Video instructions and help with filling out and completing 1041 Instructions Schedule D

Instructions and Help about 1041 Instructions Schedule D

I've created this video to help explain the completion of a form 8949 and a Schedule D first of all the form 8949 rolls up onto the Schedule D so that means we're going to have to complete the 8949 before we can complete the Schedule D so the first slide shows you the example facts you have some stock here that you are selling for $1000 and it has a cost basis of $10,000 using the formula you learned in Chapter one amount realized - adjusted basis equals your gain or loss that will tell you that this particular transaction has a $9,000 loss let's also assume that this is a short-term capital loss so that means we acquired the stock sometime within a year and we've sold it now the problem facts didn't give me the date acquired or the date sold so I can make those dates up so in column a you're going to describe what is happening here it was that we sold some green company stock I've already told you that I'm making up my dates you just need to make them up sometime in the year 2011 column E is our sales price while we sold it for $1,000 and column F is our cost we have a cost of $10,000 there is nothing more to complete on this form other than the totals so jump down to the bottom and row 2 just asks you to add up all of the lines above it so the total in column E is going to be a thousand and the total in column F is going to be 10,000 so now we can move over to our Schedule D you may have noticed on the previous form if not you can pause this and play it again that I checked box C so since I checked box C on the previous form I'm going to transfer the column totals into my schedule D and we already know this is a short-term capital loss so our total sales price here our total cost goes in column F and then column H tells us that we are calculating our gain or loss but we already know that's a $9,000 loss in this case now if it happened that we hadn't sold the stock but we had lost them or that we didn't get any money for them for whatever reason maybe they were stolen from us I don't know the only difference here now is that the sale price goes to zero our cost basis is still ten and then we would have a gain or a loss of ten thousand so returning back to the problem facts that we have in this example now if you look at line seven line seven asks us to add up our total short-term gain or loss well we have a total of $9,000 short-term loss we don't have any long-term capital gain or loss so we leave fifteen blank now when we go to the back side of the Schedule D line 16 tells us to come by in line 7 and 15 well we had a $9,000 loss on line seven and nothing on 15 so that yields a $9,000 loss on line 16 and then it tells us in line 16 if there's a loss skip lines 17 through 20 and go to 21 so now we jump all the way down to 21 and 21 says enter the smaller of the loss on 16 or $3,000 so we're entering 3,000 dollars in this case and then it also tells us to enter that on form 1040 line 13 so this schedule D rolls up on to our 1040 line 13 and the last thing you have to do is answer the question on row 22