Form 8949

If your organization or trust sold investments during the year, you may need to file IRS Form 8949. This form provides detailed reporting of capital asset transactions before totals are transferred to IRS Schedule D.

Whether you are reviewing form 8949 information, checking the latest form 8949 instructions 2025, or understanding how IRS Form 8949 and Schedule D work together, it’s important to know that this form ensures every sale is properly documented.

For exempt organizations and trusts, IRS tax Form 8949 is commonly required when:

• When capital gains become taxable under Unrelated Business Taxable Income reported on Form 990-T
• A split-interest trust reports investment transactions as part of its annual filing on Form 5227
• Brokerage 1099-B statements must be reconciled
• Adjustments to cost basis are necessary

In short, Form 8949 IRS reporting provides transaction-level transparency, while IRS Schedule D summarizes totals for final reporting.

What’s New in Form 8949?

Understanding the latest updates can help you report your transactions accurately. Here’s what you need to know:

How should you report digital asset transactions?

We explain the purpose and usage of each box in detail in the section below to help you select the correct option.

What is IRS Form 8949?

IRS tax Form 8949 is used to report detailed sales and exchanges of capital assets. Instead of listing only totals, the IRS requires each transaction to be disclosed separately unless it qualifies for summary reporting.

Capital Assets Reported on Form 8949

Capital assets generally include property held for investment or certain business-related purposes. Examples of such assets include:

• Stocks and bonds
• Real estate
• Cryptocurrency and digital assets
• Partnership interests
• Other investment assets

In addition to standard asset sales, Form 8949 is utilized to report transactions that require specific or special tax treatment, including the following:

• Capital losses, nondeductible losses, and losses from wash sales.
• Short sales
• Traders in securities reporting
• Gain or loss from options
• Installment sales
• Demutualization of life insurance companies
• Exclusion or rollover of gain from qualified small business (QSB) stock
• Other rollover transactions
• Deferral of gain invested in a Qualified Opportunity Fund (QOF)
• Special reporting situations for corporations, partnerships, estates, and trusts

These special situations do not change what a capital asset is - but they affect how the transaction is reported on IRS Form 8949.

Who must file IRS Form 8949?

You must file Form 8949 IRS if:

• You sold or exchanged a capital asset
• You received Form 1099-B
• You need to adjust cost basis
• Your brokerage did not report basis to the IRS
• Schedule D requires transaction detail

This applies to:

• Individuals
• Corporations
• Estates
• Trusts
• Tax-exempt organizations with taxable activity

Even exempt entities may need IRS Form 8949 and Schedule D when reporting taxable capital gains.

Why attach Form 8949 to Form 990-T?

Organizations filing IRS Form 990-T report Unrelated Business Taxable Income (UBTI). When capital gains are connected to unrelated trade or business activity, IRS tax Form 8949 may be required.

Common Situations

• Sale of property used in unrelated business
• Sale of partnership interest generating UBTI
• Disposition of unrelated business assets

The form 8949 instructions 2025 clarify that detailed reporting must occur before completing certain Schedule D totals.

Why attach Form 8949 to Form 5227?

Split-interest trusts filing IRS Form 5227 frequently report investment activity. Because these trusts often sell securities during the year, Form 8949 IRS reporting ensures each transaction is properly documented.

Why it matters

• Tracks short-term vs long-term gains
• Supports Schedule D calculations
• Ensures proper income tier classification
• Provides transparency for trust reporting

For many trusts, IRS Form 8949 and Schedule D are used together annually.

How to file Form 8949 with TaxZerone?

Part I - Short-Term

Short-Term Capital Gains and Losses

• A short-term capital gain or loss occurs when you sell or dispose of a capital asset that you held for one year or less. The holding period begins the day after you acquire the property and includes the day you sell or dispose of it.
• Short-term transactions must generally be reported in Part I of Form 8949. Each sale or exchange of a capital asset-such as stocks, bonds, or other investments- is listed here with details like the purchase date, sale date, proceeds, and cost basis.
• In some cases, you may not need to list each transaction on Form 8949. If the transaction meets certain IRS exceptions, it can be reported directly on line 1a of Schedule Dinstead.
• There are also special situations to keep in mind. For example, a non-business bad debt is treated as a short-term capital loss, even if the debt existed for more than one year.

1. Provide Organization Details - Choose the tax year for which you want to file Form 8949 return, and provide your organization’s details.
2. Preview Form 8949 - Attach 8949 form to report sales and exchanges of capital assets and preview the information provided in the return for accuracy before transmitting.
3. Transmit to the IRS - Submit IRS Form 8949 along with your 990-T return and receive IRS acceptance within a few hours.

With TaxZerone, you stay informed with instant updates on your return’s filing status, eliminating guesswork and anxiety. In addition, our excellent support team is always available to answer your questions and provide assistance throughout the filing process.

Even if the IRS rejects your return, our platform allows you to make necessary corrections and resubmit it for FREE!