Capital Gains/Losses Entries to Schedule D and 8949

[syoung123]

Hello - I have a 2020 1099-B from a brokerage account that has almost 100 sales transaction lines.  They are either short term gain/loss showing basis reported to IRS (form 8949 Part I, box A), or long term gain/loss showing basis reported to IRS (form 8949, Part II, box D).  There is no adjustment/entry on column 1f and 1g on the 1099-B for each transaction line, and I don't plan to make any adjustments.  TurboTax indicates that if there are no adjustments/entries to the transactions, I can group all the short term gains/losses lines together into one total and enter it on Schedule D, Part I, line 1a; and group all the long term gains/losses together into one total and enter it on Part II, line 8a.  TurboTax also indicates that I don't have to prepare the Form 8949 at all (neither enter the transactions as one aggregate for short term with box A check, and one aggregate for long term with box D checked; nor enter each short term and long term transaction).  Is it correct that I can just prepare Schedule D and don't need to prepare Form 8949, since I don't have any adjustments on column 1f and 1g on the 1099-B, or in column f and g on the Form 8949?

Also when I selected the option to enter the totals directly to Schedule D, TurboTax shows a summary  of these two lines and says "with attachment" next to the lines.  I thought the instructions that I read said I only need to file Schedule D, and I don't need to attach a copy of the 1099-B (to show all the transactions), and I also don't need to prepare Form 8949.  Please advise what I should include.

[ThomasM125 · Accepted solution]

You are correct, that is what it says in the instructions to schedule D. If you just report your sales in lines 1(a) and 8(a), you don't need form 8949 and you don't need to attach a statement to explain those entries. 

You also need to make sure you comply with other stipulations as follows:

[Edited 3/2/21 1:57 PM PST]

@syoung123

[syoung123]

Hello, thank you for your reply.  The 1099B that I got is from Merrill Edge.  It is a tax reporting stmt that contains the 1099B line items, along with other 1099s such as 1099DIV and 1099INT.  The 1099B is just a listing of the transactions with a notation at the beginning of each sections of transaction such as "short term capital gains and losses - 1099B line 2 box 6 net proceeds, covered transactions-cost basis reported to IRS - For 8949, Part I, (A)".  There are no box 2 (Ordinary) and box 3 (QOF) shown on the 1099B section of the tax reporting stmt.  So is it still ok to just group all the lines and put them on Schedule D 1a and 8a, for short term and long term, respectively?

Also, for rounding the proceed, cost basis, and net gain/loss, to the nearest dollar,  if I round the total proceed and cost basis shown on the 1099B, then subtract the cost basis from the proceed, the calculated net gain/loss (by subtractng the cost from the proceed) is one dollar different from the rounded net gain/loss number.  Does it make any difference if I use the rounded net proceed and cost basis to calculate the net gain/loss, or should I adjust the total proceed or cost basis so the subtraction/calculation of the net gain/loss  would match with the rounded net gain/loss number?  For example:

Per the 1099B:

$1,000.52 (proceed) - $1,400.20 (cost basis) = $(399.68) loss

If I round the proceed and cost basis, and subtract the cost from proceed, the calculated net loss is: 

$1,001 - $1,400 = $(399), which is less than the rounded $399.68 of $400

Or should I adjust the proceed down to $1,000 so the calculated net gain/loss would match the rounded gain/loss:  

$1,000 (round down from 1,000.52 to 1,000) - $1,400 = $(400), which the calculated $400 net loss from subtraction would match the rounded $399.68 (to $400)

I am not sure how close the IRS would check and match the 1099B #s, and whether they would match to the net gain/loss number vs the proceed and cost basis, since the difference is due to rounding.  When I used TurboTax to import the detail line transactions, the total proceed and cost basis shown on Schedule D (line 1b for box A, and line 8b for box D), column d and column e, rounded by TurboTax, are a couple of dollars different from the total proceed and cost basis shown on the printed 1099B, if I round these numbers per the printed 1099B. 

[DianeW777]

Yes.  You can group the sales of long term and short term respectively. And you can round the transaction, $399.68 would round up to $400. The IRS is not going to be concerned about rounding over a couple of dollars.  There is absolutely no need for concern on rounding.

Once the summary entries are completed you must take the following actions. You can use your statement from your broker or your own statement depending on how you keep your records for sales.

If you are e-filing your tax return, and after the IRS has accepted your tax return, then, within three days, mail your statements (showing the breakdown of your summary totals) along with Form 8453 to: 

Internal Revenue Service

Attn: Shipping and Receiving, 0254 

Receipt and Control Branch 

Austin, TX 73344-0254

If you need a blank Form 8453, you can download this pdf, enter your address information and check the box for Form 8949 (this form is really just a cover sheet).

[syoung123]

Hello, thank you for the reply about the dollar rounding on Schedule D.  I have a follow-up question:

I am going to print the TurboTax return and file by paper via mail.  In my original question posted, I asked whether I needed to prepare the Form 8949, or include the 1099B broker statement with the tax return to mail.  There are close to 100 short term and long term capital gain/loss transactions.  On the 1099B, these transactions are in two groups: short term covered transactions-cost basis reported to IRS-Form 8949, Part I, (A); and long term covered transactions-cost basis reported to IRS-Form 8949, Part II, (D).  There are no adjustments shown in column 1(f) and 1(g) on the 1099B, and I don't have any adjustments to put into column (f) and (g) on the Form 8949.  The IRS instructions appear to indicate that if there are no adjustments on the 1099B, and if I don't need to make any adjustment to put into (f) and (g) on Form 8949, I can just put the group totals (short term for box A, and long term for box D), "proceed, cost basis, gain/loss" in Schedule D, Part I line 1(a) for the short term transactions, and in Part II line 8a for the long term transactions.  And I do not need to file Form 8949, or I don't  need to include the 1099B broker statement with the tax return.  An Employee Tax Expert, ThomasM125, replied to me that, it is correct that I can just use Schedule D, and there is no need to file Form 8949, or to include the 1099B with the tax return.  Your reply regarding my dollar rounding question appears to indicate that I need to include the 1099B broker statement with the tax return to mail?  Please clarify.  Thank you very much. 

[gloriah5200 · Accepted solution]

Yes, that is correct that you do not need to file the 8949 or the 1099-B if there are no adjustments to be made to the tax reporting document transactions listed on the 1099-B and all the basis' have already been reported to IRS.