Form 8949 (2014): Tax Year Guide & Checklist
Form 8949 reports sales and dispositions of capital assets for 2014, separating short-term and long-term transactions based on holding period. The 2014 tax year introduced expanded basis reporting requirements for specific debt instruments acquired after 2013, in addition to the existing stock basis reporting requirements for purchases made in 2011 or later. Taxpayers must file Form 8949 with Schedule D, organizing transactions by whether the basis was reported to the Internal Revenue Service.
Filing Steps:
1. Determine the holding period for each asset
Calculate whether each asset sold or disposed of in 2014 qualifies as short-term or long-term. Assets held for one year or less are classified as short-term and reported in Part I. Assets held for more than one year are considered long-term and are reported in Part II. Begin counting the holding period on the day after you acquired the property and include the day you disposed of it.
2. Obtain and review Form 1099-B or broker substitute statements
Review all Forms 1099-B or broker substitute statements received for 2014 sales to determine which transactions had basis reported to the Internal Revenue Service. The 2014 Form 1099-B was redesigned to match numbered boxes with Form 8949 columns and includes an "Applicable check box on Form 8949" indicator near the top to guide the selection of boxes. Document acquisition dates and disposition dates in columns (b) and (c) using month, day, year format as required.
3. Select the appropriate box for short-term transactions (Part I)
Check Box A for short-term transactions reported on Form 1099-B with basis reported to the Internal Revenue Service, regardless of whether adjustments are needed. Check Box B for short-term transactions reported on Form 1099-B where the basis was not reported to the Internal Revenue Service. Check Box C for short-term transactions not reported on any Form 1099-B.
Each Part I page must have only one box checked; use separate pages if multiple boxes apply to your transactions.
4. Complete Part I transaction details
Enter each transaction separately with description in column (a), acquisition date in column (b), disposition date in column (c), proceeds in column (d), and basis in column (e). Complete columns (f) and (g) only if adjustments to gain or loss are needed, entering the appropriate code in column (f) and the adjustment amount in column (g). Calculate gain or loss in column (h) by subtracting column (e) from column (d) and combining with any column (g) adjustment.
5. Apply Exception 1 for qualifying short-term transactions (optional)
If you have short-term transactions qualifying for Box A with basis reported to the Internal Revenue Service, no adjustments shown in box 1g of Form 1099-B, and no adjustments needed to basis, type of gain or loss, or gain or loss amount, you may aggregate these transactions. Report the combined totals directly on Schedule D line 1a without completing Form 8949 for these specific transactions.
This exception is optional; you may still report qualifying transactions on Form 8949 if preferred.
6. Total and transfer Part I amounts
If reporting transactions on Form 8949 Part I, total columns (d), (e), (g), and (h) on line 2, 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. Complete additional Part I pages with the same box checked if more space is needed.
7. Select the appropriate box for long-term transactions (Part II)
Check Box D for long-term transactions reported on Form 1099-B with basis reported to the Internal Revenue Service, regardless of whether adjustments are needed. Check Box E for long-term transactions reported on Form 1099-B where the basis was not reported to the Internal Revenue Service.
Check Box F for long-term transactions not reported on any Form 1099-B. Use separate Part II pages for each box type that applies to your long-term transactions.
8. Complete Part II transaction details and totals
Follow the same methodology as Part I for entering transaction details in columns (a) through (h). Enter inherited property sales on Part II with "INHERITED" in column (b). Total columns (d), (e), (g), and (h) on line 2 of Part II. 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.
9. Apply Exception 1 for qualifying long-term transactions (optional)
If you have long-term transactions qualifying for Box D with basis reported to the Internal Revenue Service, no adjustments shown in box 1g of Form 1099-B, and no adjustments needed, you may aggregate these transactions. Report the combined totals directly on Schedule D line 8a without completing Form 8949 for these specific transactions. This aggregation relief is optional and applies only to transactions meeting all Exception 1 criteria.
SIGNIFICANT 2014 TAX YEAR PROVISIONS:
Expanded basis reporting for covered securities
Brokers must report basis to the Internal Revenue Service for most stock purchased in 2011 or later and for specific debt instruments acquired after 2013. Covered securities generally include stock acquired after 2010, mutual fund shares acquired after 2011, dividend reinvestment plan shares acquired after 2010, specific debt instruments acquired after 2013, particular options and warrants granted or acquired after 2013, and securities future contracts entered into after 2013.
Review box 3 of Form 1099-B to verify whether the basis was reported to the Internal Revenue Service before selecting boxes.
Form 1099-B redesign for easier completion.
The 2014 Form 1099-B includes information reported in boxes numbered to match corresponding lines and columns on Form 8949. A new "Applicable check box on Form 8949" indicator appears near the top of Form 1099-B to guide taxpayers in selecting the correct box (A through F). Box 1e shows cost or other basis, box 1f shows adjustment codes, and box 1g shows adjustment amounts when applicable.
Exception 1 for direct Schedule D reporting
Taxpayers may aggregate qualifying transactions and report them directly on Schedule D, lines 1a (for short-term transactions) or 8a (for long-term transactions), without completing Form 8949. This exception applies only to transactions with basis reported to the Internal Revenue Service, no adjustments shown in box 1g of Form 1099-B, and no adjustments needed to basis, type of gain or loss, or gain or loss amount.
Transactions not meeting all Exception 1 criteria must be reported on Form 8949.
Exception 2 for the attached statement reporting
Any taxpayer may use Exception 2 to report transactions on attached statements instead of listing each transaction separately on Form 8949. The attached statements must contain all the same information as Form 8949 in a similar format, including property description, acquisition and disposition dates, proceeds, basis, adjustment codes, adjustments, and gain or loss.
Enter combined totals from all attached statements on Form 8949 with the appropriate box checked. This exception applies to transactions under any of the boxes (A, B, C, D, E, or F).
Incorrect basis adjustment methodology
If Box A (short-term) or Box D (long-term) is checked and the basis reported to the Internal Revenue Service is incorrect, enter the basis as reported to the Internal Revenue Service in column (e). Enter code "B" in column (f) and the correction amount in column (g) using the Worksheet for Basis Adjustments in Column (g) provided in the instructions.
This methodology preserves Internal Revenue Service reconciliation between Form 1099-B reporting and tax return reporting.
Special provisions for qualified entities
Certain corporations, partnerships, securities dealers, and nonprofit organizations may use a special provision for summary reporting when filing more than five transactions for a Part. Individual taxpayers are not eligible for this special provision except in rare circumstances.
Qualified entities checking this provision should review the detailed requirements in the Form 8949 instructions under "Special provision for certain corporations, partnerships, securities dealers, and other qualified entities."
Form attachment and identification requirements
Form 8949 uses attachment sequence number 12A and must be filed with Schedule D. No standalone filing is permitted. Ensure your Social Security number or taxpayer identification number appears on page 2 if submitting multiple Form 8949 pages. Joint filers may list transactions on separate forms or combine them, but must include totals from all Forms 8949 for both spouses on Schedule D.
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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.
