If you’ve sold stocks, cryptocurrency, real estate, or some other capital asset, the chances are that you’ll need to report on IRS Form 8949. This report enables the IRS to track and verify your capital gains and losses, which bear a direct relationship to the amount of tax you pay—or the refund you receive.
Whether you’re a U.S. taxpayer living abroad or managing investments from multiple countries, understanding how to complete Form 8949 correctly is essential for staying compliant.
What Is IRS Form 8949?
Form 8949 is used by individual taxpayers, estates, and trusts to report:
- Sales and exchanges of capital assets
- Gains and losses from investment property
- Crypto and digital asset transactions
- Bartering or exchanges involving capital assets
- Inherited or gifted property sales
This form is completed in addition to Schedule D (Capital Gains and Losses) on your return (Form 1040). All the details have to be listed on Form 8949 prior to being totaled on Schedule D.
Who Is Required To File Form 8949?
You are required to file IRS Form 8949 if:
- You sold stocks, bonds, ETFs, or cryptocurrency
- You sold real estate or collectibles
- You received a 1099-B from a broker but your basis was not reported
- You sold foreign assets or investments
- Received Form 1099-K on electronic transactions of capital assets
Even if you’re a U.S. citizen residing abroad, you must report all foreign capital gains and losses on your U.S. return, including those in foreign investment accounts.
Section of Form 8949
The form consists of two major sections:
Part I – Short-Term Transactions
Completed for assets held for one year or less.
You’ll list:
- Description of the property
- Date acquired and date sold
- Proceeds and cost basis
- Adjustments (such as disallowed losses or wash sales)
- Gain or loss
Part II – Long-Term Transactions
Used for assets held over one year.
Same reporting fields used as in Part I, but the IRS applies a lower tax rate to long-term capital gains (based on your income level).
Understanding Columns and Codes
Each line on Form 8949 has boxes for:
Box A, B, or C (short-term) and D, E, or F (long-term) to report:
- A: 1099-B with cost basis reported to IRS
- B: 1099-B without cost basis
- C: No 1099-B received
Adjustments (Column G) might include:
- Wash sale loss disallowed
- Adjustment code (e.g., “W” for wash sale, “L” for loss disallowed)
Common Situations Where Form 8949 is Used
- You day-traded stock or crypto and had a consolidated 1099-B.
- You sold a vacation home that appreciated in value.
- You received inherited property and later sold it.
- You earned crypto from staking and later sold it.
- You converted foreign currency investments.
Filing Tips for Expats and International Investors
If you’re a U.S. citizen or green card holder living overseas, don’t assume you’re exempt. Even if the transaction happened in another country or involved non-U.S. assets, it must be reported to the IRS.
Key points:
- Use IRS-accepted exchange rates to exchange foreign proceeds to USD.
- Keep the records both in local currency and in USD.
- List each foreign sale or transaction individually—even if it was made via a non-U.S. broker.
Form 8949 vs. Schedule D
- Form 8949: Where each individual sale is listed in detail.
- Schedule D: Where totals are calculated and reported on your 1040.
Although your broker may issue you a 1099-B with totals, the IRS still requires Form 8949 if there are adjustments to transactions.
Frequently Asked Questions (FAQs)
Do I need to file Form 8949 if I only had a few small stock transactions?
Yes. Small capital gains or losses are still reported as long as they are comprised of the sale of capital assets.
What if I sold cryptocurrency and didn’t receive a 1099?
You still have to report the sale. The IRS requires self-reporting of all reportable crypto income, even if a 1099 was issued.
I’m an expat American citizen—am I required to file Form 8949?
Yes. American citizens and residents are required to report worldwide income, including the sales of capital assets, no matter where they reside.
Can I be waived from Form 8949 if my broker reports everything to the IRS already?
No. If there are any adjustments (such as wash sales or poor basis), you must report each sale on Form 8949, even if you received a complete 1099-B.
What if I failed to file Form 8949 in a previous year?
You may be required to file an amended return (Form 1040-X) to correct your previous return and avoid penalties or interest.
Are there exceptions for reporting losses?
You will still be required to report losses on Form 8949. However, you can deduct up to $3,000 of capital losses as an ordinary deduction each year (or $1,500 if you are married filing separately), and carry over the remainder.
Final Thoughts
Form 8949 also is among the most comprehensive of the IRS forms, and minor errors will cause an audit or delay refunds. When working with a group of transactions, foreign investments, or cryptocurrency, it’s worth getting ahead.
For expats, Form 8949 becomes overwhelming when coupled with international tax returns, foreign currency exchange rates, and broker reporting requirements.
If in doubt, find an expat tax advisor who specializes in U.S. tax law and investment taxation.
