Form 8949 and Schedule D: What Your 1099-B Data Means
Your broker sends you a 1099-B. The IRS wants Form 8949 and Schedule D. Here's how the data flows from one to the other.
The Chain: 1099-B to Form 8949 to Schedule D
Think of it as a pipeline:
- 1099-B — your broker reports every sale to you and the IRS
- Form 8949 — you list each transaction with proceeds, cost basis, and adjustments
- Schedule D — you summarize the totals from Form 8949
Schedule D is what actually gets attached to your tax return. Form 8949 is the supporting detail.
Form 8949: The Four Boxes
Form 8949 has two parts, each with different "boxes" depending on how the transaction was reported:
Part I — Short-Term (held 1 year or less)
- Box A: Basis reported to IRS (covered securities — most common)
- Box B: Basis NOT reported to IRS (noncovered securities)
- Box C: Form 1099-B not received
Part II — Long-Term (held more than 1 year)
- Box D: Basis reported to IRS (covered)
- Box E: Basis NOT reported to IRS (noncovered)
- Box F: Form 1099-B not received
How Each 1099-B Field Maps
| 1099-B Field | Form 8949 Column |
|---|---|
| Description of property | Column (a) |
| Date acquired | Column (b) |
| Date sold | Column (c) |
| Proceeds | Column (d) |
| Cost or other basis | Column (e) |
| Adjustments (wash sales) | Column (g) |
| Gain or loss | Column (h) |
Schedule D: The Summary
Schedule D takes the totals from each Form 8949 box:
- Line 1a: Total short-term from Box A
- Line 1b: Total short-term from Box B
- Line 8a: Total long-term from Box D
- Line 8b: Total long-term from Box E
The net short-term gain/loss and net long-term gain/loss are then combined for your total capital gain or loss.
Why This Matters for Tax Software
When you import a TXF file into TurboTax, each transaction is tagged with the correct code:
- Code 321 = Short-term (goes to Form 8949 Part I)
- Code 323 = Long-term (goes to Form 8949 Part II)
The tax software handles the Box A/B/D/E categorization automatically based on whether the cost basis was reported to the IRS.
The $3,000 Capital Loss Limit
If your total capital losses exceed your capital gains, you can deduct up to $3,000 of net capital loss against ordinary income ($1,500 if married filing separately). Losses beyond that carry forward to future years.
This is calculated on Schedule D, Lines 16 and 21. Getting your 1099-B data right is essential for this calculation.
Get It Right the First Time
Errors on Form 8949 trigger IRS matching notices (CP2000). The IRS receives your 1099-B data directly from your broker and compares it to what you report. Mismatches — even small ones — generate automated letters.
Using a clean conversion, whether CSV for your CPA or TXF for tax software, eliminates transcription errors and ensures your Form 8949 matches what the IRS already has on file.