Form 8949: How to report capital gains and losses on your 2026 US tax return

Form 8949 is the IRS form used to report sales and other dispositions of capital assets – stocks, bonds, cryptocurrency, real estate, and foreign investments.

For tax year 2025 (filed in 2026), many taxpayers who sold an investment will need Form 8949, but some transactions can be reported directly on Schedule D or on a separate statement in limited cases.

What is Form 8949, and why does it matter for your taxes?

You file Form 8949 when you sell a capital asset and need to report the result on your federal return. The form sorts each sale into short-term (held one year or less) and long-term (held more than one year), and the totals carry to Schedule D lines 1b, 2, 3, 8b, 9, or 10 for tax year 2025.

Form 8949 is the IRS's master ledger for every capital asset sale you report on your US tax return.

The form covers reportable sales and exchanges of capital assets, including transactions reported on Form 1099-B or Form 1099-DA and other dispositions not reported elsewhere, such as real estate sales outside the primary-residence exclusion or any inherited or gifted asset you later sell.

Its purpose is to reconcile each transaction's proceeds, cost basis, holding period, and any adjustments before the totals roll up to Schedule D.

Form 8949 at a glance – official title, where it's filed, and how its parts and codes are organized.

 

For US expats, selling foreign investments, foreign real estate, or cryptocurrency through a foreign exchange does not remove the filing requirement. The IRS taxes US citizens and green card holders on worldwide income. What can change is the bottom line – the foreign tax credit and certain treaty provisions may reduce or eliminate US tax owed on those gains.

Read more about how investment gains are taxed when you live outside the US in our guide to capital gains for expats.

Who needs to file Form 8949?

Many taxpayers who sold capital assets in 2025 will need Form 8949, but broker-reported transactions with basis reported to the IRS and no adjustments may be summarized directly on Schedule D when the IRS exception applies. US expats are subject to the same rules.

Knowing when Form 8949 is required depends on how the transaction was reported and whether any adjustments must be made.

The filing rules require Form 8949 for capital asset sales and exchanges that are not reported elsewhere or that need adjustments, and the cost basis must be reconciled against what your broker reported.

If you received a 1099-B, sold cryptocurrency, or disposed of any investment in 2025, you almost certainly need to file Form 8949.

You generally need to file the form if any of the following describes your year:

• You received a Form 1099-B from a US broker.
• You sold cryptocurrency or NFTs, whether or not a 1099-DA was issued.
• You sold foreign stocks or bonds through a foreign brokerage that did not issue a 1099-B.
• You sold a second home or other real property that is reportable on Form 8949; rental property sales may instead require Form 4797 depending on how the property was used.
• You had wash sale adjustments during the year.
• You sold inherited assets, even shortly after the date of death.

 

For more on reporting crypto specifically, read our walkthrough on how brokerage crypto trades show up on a US return.

Form 8949 vs. Schedule D – understanding the relationship

Form 8949 and Schedule D work together. The detail form is where you itemize each individual sale and apply any adjustments. Schedule D summarizes the totals: net short-term flows to Part I, net long-term flows to Part II. You cannot complete the summary correctly without working through the detail form first.

Think of Form 8949 as the detailed worksheet and Schedule D as the summary page – you cannot correctly complete Schedule D without first completing Form 8949.

The two forms have distinct roles, and a side-by-side view makes the division of labor clear.

Form 8949 captures the line-by-line detail; Schedule D rolls those lines into the net result.

 

The transfer points are specific. Totals from Form 8949 to Schedule D move as follows:

Schedule D line 1b pulls from Part I Box A or G, line 2 from Box B or H, line 3 from Box C or I, and lines 8b, 9, and 10 from Part II Boxes D or J, E or K, and F or L.

The one IRS shortcut

There is a narrow exception where the detail form can be skipped. If every broker-reported transaction is reported with Box A, Box D, Box G, or Box J checked, basis was reported to the IRS, and no adjustment is needed, you can enter totals directly on Schedule D and skip the detail form for those transactions.

 

For a related expat scenario, read more about selling a primary residence abroad and how the §121 exclusion interacts with Schedule D.

Form 8949 instructions – a step-by-step breakdown

Completing the form means entering each sale on a separate line across eight columns: description, dates acquired and sold, proceeds, cost basis, adjustment codes, adjustment amount, and gain or loss.

For tax year 2025, the instructions add digital-asset reporting boxes: G, H, I for short-term transactions and J, K, L for long-term transactions.

Filling out Form 8949 correctly means entering the adjustment code that matches the transaction and the reason for the adjustment.

The eight columns

The mechanics are easier to follow once you take the columns one at a time. Here is how to fill out Form 8949 column by column. The blank Form 8949 PDF follows the same layout.

1. Column (a) – Description of property. Use a clear short identifier: "100 sh. AAPL," "0.5 BTC," "10 acres of land – Portugal."
2. Column (b) – Date acquired. Use MM/DD/YYYY. Enter "Various" if the lot was built up over multiple dates.
3. Column (c) – Date sold or disposed of. Same format.
4. Column (d) – Proceeds. The amount received from the sale – from 1099-B Box 1d when one was issued.
5. Column (e) – Cost or other basis. Original purchase price plus commissions and acquisition costs.
6. Column (f) – Code(s). A single letter or letter combination from the IRS adjustment codes list (covered next).
7. Column (g) – Adjustment amount. Positive or negative, in dollars, matching the code in column (f).
8. Column (h) – Gain or loss. Computed as (d) minus (e), plus or minus (g).

The six checkbox categories

Beyond the columns, each Part of the form has six checkbox categories that tell the IRS how the transaction was originally reported. Part I uses A/B/C/G/H/I, and Part II uses D/E/F/J/K/L, signaling whether the basis was reported, not reported, or whether no 1099-B was issued at all.

A separate page is required for each checkbox category. The 1099-B section below covers the boxes in detail.

 

For crypto-specific cost basis questions, our bitcoin taxes FAQ covers FIFO, specific identification, and the wallet-by-wallet rule under Rev. Proc. 2024-28.

Form 8949 adjustment codes explained

IRS Form 8949 uses single-letter codes in column (f) to explain why your reported figures differ from your 1099-B. Over a dozen codes exist. The ones most commonly used by individual filers and expats are W, B, E, and M.

Getting the adjustment code wrong is one of the top reasons Form 8949 filers receive IRS CP2000 notices – always match the code to the specific reason for your basis difference.

Most readers will only ever use a handful of codes, and recognizing the right one quickly saves both time and tax. The complete list of adjustment codes sits in the IRS Form 8949 instructions.

The adjustment codes below cover common situations, but the 2025 Form 8949 instructions contain the full and authoritative list – always verify before filing.

 

For US expats, the key issue is whether you received a broker statement. Use the no-statement boxes only when no Form 1099-B or Form 1099-DA (or substitute statement) was issued. Use Code B only when the basis shown on the statement is incorrect; if the basis was not reported, use Boxes B/H or E/K.

TFX client scenario

An American living in Germany who sells shares through a German broker with no Form 1099-B or 1099-DA issued reports the sale under Box C (or I) (short-term) or Box F (or L) (long-term).

If a broker statement was issued but the basis shown is incorrect, use Box A (short-term) or Box D (long-term) and enter Code B in column (f); if the basis was not reported, use Box B/H or E/K instead. Column (e) is the purchase price converted to USD using a consistent exchange-rate method, supported by trade confirmations.

For sales involving restricted stock units, read more about when Code O typically applies and how RSU vest-versus-sale timing affects the cost basis figure.

Short-term vs. long-term capital gains on Form 8949

The form separates transactions by holding period. Part I covers short-term sales – assets held one year or less, taxed at ordinary income rates up to 37%.

Part II covers long-term sales – assets held more than one year, taxed at preferential rates of 0%, 15%, or 20% under the long-term capital gains rules for tax year 2025.

Holding an investment for just one day past the one-year mark can drop your tax rate from as high as 37% to a maximum of 20% – making holding-period tracking on Form 8949 one of the most valuable tax actions you can take.

2025 long-term capital gains brackets

The 2025 thresholds were set by IRS Rev. Proc. 2024-40 and apply to returns filed in 2026.

Your 2025 long-term capital gains rate depends on filing status and taxable income – the rate is capped at 0%, 15%, or 20% depending on your bracket.

 

A separate 3.8% Net Investment Income Tax stacks on top once MAGI exceeds $250,000 for married filing jointly or qualifying surviving spouse, $125,000 for married filing separately, or $200,000 for single or head of household. Those NIIT thresholds are statutory and not indexed for inflation.

The six checkbox categories per Part

Each Part of the form has six checkbox categories that determine which page a transaction goes on. They map to how (or whether) the sale was reported on a 1099-B.

• Box A, D, G, or J – basis reported to IRS.
• Box B, E, H, or K – basis not reported.
• Box C, F, I, or L – transaction not reported on any 1099-B at all (the typical scenario for foreign brokers).

A separate page is required per checkbox category. Mixing Box A and Box B transactions on the same page is the most common formatting error we see in client returns.

 

Read more about holding-period mechanics for Bitcoin and other digital assets held by US expats.

Form 8949 and 1099-B – how they work together

Form 1099-B is used for many brokered securities sales, and Form 1099-DA is used for digital-asset broker transactions. Form 8949 is where you reconcile those proceeds with your cost basis and any adjustments. An accurate broker statement means a clean transfer. A mismatch means an adjustment code is required.

Your broker statement (Form 1099-B or Form 1099-DA) is your starting point, but Form 8949 is where you correct errors, claim wash sale losses, and report sales your broker never knew about.

The Form 8949 vs. 1099-B mapping comes down to three scenarios:

1. 1099-B basis is reported to the IRS and is correct. Use Box A (short-term) or Box D (long-term). No adjustment code, no entry in columns (f) or (g).
2. 1099-B basis is reported to the IRS but is incorrect. Use Box A or D, enter Code E in column (f), and put the correction in column (g).
3. If the basis was not reported to the IRS on a broker statement, use Box B (or H) (short-term) or Box E (or K) (long-term). If no broker statement was issued at all, use Box C (or I) (short-term) or Box F (or L) (long-term) instead. Use Code B only when the basis shown on the statement is incorrect.

For US expats, most foreign brokerages (UK, German, Australian, Israeli, and so on) do not issue Form 1099-B or 1099-DA. If you did not receive such a statement, report the sale in the no-statement box for the relevant holding period and use your own records for basis.

 

If your broker issued you a CP2100 or CP2100A notice flagging mismatched TIN data, read more about what those notices mean and how to clean up backup withholding errors.

How to report cryptocurrency sales on Form 8949

Most taxable cryptocurrency sales, swaps, and exchanges are reported on Form 8949, unless the IRS instructions allow summary reporting or the broker provides the required 1099-DA information and no adjustment is needed.

For tax year 2025, the IRS requires every taxpayer to answer the digital asset question on Form 1040 and to report each transaction – including crypto-to-crypto trades – using the same eight columns as any other capital asset sale.

Swapping Bitcoin for Ethereum is a taxable event just like selling a stock – both must be reported on Form 8949 with proceeds equal to the fair market value at the time of the trade.

Step by step

The mechanics of reporting a digital asset sale mirror those for a stock sale, with a few extra steps for basis and exchange rate. Here is how to fill out Form 8949 for cryptocurrency:

1. Determine cost basis per unit. FIFO (first in, first out) is the IRS default. Specific identification is allowed if documented contemporaneously. Rev. Proc. 2024-28 sets out safe-harbor rules for digital-asset basis tracking; consult the guidance directly before applying any specific identification method.
2. Determine proceeds in USD. Fair market value in USD at the time of sale or swap.
3. Calculate the holding period. From the date you acquired the coin to the date you disposed of it.
4. Pick the correct box. For 2025 digital-asset transactions, use boxes G, H, or I for short-term transactions and J, K, or L for long-term transactions.
5. Enter the adjustment code if needed. Use Code B only when the basis shown on a broker statement is incorrect; if basis was not reported, use the applicable not-reported box (B/H for short-term, E/K for long-term).

Common crypto events at a glance

Not every digital asset event is a taxable disposition, and the line between taxable and non-taxable is where most filers slip up.

Some crypto moves are taxable events that belong on Form 8949; others – like moving coins between your own wallets – are not.

 

Beginning with transactions on or after Jan. 1, 2025, brokers must report digital-asset gross proceeds on Form 1099-DA. Basis reporting applies to certain covered-security transactions after 2025, including digital assets acquired from and held with the same broker on or after Jan. 1, 2026.

The IRS digital asset reporting hub maintains current guidance and transition notices.

Form 8949 for US expats – special considerations

US citizens and green card holders living abroad must report all worldwide capital gains on Form 8949 regardless of where the asset is held or where the sale takes place.

Expats face additional friction: foreign currency conversion, no 1099-B from foreign brokers, foreign tax credit coordination, and potential treaty positions.

As a US expat, selling shares through your local broker in London, Singapore, or Tel Aviv does not exempt you from reporting that sale on Form 8949 – the IRS taxes your worldwide income.

Currency conversion

Reporting in USD is non-negotiable. All proceeds and cost basis must be reported in USD using a reasonable exchange-rate method that you apply consistently. The IRS publishes yearly average exchange rates as one reference point.

No 1099-B from foreign brokers

Most foreign brokerages do not issue Form 1099-B or Form 1099-DA. If you did not receive such a statement, use the no-statement box for the relevant holding period – Box C (or I) (short-term) or Box F (or L) (long-term).

Code B applies only when the basis shown on a broker statement is incorrect; if the basis was not reported, use Boxes B/H or E/K. Document basis from your own broker statements and trade confirmations.

Foreign tax credit

Foreign tax paid on the same gain can usually be claimed as a credit, not as a deduction. Capital gains taxed by a foreign government may be offset by the foreign tax credit on Form 1116. The Foreign Earned Income Exclusion (FEIE) – the up-to-$130,000 (2025) exclusion for wages earned abroad – does not apply to capital gains.

PFIC issues

Foreign-listed funds carry a separate, heavier reporting regime that bypasses Form 8949 entirely. Certain foreign mutual funds and other foreign corporations may be PFICs; PFIC shareholders generally report them on Form 8621 instead of Form 8949, and carry their own punitive tax regime if no election is made.

FBAR and FATCA

Reporting the gain on the form does not satisfy the separate account disclosure rules. If your foreign brokerage and bank accounts together exceed $10,000 in aggregate at any point during the year, an FBAR (FinCEN Form 114) is required. Form 8938 may also apply at higher thresholds. These are separate filings from the capital gains form.

TFX client scenario

An American living in London who sold shares held in an Individual Savings Account (ISA) was surprised to learn that although the ISA is tax-free under UK law, US tax treatment depends on the underlying income and account facts and may differ from the UK treatment. FBAR may also apply if the aggregate foreign-account threshold is met.

For coordination questions on FBAR involving a non-US spouse, read more about when your spouse's accounts have to appear on your FBAR.

Wash sale rules and how they affect Form 8949

The wash sale rule under IRC §1091 disallows a capital loss when you sell a security at a loss and acquire the same or substantially identical security within 30 days before or after the sale. Disallowed wash sale losses are reported on Form 8949 using Code W in column (f).

A wash sale doesn't eliminate your loss forever – it defers it by adding the disallowed amount to the cost basis of the replacement shares.

The mechanics

The rule is mechanical once you know the four moving pieces:

1. The window is 61 days total – 30 days before the sale, the day of sale, and 30 days after.
2. The disallowed loss goes into column (g) as a positive number, which reduces your reported loss (or increases your reported gain) by that amount.
3. The disallowed amount is added to the basis of the replacement shares, preserving the loss until those new shares are sold.
4. Code W is entered in column (f).

TFX client scenario

A concrete number makes the column (g) adjustment easier to see. Based on a common TFX client scenario, a client sold 200 shares of a US-listed technology ETF on November 10, 2025 at a $4,000 loss, then bought the same ETF again on November 25, 2025 – 15 days later.

• The $4,000 loss is disallowed.
• Column (g) shows +$4,000.
• Column (h) shows $0.
• The replacement shares' basis increases by $4,000, so the deferred loss is recovered whenever those shares are eventually sold.

 

Crypto is currently outside §1091

The wash sale framework also has a gap that matters for crypto holders. IRC §1091 does not currently apply to cryptocurrency because the IRS classifies virtual currency as property rather than as stock or securities.

As of tax year 2025, IRC §1091 applies to stock and securities, while the IRS generally treats virtual currency as property for federal tax purposes. Taxpayers should monitor future legislative or regulatory changes that could affect digital-asset loss rules.

Inherited and gifted assets – reporting on Form 8949

Inherited assets and gifted assets reach the form through different basis rules. Inherited assets generally receive a stepped-up basis equal to fair market value on the date of death.

Gifted assets carry over the donor's adjusted basis, with a special rule for loss situations. The IRS overview of gift and estate taxes covers the broader framework.

Inheriting appreciated assets is one of the few tax windfalls the IRS still allows – your basis steps up to the date-of-death fair market value, potentially eliminating years of embedded capital gains.

Inherited assets

Inherited assets carry favorable rules on both basis and holding period:

• Basis generally equals the fair market value at the date of death (or the alternate valuation date, if elected), subject to any applicable consistency-basis reporting rules.
• The holding period is automatically long-term regardless of how long the heir actually held the asset before selling.
• Report on Form 8949 Part II under Box D, E, or F, depending on whether the basis was reported to the IRS.

Gifted assets

Gifts work differently, and the rules cut both ways depending on whether the sale is a gain or a loss:

• Basis is generally the donor's adjusted basis (carryover basis).
• For loss purposes, the basis is the lower of the donor's adjusted basis or the FMV at the time of gift.
• The holding period includes the donor's holding period.

Foreign inherited assets

The stepped-up basis rules still apply to assets inherited abroad, but currency conversion is added to the mix:

• The step-up applies even when the decedent was a non-US person, and the asset is foreign.
• Convert FMV at the date of death to USD using the exchange rate on that date.
• Foreign income taxes imposed on the same foreign-source gain may be eligible for the foreign tax credit on Form 1116, subject to the Form 1116 rules and limitations.

NOTE! If the estate was large enough to require Form 706 (US Estate Tax Return), the executor may have issued Form 8971 and Schedule A showing the basis assigned to each beneficiary's inherited assets. Use that figure in column (e) – it is the IRS-blessed number.

 

For broader treatment of how the US estate tax system interacts with expats and non-citizen spouses, read more about estate taxes for expatriates.

Example of a completed Form 8949

A walkthrough makes the columns concrete. The following example shows three short-term transactions and one long-term transaction for tax year 2025. The official Form 8949 instructions PDF covers further edge cases such as inherited lots, multiple acquisition dates, and securities received as compensation.

A correctly completed Form 8949 tells a complete story: what was sold, when, for how much, what it cost, and why the numbers differ – leaving no room for IRS misinterpretation.

Form 8949 example filled out – Part I (short-term)

Part I captures the three short-term transactions the client closed during the year.

Three short-term transactions filled out exactly as they would appear in Part I.

 

Part II (long-term)

Part II captures the single long-term holding the client sold during the year.

One long-term transaction filled out as it would appear in Part II.

Reading each row

Each row in the example carries a small lesson worth pulling out:

• Row 1 (AAPL). A standard short-term sale through a US broker. Basis was reported correctly on the 1099-B. No code, no adjustment. Taxed at ordinary income rates.
• Row 2 (BTC). Bitcoin sold through a foreign exchange, held about six months. No 1099-DA or substitute statement was issued, so the transaction is reported under Box I (no-statement, short-term). No adjustment code is required in column (f). The full $20,000 gain is short-term.
• Row 3 (XYZ ETF). Sold at a $2,400 loss, then repurchased within 30 days – a wash sale. Code W in column (f), +$2,400 positive adjustment in column (g), gain/loss zeroed out. The $2,400 is added to the basis of the replacement ETF shares.
• Part II row (MSFT). Held over three years, so long-term. Basis reported on the 1099-B. The $36,000 gain is taxed at the long-term rate that applies to the client's total taxable income.

This is a clean example. Real client returns often include 20 to 200 lines, and the formatting rules – one transaction per line, one Part per checkbox category – apply to all of them.

If you are worried about errors triggering an audit notice, read more about the most common ways the IRS fines and penalizes taxpayers.

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How the foreign tax credit interacts with Form 8949

If you paid capital gains tax to a foreign government on the same gains reported on Form 8949, you may be able to claim the foreign tax credit on Form 1116 to avoid double taxation. The Foreign Earned Income Exclusion does not apply to investment income or capital gains.

The foreign tax credit is often the most powerful tool an expat has to reduce or eliminate US tax on capital gains – but it must be claimed correctly on Form 1116, not on Form 8949 itself.

Five mechanics worth knowing

The FTC has its own rulebook, and a handful of mechanics matter most for capital gains:

1. Capital gains are passive income for FTC purposes. They sit in the passive-category basket on Form 1116.
2. The FTC is limited to your US tax liability on that income. It cannot generate a refund beyond US tax owed.
3. Excess FTC may be carried back one year and forward up to ten years.
4. Some tax treaties contain specific capital gains provisions – the US–Germany treaty and the US–UK treaty, for example – that may shift taxing rights for certain gains.
5. A treaty position is claimed on Form 8833 (Treaty-Based Return Position Disclosure), not on Form 8949.

NOTE! Even when a treaty benefit reduces or eliminates US tax on a capital gain, the underlying transaction is still reported on Form 8949. The treaty position sits on Form 8833 and any applicable basket on Form 1116. Skipping the line-item report and only filing the treaty disclosure is a frequent cause of IRS correspondence.

Common mistakes to avoid on Form 8949

The most common errors include omitting cryptocurrency transactions, using the wrong checkbox category, failing to convert foreign currency proceeds to USD, and mishandling wash sales. The IRS may issue a CP2000 notice when third-party information returns do not match the return you filed.

These seven errors come up again and again in client returns we review and correct:

1. Wrong checkbox. Mixing Box A and Box B transactions on the same page. Each checkbox category needs its own page.
2. Blank column (f) when an adjustment exists. The IRS sees a basis mismatch with no explanation, which is the trigger for an automated notice.
3. Omitting crypto-to-crypto trades. Each swap is a taxable event. No 1099 was issued, but the obligation is still yours.
4. Failing to convert foreign proceeds to USD. Reporting amounts in GBP, EUR, or AUD is a rejection-level error. All figures on the form are USD.
5. Reporting a $0 basis on inherited assets. Stepped-up basis to FMV at date of death is the correct figure, not zero.
6. Netting gains and losses before reporting. Each transaction goes on its own line. Netting happens on Schedule D, not on the detail form.
7. Missing wash sale adjustments. Selling and rebuying within 30 days without entering Code W and the +adjustment in column (g) is one of the easiest mistakes for the IRS to spot.

 

Form 8949 errors are the top trigger for IRS notices to expats.

See expat tax packages

Form 8949 filing deadlines and extension options for expats

For tax year 2025, the standard filing deadline is April 15, 2026. US expats living outside the US and Puerto Rico on April 15 receive an automatic two-month extension to June 15, 2026.

A timely Form 4868 gives you until October 15, 2026 to file. It extends time to file, not time to pay.

Expats get more time to file – but the tax payment deadline is still April 15, 2026, regardless of your extension status, and interest accrues on unpaid balances from that date.

Deadlines at a glance

Knowing which deadline applies to your situation is the first step in any extension plan.

Tax year 2025 deadlines for domestic and expat filers, including FBAR.

 

Form 2350 is a separate, more specialized extension – used only when an expat needs additional time specifically to satisfy the physical presence test or bona fide residence test for the Foreign Earned Income Exclusion. It is not a general filing extension.

NOTE! Filing an extension for your Form 1040 automatically extends Form 8949 and Schedule D, since both are attachments to the same return. There is no separate extension request for the detail forms.

Read more about expat tax extension options.

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