Form 1040 Schedule D-1: Capital Gains and Losses Continuation Sheet (2010)

What the Form Is For

Schedule D-1 is a continuation sheet for Schedule D (Capital Gains and Losses). You use it when you have more sales transactions than will fit on Schedule D itself.

On the 2010 Schedule D:

• Line 1 (short-term) has space for 5 transactions
• Line 8 (long-term) has space for 5 transactions

If you have more than 5 short-term or more than 5 long-term sales, you list the extras on Schedule D-1.

For each sale, you report:

• What you sold (e.g., “100 sh XYZ Co.”)
• Date acquired
• Date sold
• Sales price
• Cost or other basis
• Resulting gain or loss

Schedule D-1, like Schedule D, is split into:

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

After you list your extra transactions and total them on Schedule D-1, you carry those totals back to Schedule D, which then calculates your overall capital gain or loss. The IRS uses this detailed listing to match your return against Forms 1099-B reported by your brokers.

When You’d Use Schedule D-1 (Including Late / Amended Returns)

You attach Schedule D-1 to your original 2010 Form 1040 whenever:

• You file Schedule D, and
• You have more than 5 short-term or 5 long-term capital asset sales.

You may also need Schedule D-1 later if:

You Amend a 2010 Return

If you discover an error or omission in your 2010 capital gains reporting, you file Form 1040X (Amended U.S. Individual Income Tax Return) and attach:

• A corrected Schedule D, and
• Any Schedule D-1 forms needed to show all transactions.

Typical reasons to amend:

• You forgot a sale reported on a late or corrected Form 1099-B
• You misstated basis (what you paid, plus or minus adjustments)
• You mis-classified a sale as short-term vs. long-term

You generally have 3 years from the date you filed the original return (or the original due date, if later) to amend for a refund. If you owe more tax, amend as soon as possible to limit interest and penalties.

You E-file but Send Details on Paper

Some taxpayers e-file their main return but don’t transmit every transaction electronically. In that case you:

1. E-file Form 1040 and Schedule D
2. Complete Schedule D-1 (or an equivalent statement)
3. Attach it to Form 8453 (U.S. Individual Income Tax Transmittal for an IRS e-file Return)
4. Mail Form 8453 and the attached schedules to the IRS

Key Rules to Know

1. Every Transaction Must Be Listed

You must report each sale separately—no summary lines like “summary attached” or “available upon request.” For each line you enter:

• Description (column (a))
• Date acquired (b)
• Date sold (c)
• Sales price (d)
• Cost or other basis (e)
• Gain or loss (f)

2. When to Use Schedule D-1

Use Schedule D-1 only as an overflow sheet:

• More than 5 short-term transactions → extra ones go in Part I
• More than 5 long-term transactions → extra ones go in Part II

You can use multiple Schedule D-1 pages. Alternatively, you may attach your own statement, but it must follow the same layout and include all the same information.

3. Totals Flow Back to Schedule D

After you list every extra transaction:

• Add up column (f) for all short-term sales on Schedule D-1 →
  carry that total to Schedule D, line 2
• Add up column (f) for all long-term sales →
  carry that total to Schedule D, line 9

Schedule D then uses those totals to compute your net capital gain or loss.

4. Sales Price vs. Basis

Pay close attention to columns (d) and (e):

• Column (d) – Sales price
  • If Form 1099-B shows a gross amount, report the gross sales price
  • If it shows net proceeds (after commissions), enter that net amount
• Column (e) – Cost or other basis
  • Usually what you paid plus purchase commissions and certain adjustments
  • Do not double-count selling commissions—if they’re already subtracted in column (d), don’t add them again to basis

5. Mixed Acquisition Dates

If you sell a block of stock acquired in multiple purchases:

• You may enter one combined sale and use “VARIOUS” for the date acquired
• But you must still separate:
  • Short-term shares (Part I)
  • Long-term shares (Part II)

How to Complete Schedule D-1 (High Level)

Step 1: Gather Records

Collect:

• Forms 1099-B / 1099-S
• Purchase confirmations
• Records of reinvested dividends, stock splits, and improvements for real estate

You need enough detail to determine dates, proceeds, and accurate basis for each sale.

Step 2: Count Your Transactions

Check whether you exceed Schedule D’s built-in lines:

• More than 5 short-term sales → use Schedule D-1 Part I
• More than 5 long-term sales → use Schedule D-1 Part II

Only the “extra” sales go on Schedule D-1; the first five can remain on Schedule D.

Step 3: Classify as Short-Term or Long-Term

For each sale, determine your holding period:

• Held 1 year or less → short-term (Part I)
• Held more than 1 year → long-term (Part II)

The holding period starts the day after you acquired the asset and includes the day you sold it.

Step 4: Fill Out Schedule D-1

For each extra transaction:

1. Enter the description in column (a)
2. Enter date acquired and date sold in (b) and (c)
3. Enter sales price in (d)
4. Enter cost or other basis in (e)
5. Subtract (e) from (d) to get the gain or loss in (f)

Use additional sheets if needed.

Step 5: Total and Transfer

• Total all column (f) amounts in Part I → carry to Schedule D, line 2
• Total all column (f) in Part II → carry to Schedule D, line 9

Then complete the rest of Schedule D.

Common Mistakes and How to Avoid Them

Problem: Summary Reporting Instead of Line-by-Line
Some filers try to group all sales into one number.
Fix: Always report each sale on its own line (or in a line-by-line attachment).

Problem: Mixing Short-Term and Long-Term Sales
Combined reporting can distort your tax rate, since long-term gains get special rates.
Fix: Carefully classify each sale based on holding period and put it in the correct part.

Problem: Not Carrying Totals Back to Schedule D
Forgetting to transfer totals to lines 2 and 9 leaves Schedule D incomplete.
Fix: After finishing Schedule D-1, double-check you’ve entered both totals on Schedule D.

Problem: Basis Errors
Common mistakes include omitting purchase commissions, double-counting selling commissions, or ignoring reinvested dividends.
Fix: Reconstruct basis carefully from all records and confirm whether 1099-B shows gross or net proceeds.

Problem: E-filing but Failing to Mail Supporting Schedules
If you don’t send detailed transaction info electronically and also fail to mail Schedule D-1 with Form 8453, the IRS may treat your return as incomplete.
Fix: Follow e-file instructions exactly—if you opt for paper details, mail them promptly.

What Happens After You File

Once your return with Schedule D and Schedule D-1 is filed:

• The IRS matches your reported sales to Forms 1099-B / 1099-S from brokers and settlement agents.
• If something doesn’t match (missing sale, different amount, etc.), you may receive a CP2000 notice proposing an adjustment.
• If you have net capital losses, Schedule D applies the rules:
  • Losses offset capital gains first
  • Up to $3,000 of excess loss ($1,500 MFS) can offset ordinary income
  • Remaining unused loss carries forward to future years

Net gains flow to Form 1040, line 13, where they’re taxed at:

• Ordinary rates for short-term gains
• Preferential capital gains rates (0%, 15%, or 20% depending on income level) for long-term gains

The IRS generally has 3 years from your filing date to audit your return (extended to 6 years if you significantly underreport income). Keep:

• Broker statements
• Trade confirmations
• Basis calculations

for at least that long.

Frequently Asked Questions

Do I really have to list every single sale?

Yes. Each transaction needs its own line (or line in an attachment that mirrors Schedule D-1). The only shortcut allowed is using “VARIOUS” for the acquisition date when you bought the same stock in multiple lots—but you must still separate short-term and long-term portions.

Can I use a spreadsheet instead of the official Schedule D-1 form?

Yes, as long as:

• It has the same columns as Schedule D-1
• It clearly separates short-term and long-term sales
• You show totals that tie back to Schedule D lines 2 and 9

Most tax software can produce an acceptable attachment automatically.

What if the basis on my 1099-B is wrong?

Report the correct basis on Schedule D-1, even if it differs from the 1099-B. Keep proof (purchase confirmations, statements, etc.). If the IRS asks about the mismatch, you’ll use that documentation to support your numbers.

How do carryover losses interact with Schedule D-1?

Carryover losses from prior years don’t go on Schedule D-1. You:

• Compute them using the Capital Loss Carryover Worksheet in the Schedule D instructions
• Report them directly on Schedule D, lines 6 and 14

Schedule D-1 is only for listing current-year sales that don’t fit on Schedule D.

Sources: IRS 2010 Schedule D-1, Schedule D, and the 2010 Instructions for Schedule D, all available at IRS.gov.

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