What the Form Is For

Schedule D (Form 1040) is the IRS form you use to report profits or losses from selling investments and other capital assets during the 2013 tax year. Think of it as the “scorecard” for your investment activities—whether you made or lost money when you sold stocks, bonds, real estate (including your home under certain conditions), mutual funds, or even collectibles like artwork or coins.

The form calculates your overall capital gains (profits) or capital losses from these sales, which then affects how much income tax you owe or the size of your refund. Capital assets include most property you own for personal use or investment—your house, car, furniture, stocks, bonds, and more. However, certain property types don’t qualify, including inventory held for sale to customers, property used in your trade or business, and accounts receivable.

For 2013, Schedule D works in tandem with Form 8949 (Sales and Other Dispositions of Capital Assets). Form 8949 lists individual transactions in detail, while Schedule D summarizes those transactions and calculates your final capital gain or loss. This two-form system ensures accurate reporting and helps the IRS match your reported sales with information from brokers and other financial institutions.

When You’d Use It (Late/Amended Filing)

You must file Schedule D for 2013 if you sold or exchanged capital assets during that year, even if you had no taxable gain. This includes situations where you received a Form 1099-B from a broker, Form 1099-S for real estate sales, or had capital gain distributions from mutual funds.

Original Filing Deadline

Schedule D for tax year 2013 should have been filed with your Form 1040 by April 15, 2014 (or October 15, 2014, if you filed an extension).

Late Filing

If you missed the deadline and haven’t filed yet, you should file your 2013 return as soon as possible. The IRS may assess late filing penalties (typically 5% of unpaid taxes per month, up to 25%) and late payment penalties (0.5% per month).
However, if you’re entitled to a refund, there’s no penalty for late filing—but you generally must file within three years of the original due date to claim that refund. For 2013 returns, that deadline was April 15, 2017.

Amended Returns

If you already filed your 2013 return but made an error on Schedule D—such as forgetting to report a stock sale or incorrectly calculating basis—you can file an amended return using Form 1040-X. You generally have three years from the date you filed your original return or two years from when you paid the tax (whichever is later) to file an amendment. For most 2013 filers, this deadline was April 15, 2017.
If you’re making certain elections (like opting out of installment sale treatment), you may have up to six months after the original due date to amend.

Key Rules or Details for 2013

Tax Rate Changes

Beginning in 2013, the maximum tax rate on long-term capital gains and qualified dividends increased from 15% to 20% for high-income taxpayers.
The 20% rate applied to taxpayers in the new 39.6% ordinary income bracket. Lower-income taxpayers still qualified for 0% and 15% long-term capital gains rates, depending on their tax bracket.
Short-term capital gains (assets held one year or less) continued to be taxed at ordinary income rates.

Holding Period

The holding period determines whether your gain or loss is short-term or long-term:

• Short-term: held one year or less
• Long-term: held more than one year

This distinction matters because long-term gains receive preferential tax treatment.

Loss Limitations

If your capital losses exceed your capital gains, you can deduct up to $3,000 of net losses against other income ($1,500 if married filing separately).
Excess losses can be carried forward indefinitely to offset future gains—this is called a capital loss carryover.

Form 8949 Requirement

For 2013, most taxpayers had to complete Form 8949 before filling out Schedule D.
Form 8949 lists each transaction individually—showing description, acquisition and sale dates, proceeds, cost basis, and adjustments.
Exception: You could report transactions directly on Schedule D (lines 1a or 8a) if your broker reported cost basis to the IRS and no adjustments were needed.

Wash Sale Rules

You can’t claim a loss if you sell stock or securities at a loss and buy substantially identical securities within 30 days before or after the sale.
The disallowed loss is added to the basis of the new securities.

Step-by-Step (High Level)

Step 1: Gather Your Documents

Collect all:

• Forms 1099-B (brokerage statements)
• Forms 1099-S (real estate sales)
• Purchase records showing cost basis
• Documentation for adjustments (e.g., reinvested dividends or stock splits)
• Any Schedule K-1 forms if you had partnership or S corporation interests.

Step 2: Complete Form 8949 First

Form 8949 has:

• Part I: short-term transactions (held one year or less)
• Part II: long-term transactions (held more than one year)

Enter details for each transaction: description, dates, proceeds, cost basis, and adjustments. Calculate gain or loss per item.

Step 3: Transfer Totals to Schedule D, Part I

After completing Form 8949 Part I, transfer totals to Schedule D Part I.
Add short-term gains from other forms (e.g., Form 4684 or 6252) on lines 4–5, and subtract short-term capital loss carryovers on line 6.
Line 7 shows your net short-term capital gain or loss.

Step 4: Complete Schedule D, Part II

Transfer Form 8949 Part II totals to Part II.
Add long-term gains (line 11), capital gain distributions (line 13), and subtract long-term loss carryovers (line 14).
Line 15 shows your net long-term capital gain or loss.

Step 5: Complete Part III (Summary)

Combine short-term and long-term results on line 16.
If you have a gain, enter it on Form 1040 line 13 and use the Qualified Dividends and Capital Gain Tax Worksheet or Schedule D Tax Worksheet to calculate the correct tax rate.
If you have a loss, you can deduct up to $3,000 (or $1,500 if MFS), carrying any excess forward to 2014.

Step 6: Calculate Special Gains (If Applicable)

If you have collectibles gains (28%) or unrecaptured Section 1250 gain from depreciated real estate, complete the specific worksheets in the Schedule D instructions.

Common Mistakes and How to Avoid Them

Mistake #1: Forgetting Form 8949

Many filers skip Form 8949.
✅ Fix: Always complete it first unless your transactions qualify for the direct entry shortcut.

Mistake #2: Mixing Up Short-Term and Long-Term

Incorrectly classifying assets changes your tax rate.
✅ Fix: Use acquisition and sale dates to determine holding period (more than 365 days = long-term).

Mistake #3: Using Incorrect Cost Basis

Ignoring adjustments like reinvested dividends or commissions inflates gains.
✅ Fix: Verify your broker’s cost basis and maintain accurate records.

Mistake #4: Ignoring Wash Sale Rules

Claiming disallowed losses leads to IRS notices.
✅ Fix: Track purchases and sales within 30 days before and after loss sales.

Mistake #5: Not Reporting Losses

Losses reduce taxable income and can carry forward.
✅ Fix: Report all transactions, even those showing losses.

Mistake #6: Using the Wrong Tax Worksheet

Using the wrong worksheet results in overpaying.
✅ Fix: Use the Qualified Dividends and Capital Gain Tax Worksheet (or Schedule D worksheet for special gains).

What Happens After You File

IRS Matching

The IRS matches your Schedule D data with Forms 1099-B and 1099-S from brokers and financial institutions.
If differences appear, you may get a CP2000 notice—not an audit, but a request to explain or correct the discrepancy.

Refund or Payment

• If losses reduce taxable income → larger refund or less tax due.
• If gains increase taxable income → potential balance due.
  E-filed refunds typically arrived within 21 days; paper returns took 6–8 weeks.

Capital Loss Carryforward

If your losses exceed gains by more than $3,000, you carry the rest to 2014 using the Capital Loss Carryover Worksheet in the instructions.

Audit Possibilities

Red flags include:

• Large losses with poor documentation
• Missing transactions
• Overstated cost basis

The IRS has three years to audit (six if underreporting exceeds 25%).

State Tax Impact

Your Schedule D affects your state return since most states start with federal AGI.
However, some states treat capital gains differently—check your 2013 state filing rules.

FAQs

Q1: Do I need to file Schedule D if I only received capital gain distributions from mutual funds?

Not necessarily. If you didn’t sell any shares, report capital gain distributions directly on Form 1040, line 13.
If you sold shares or had other capital transactions, file Schedule D.

Q2: What if my broker reported the wrong cost basis on Form 1099-B?

Enter the correct basis on Form 8949 column (e), use code “B” in column (f), and report the adjustment in column (g).
Keep proof of the correct basis.

Q3: Can I deduct the loss from selling personal property like a car or furniture?

No. Losses from personal-use property aren’t deductible, though gains are taxable.
If reported on a 1099-S, include it on Form 8949 with code “L” for nondeductible loss.

Q4: I forgot to report a stock sale. What should I do?

File Form 1040-X with corrected Schedule D and Form 8949 as soon as possible.
If tax is owed, pay immediately to limit interest; if it was a loss, you may qualify for a refund.

Q5: How do I know if I need the Schedule D Tax Worksheet?

Use it if both lines 15 and 16 of Schedule D show gains and if line 18 (28% gain) or line 19 (Section 1250 gain) has an amount.
Otherwise, use the simpler Qualified Dividends and Capital Gain Worksheet.

Q6: What are the 2013 capital gains tax rates?

• Short-term: taxed as ordinary income (10%–39.6%)
• Long-term:
  • 0% for 10%/15% brackets
  • 15% for 25%–35% brackets
  • 20% for 39.6% bracket

Q7: Can I still file my 2013 Schedule D in 2025?

If you’re owed a refund—no, the refund claim period expired April 15, 2017.
If you owe taxes, you should still file immediately to stop further penalties and interest.

Additional Resources

• IRS Schedule D (Form 1040) 2013
• IRS Schedule D Instructions 2013
• IRS Publication 550: Investment Income and Expenses
• IRS Publication 544: Sales and Other Dispositions of Assets

Note: This guide reflects 2013 tax law and is for informational purposes only. For personalized advice, consult a tax professional.