Form 8949: Sales and Other Dispositions of Capital Assets

You use Form 8949 if you sold or exchanged a capital asset. For individuals that covers sales reported on a Form 1099-K, Form 1099-B, or Form 1099-DA, sales not reported on another form or schedule, nonbusiness bad debts, a security that became worthless, gains from involuntary conversions other than casualty or theft, and the election to defer capital gain invested in a qualified opportunity fund. Corporations, partnerships, estates, and trusts use the form too, each with their own list of transactions.

• Individuals: sales on Form 1099-K, Form 1099-B, or Form 1099-DA, nonbusiness bad debts, worthless securities, and electing out of the installment method
• Corporations and partnerships: sales not reported elsewhere, undistributed long-term capital gains from Form 2439, and their share of gain or loss from a partnership, estate, or trust
• Estates and trusts: sales not reported elsewhere, nonbusiness bad debts, worthless securities, and dispositions of interests in QOFs
• Filing jointly: use as many copies as you need, list your transactions together or separately, and put the totals from all forms on your Schedule D

The instructions set no separate due date for Form 8949. You file it with the Schedule D for the return you are filing, so it goes in when that return goes in. Fill out Form 8949 first, because Schedule D lines 1b, 2, 3, 8b, 9, and 10 pull their numbers from it. If you e-file and choose not to report each transaction on its own row in the electronic return, attach Form 8949 to Form 8453 or the right form in the Form 8453 series and mail it. You cannot attach a paper Form 8949 to Form 8453-FE.

Digital asset sales now have their own boxes. Short-term digital asset transactions go in box G, H, or I on Part I. Long-term ones go in box J, K, or L on Part II. Do not use box C for short-term digital assets or box F for long-term ones. A digital asset acquired after 2025 counts as a covered security, so your broker should show its basis.

• Boxes G, H, and I: short-term digital asset transactions on Part I
• Boxes J, K, and L: long-term digital asset transactions on Part II
• Farmland sold or exchanged to a qualified farmer after July 4, 2025: you can elect to pay the net income tax liability on the sale in four equal installments. See the instructions for Schedule 2 (Form 1040), Schedule 3 (Form 1040), and Form 1062.

Split your sales by how long you held the property. One year or less is generally short-term and goes on Part I. More than one year is generally long-term and goes on Part II. To count the holding period, start the day after you received the property and include the day you disposed of it. Check only one box on each part, and use a separate copy for each box that applies. Enter each transaction on its own row. Then total columns (d), (e), (g), and (h) on line 2 and carry those totals to Schedule D.

For most rows you leave columns (f) and (g) blank. You need them when a form you received is wrong, when you are excluding or postponing gain, when a loss is not deductible, and in some other situations. Put the code in column (f) and the dollar adjustment in column (g), with negative amounts in parentheses. If more than one code applies, list them in alphabetical order with no space or comma, like BOQ. You can round to whole dollars if you round every amount, so $1.49 becomes $1 and $1.50 becomes $2.

• Code B: the basis shown on your Form 1099-B or Form 1099-DA is wrong
• Code E: selling expenses, option premiums, or digital asset transaction costs are missing from the form you got
• Code H: you are excluding gain on the sale of your main home
• Code W: nondeductible wash sale loss
• Code Z: you are deferring gain by investing in a qualified opportunity fund
• Write INHERITED in column (b) for inherited property, or VARIOUS if you bought the block on several dates

A digital asset is any digital representation of value recorded on a cryptographically secured distributed ledger or similar technology. That includes convertible virtual currency, cryptocurrency, and non-fungible tokens. It is treated as property, so the same holding period rules apply. Your basis is what it cost to acquire it, including transaction fees, commissions, transfer taxes, and other acquisition costs. In column (a), give the full name or symbol of the asset, the exact units you sold or disposed of, and the sale transaction ID if you have it.

Two examples from the instructions show how this works. You buy one unit of digital asset A on June 1 for $1,000. Three years later you trade it for one unit of digital asset B worth $3,000, so you report a long-term capital gain of $2,000. In the second example a client pays you one unit of digital asset A worth $10,000 for legal services. You report $10,000 of self-employment income. Two months later you sell that unit for $12,000 and report a short-term capital gain of $2,000.

Exception 1 lets you skip the form for some transactions and enter totals straight on Schedule D line 1a for short-term or line 8a for long-term. It applies when your Form 1099-B or Form 1099-DA shows basis was reported to the IRS, shows no adjustments in the boxes listed in the instructions, has the Ordinary box unchecked, and you need no adjustment to the basis, the type of gain, or the gain itself. Sales of collectibles and QOF deferrals do not qualify.

Exception 2 lets you report transactions on an attached statement in a similar format to Parts I and II, then enter the combined totals on the form with code M in column (f). A separate provision lets certain corporations, partnerships, securities dealers, and nonprofits enter summary totals when they file Form 1120-S or Form 1065 or are exempt from receiving Form 1099-B or Form 1099-DA and must report more than five transactions for that part. Individuals rarely qualify for it.