gains offset by losses), the IRS still expects to see all the transactions that generated those totals.
6. Checking the Wrong Box on Form 8949
If you mix:
- Basis-reported and non-basis-reported trades
- Or 1099-B and non-1099-B trades
on the same 8949 with the wrong box checked, you’ll confuse both the IRS computers and yourself. Always separate by box type.
What Happens After You File
Matching and Notices
After you file, the IRS:
- Runs your return through automated matching
- Compares your Form 8949/Schedule D totals with Forms 1099-B and 1099-S
If something doesn’t match, you may receive a CP2000 notice proposing additional tax. You can agree, disagree, or partially agree and respond with documentation.
Refunds and Tax Due
- If losses reduce your income, they may increase your refund or reduce tax due
- If you have large gains, you may owe more tax when the IRS processes your return
For 2019, e-filed returns with direct deposit usually processed in about 21 days under normal conditions.
Capital Loss Carryovers
If your capital losses exceed:
- Your capital gains plus
- The $3,000 / $1,500 annual deduction limit
the extra carries forward indefinitely.
Use the Capital Loss Carryover Worksheet in the 2019 Schedule D instructions to compute your carryover to 2020. The IRS does not track it for you.
Audit Considerations
You’re more likely to attract attention if:
- You report large losses relative to your income
- Your reported trades don’t match Forms 1099-B
- You have complex or unusual patterns of transactions
Keep all trade confirmations, 1099s, and basis calculations for at least three years (preferably longer if you have large carryovers).
Amending Later
If you discover errors after filing your 2019 return:
- File Form 1040-X for 2019
- Attach corrected Form 8949 and Schedule D
- Explain clearly what changed and why
You generally have 3 years from the original due date (or 2 years from when you paid the tax) to amend and claim a refund.
Frequently Asked Questions
Since Schedule D-1 doesn’t exist for 2019, what do I use instead?
Use Form 8949 plus Schedule D. Form 8949 lists the transactions; Schedule D summarizes the totals and computes your net capital gain or loss. For 2019, Schedule D instructions explicitly assume Form 8949 is used for detailed reporting.
How many Form 8949 pages can I attach?
As many as you need. Just remember:
- Use separate pages (or sections) for each box (A, B, C, D, E, F)
- Combine totals from all pages with the same box checked before carrying them to Schedule D
Do I need Schedule D if I only have capital gain distributions from mutual funds?
In most cases, yes. Capital gain distributions reported on Form 1099-DIV, box 2a typically go on Schedule D (and from there to Form 1040). Check the 2019 Form 1040 and Schedule D instructions—if in doubt, using Schedule D is the safer route.
What if I forgot to report a stock sale on my 2019 return?
File Form 1040-X for 2019 with:
- A corrected Form 8949 including the missing sale
- An updated Schedule D reflecting revised totals
Explain in Part III of Form 1040-X that you’re adding omitted capital transactions. If tax increases, pay with the amendment to minimize interest and penalties.
How do I report cryptocurrency for 2019?
Crypto is treated as property. Each sale, exchange, or use to buy goods/services is a taxable event. For 2019:
- Report each transaction on Form 8949 (description, dates, proceeds, basis, gain/loss)
- Summarize on Schedule D
- Answer the virtual currency question on Form 1040 accurately
Can I use tax software for all this?
Yes—and it’s usually easier. Good software can:
- Import 1099-B data from brokers
- Assign the correct Form 8949 checkboxes
- Handle wash sales and basis adjustments automatically
For complex or high-volume trading, software or a tax professional is strongly recommended.
What happens to capital losses I couldn’t use in 2019?
They carry forward to 2020 and later years until fully used. Use the Capital Loss Carryover Worksheet in the 2019 Schedule D instructions to calculate your carryover, and keep the worksheet with your 2019 tax file so you can use the numbers when preparing 2020 and beyond.
This guide is based solely on official IRS publications and guidance for the 2019 tax year. For exact details and edge cases, always refer to the 2019 Form 8949 and Schedule D instructions on IRS.gov or consult a tax professional.
