Form 8949 (2013): Tax Year Guide & Checklist
Report sales and dispositions of capital assets for tax year 2013 using Form 8949. This form consolidates broker-reported transactions with basis reporting requirements that are practical for most stock purchases made in 2011 or later. Taxpayers must file Form 8949 with Schedule D, separating transactions based on whether the basis was reported to the Internal Revenue Service.
Filing Steps:
1. Determine broker statements received for 2013
Identify which transactions include basis reported to the Internal Revenue Service by reviewing Form 1099-B or broker substitute statements. Brokers are required to report the basis for most stock acquired in 2011 or later. Distinguish covered securities (basis reported to Internal Revenue Service) from pre-2011 purchases and non-broker transactions where basis was not reported.
2. Segregate all short-term transactions
Short-term transactions involve capital assets held one year or less. Verify holding periods using acquisition and disposition dates, beginning the count on the day after you acquired the property and including the day you disposed of it. Record dates in month, day, year format as shown in columns (b) and (c) of Part I.
3. Select Box A, B, or C for short-term transactions
Box A applies when Form 1099-B shows the basis was reported to the Internal Revenue Service, regardless of whether adjustments are needed. Box B applies when Form 1099-B indicates that the basis was not reported to the Internal Revenue Service. Box C applies when no Form 1099-B was issued for the transaction. Complete separate Form 8949 pages if multiple boxes apply to your short-term transactions.
4. Enter short-term transaction details in Part I
Complete columns (a) through (h) for each transaction on a separate row. Column (a) requires a description of the property, including the number of shares for stock. Column (b) requires the date acquired, using the trade date, for exchange-traded securities. Column (c) requires the date sold or disposed of. Column (d) requires proceeds (sales price) as shown on Form 1099-B or the net proceeds if no Form was received. Column (e) involves cost or basis; if Box A is checked and the basis reported to the Internal Revenue Service is incorrect, enter the reported basis here and make corrections in column (g). Column (f) requires the adjustment code from the 2013 instructions if any adjustment is needed. Column (g) involves the adjustment amount to correct the basis or gain/loss. Column (h) requires a calculated gain or loss after combining columns (d), (e), and (g).
5. Complete totals and transfer to Schedule D
Total columns (d), (e), (g), and (h) for all short-term transactions on line 2 of Part I, subtracting negative amounts properly. Transfer these totals to Schedule D, line 1b if Box A was checked, line 2 if Box B was checked, or line 3 if Box C was checked. Ensure totals accurately reflect all transactions reported on that particular Form 8949 page.
6. Segregate all long-term transactions
Long-term transactions involve capital assets held for more than one year, as determined by the holding period calculation. Generally, property acquired by inheritance is reported as long-term regardless of the actual holding period. Apply the same date verification methods used for short-term transactions.
7. Select Box D, E, or F for long-term transactions
Box D applies when Form 1099-B shows the basis was reported to the Internal Revenue Service, regardless of whether adjustments are needed. Box E applies when Form 1099-B shows the basis was not reported to the Internal Revenue Service. Box F applies when no Form 1099-B was issued for the transaction. Complete separate Form 8949 pages if multiple boxes apply to your long-term transactions.
8. Enter long-term transaction details in Part II
Use the same column-by-column methodology as Part I, entering each transaction on a separate row. Complete columns (a) through (h) following the exact instructions for property description, dates, proceeds, basis, adjustments, and gain or loss calculations. Total columns (d), (e), (g), and (h) on line 2 of Part II, then transfer totals to Schedule D line 8b if Box D was checked, line 9 if Box E was checked, or line 10 if Box F was checked.
SIGNIFICANT 2013 TAX YEAR PROVISIONS:
Basis reporting for covered securities
The basis reporting requirement applies to most stock purchased in 2011 or later under broker reporting rules. Covered securities generally include stock acquired after 2010, mutual fund shares acquired after 2011, and dividend reinvestment plan shares acquired after 2010. Taxpayers must verify which transactions have a basis reported to the Internal Revenue Service by checking box 6b on Form 1099-B or reviewing broker substitute statements.
Optional aggregation for qualifying transactions (Exception 3)
For 2013, taxpayers may aggregate certain qualifying transactions and report them directly on Schedule D without completing Form 8949. This option applies only to transactions for which you received Form 1099-B showing the basis was reported to the Internal Revenue Service, no wash sale loss appears in box 5, and no adjustments are needed to the basis, type of gain or loss, or gain or loss amount. Short-term qualifying transactions may be reported directly on Schedule D line 1a. Long-term qualifying transactions may be reported directly on Schedule D, line 8a. This aggregation is optional; taxpayers may still report these transactions on Form 8949 if they prefer detailed documentation.
Estate and trusts filing requirements
Beginning in 2013, estates and trusts must use Form 8949 to report sales or exchanges of capital assets not reported on another form or schedule. Many transactions that estates and trusts previously reported on Schedule D or Schedule D-1 must now be reported on Form 8949. This change aligns estate and trust reporting with individual and corporate filing requirements.
Adjustment methodology for incorrectly reported basis
When Box A (short-term) or Box D (long-term) is checked, and the basis reported to the Internal Revenue Service is incorrect, taxpayers must enter the basis as reported to the Internal Revenue Service in column (e). The correction amount must be entered in column (g) with adjustment code "B" in column (f). Use the Worksheet for Basis Adjustments in Column (g) provided in the separate instructions to calculate the proper adjustment. This ensures reconciliation between Form 1099-B reporting and taxpayer return reporting by the Internal Revenue Service.
Multiple box elections and form completion
Each Form 8949 page (Part I or Part II) may have only one box checked. Transactions fitting different box descriptions require separate Form 8949 pages within the same part. For example, short-term transactions with basis reported to the Internal Revenue Service (Box A) must be on separate pages from short-term transactions with basis not reported (Box B). Complete as many copies of Part I and Part II as needed to categorize all transactions properly.
Column (f) adjustment codes
The 2013 instructions provide specific codes for various adjustments, including code "B" for incorrect basis on Form 1099-B, code "W" for nondeductible wash sale loss, code "E" for selling expenses or option premiums not reflected on Form 1099-B, code "H" for home sale exclusion, code "M" for multiple transactions reported on one row under exceptions, and other codes for specialized situations. If more than one code applies to a single transaction, enter all applicable codes in alphabetical order without spaces or commas.
Recordkeeping requirements
Maintain accurate records showing the basis and adjusted basis of property, including purchase price, commissions, improvements, depreciation, non-dividend distributions, and stock splits. Records must support the holding period calculation and any adjustments made in column (g). The Internal Revenue Service partners with companies offering Form 8949 software that can import trades from brokerage firms to help track adjusted basis in securities.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
