Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Income — Capital Gain or Loss

Form 8949 and Schedule D

Capital Gain Distributions

Capital gain distributions, which are reported on Form 1099-DIV, occur when a mutual fund or other entity that owns a capital asset sells the asset and passes the gain on to its shareholders. The taxpayer should receive a document at year end.

If there are no capital gains from the sale of capital property, enter the Form 1099-DIV amount directly on Form 1040, line 13 and check the box next to the line indicating that Schedule D is not required.

Taxpayers who have received capital gain distributions only from mutual funds, and did not actually sell their shares of the mutual fund or any stock, generally do not need to use Schedule D, provided there is no other sale or disposition of capital property.

Tax software hint.

If the source documents (Form 1099-DIV and Form 1099-B) are recorded properly in the tax preparation programs, the numbers will be reported in the proper places. The amount from Form 1099-DIV, box 2a, will be entered on the Dividend Statement for Schedule B (along with the other information) and will automatically carry over to the capital gain distributions line in Schedule D, Part II.