topic Re: Schedule D and form 8949 in Get your taxes done using TurboTax

Schedule D and form 8949

RK DIY Taxes — Tue, 10 Mar 2026 06:08:55 GMT

I invested part of my 2020 401(k) retirement income in a mutual fund. I failed to correctly identify this in my 2020 form 1040 filing and the IRS tells me I need to complete Schedule D and Form 8949. How can I use TurboTax to generate these forms?

Re: Schedule D and form 8949

Anonymous_ — Fri, 16 Sep 2022 16:19:52 GMT

Did you file online? Can you log in to your account?

You can always download the forms from the IRS web site.

https://www.irs.gov/pub/irs-prior/f1040sd--2020.pdf

https://www.irs.gov/pub/irs-prior/f8949--2020.pdf

Re: Schedule D and form 8949

RK DIY Taxes — Fri, 16 Sep 2022 16:57:37 GMT

Yes, I did file electronically and I can login to my IRS account. I have downloaded the forms and instructions, but they are asking about the sale of property or stocks of which I did neither. I simply reinvested part of my 401(k) retirement income in a mutual fund.

Thanks for your reply.

Re: Schedule D and form 8949

Critter-3 — Fri, 16 Sep 2022 17:55:43 GMT

What happens inside a 401K is not reported on an income tax return. So do you have a broker's account outside of a retirement plan or IRA that you had sales in it ? If so the broker will issue you a 1099-B for the sales that is reported on the personal return on form 8949 and the Sch D.

Re: Schedule D and form 8949

VolvoGirl — Fri, 16 Sep 2022 18:10:45 GMT

And if you took a withdrawal from a 401K or IRA account and invested it in another account (not in another 401K or IRA) you would get a 1099R for the withdrawal. Did you report a 1099R on your return?

Why does the IRS think you had sales? Did you get a 1099B?

Re: Schedule D and form 8949

fanfare — Fri, 16 Sep 2022 23:37:29 GMT

you should write back to IRS that you had no investment activity to report on Schedule D.

But, if your Form 1040 has the box checked or a non-zero amount on Line 7, that's a horse of a different color.

Reply back for followup.

@RK DIY Taxes

Also, make sure you're really talking to the IRS.

Re: Schedule D and form 8949

RK DIY Taxes — Sat, 17 Sep 2022 15:12:21 GMT

My From 1040-SR has both a non-zero value in line 7 and the box is checked. I am fairly confident I am talking to the IRS; I was vetted by ID.me (requiring a video chat to complete) and login through www.irs.gov.

I'm not sure I like being in a corral with different colored horses! My situation must be fairly common; I invested part of my 401(k) retirement income (taxes already withheld) in a mutual fund, and the IRS feels I owe them taxes on it.

Thanks for your advice.

Re: Schedule D and form 8949

Critter-3 — Sat, 17 Sep 2022 15:22:23 GMT

Ok ... so did you take a distribution from the 401K and then use the money to invest in a non retirement account ? If so you DO owe taxes on the distribution no matter what you did with the cash.

Re: Schedule D and form 8949

RK DIY Taxes — Sat, 17 Sep 2022 15:26:44 GMT

Yes, I received a 1099-R and filed it with my return. The 1099-B section of my mutual fund is all zeros. Perhaps the IRS thinks I had sales because the value of my mutual fund increased - a rarity in 2020.

Thanks for your comments.

Re: Schedule D and form 8949

RK DIY Taxes — Sat, 17 Sep 2022 15:30:31 GMT

Even if the distribution from my 401(k) already had taxes withheld?

Re: Schedule D and form 8949

fanfare — Sat, 17 Sep 2022 16:15:17 GMT

See my answer here to another person who got that letter.

It has nothing to do with your 401k

https://ttlc.intuit.com/community/after-you-file/discussion/re-forms-to-submit-with-schedule-d/01/2771761#M673780

@RK DIY Taxes

Re: Schedule D and form 8949

RK DIY Taxes — Wed, 21 Sep 2022 14:52:20 GMT

I have completed Schedule D and Form 8949 and submitted them to the IRS. Thank you for your helpful advice and patience with me. If I had explained my situation more completely it may have avoided some of the rabbit holes.