U. S. Business Income Tax Return

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2025

Instructions for Schedule D
(Form 1065)
Capital Gains and Losses
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments
For the latest information about developments related to
Schedule D (Form 1065) and its instructions, such as
legislation enacted after they were published, go to
IRS.gov/Form1065.
New codes to use for reporting digital asset transactions. Codes G, H, I, J, K, and L were added to
Schedule D (Form 1065), lines 1b, 2, 3, 8b, 9, and 10, to
include the reporting of digital asset transactions. See
Form 1099-DA, Digital Asset Proceeds From Broker
Transactions, and Form 8949, Sales and Other
Dispositions Of Capital Assets, and their instructions for
additional information regarding digital assets.

General Instructions
Purpose of Schedule

Use Schedule D (Form 1065) to report the following.
• The total capital gains and losses from transactions
reported on Form 8949.
• Certain transactions the partnership doesn't have to
report on Form 8949.
• Capital gains from installment sales from Form 6252,
Installment Sale Income.
• Capital gains and losses from Form 8824, Like-Kind
Exchanges (and section 1043 conflict-of-interest sales).
• Partnership's share of net capital gains and losses,
including specially allocated capital gains and losses,
from partnerships, estates, and trusts.
• Capital gain distributions.
Note: For more information, see Pub. 544, Sales and
Other Dispositions of Assets, and the Instructions for Form
8949.

Other Forms the Partnership May
Have To File

Use Form 8949 to report the sale or exchange of a capital
asset (defined later) not reported on another form or
schedule and to report the income deferral or exclusion of
capital gains. See the Instructions for Form 8949.
Complete all necessary pages of Form 8949 before you
complete line 1b, 2, 3, 8b, 9, or 10 of Schedule D. See
Lines 1a and 8a, later, for more information about when to
use Form 8949.

Sep 30, 2025

Use Form 4797, Sales of Business Property, to report
the following.
• Sales or exchanges of property used in a trade or
business.
• Sales or exchanges of depreciable or amortizable
property.
• Sales or other dispositions of securities or commodities
held in connection with a trading business, if the
partnership made a mark-to-market election (see
Mark-to-market accounting method in the Instructions for
Form 1065).
• Involuntary conversions (other than from casualties or
thefts).
• The disposition of noncapital assets (other than
inventory or property held primarily for sale to customers
in the ordinary course of a trade or business).
• Election to defer a qualified section 1231 gain invested
in a qualified opportunity fund (QOF).
Use Form 6781, Gains and Losses From Section 1256
Contracts and Straddles, to report gains and losses from
section 1256 contracts and straddles. If there are limited
partners, see section 1256(e)(4) for the limitation on
losses from hedging transactions.
Use Form 8997, Initial and Annual Statement of
Qualified Opportunity Fund (QOF) Investments, if you held
a qualified investment in a QOF at any time during the
year. See the Form 8997 instructions.

What Are Capital Assets?

Each item of property the partnership held (whether or not
connected with its trade or business) is a capital asset
except the following.
• Stock in trade or other property included in inventory or
held mainly for sale to customers.
• Accounts or notes receivable acquired in the ordinary
course of the trade or business for services rendered or
from the sale of stock in trade or other property held
mainly for sale to customers.
• Depreciable or real property used in the trade or
business, even if it is fully depreciated.
• Certain copyrights; literary, musical, or artistic
compositions; letters or memoranda; or similar property.
See section 1221(a)(3).
• Certain patents, inventions, models, or designs
(whether or not patented); secret formulas or processes;
or similar property.
• U.S. Government publications, including the
Congressional Record, that the partnership received from

Instructions for Schedule D (Form 1065) (2025) Catalog Number 51610S
Department of the Treasury Internal Revenue Service www.irs.gov

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What’s New

Use Form 4684, Casualties and Thefts, to report
involuntary conversions of property due to casualty or
theft.

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the government, other than by purchase at the normal
sales price, or that the partnership got from another
taxpayer who had received it in a similar way, if the
partnership's basis is determined by reference to the
previous owner.
• Certain commodities derivative financial instruments
held by a dealer. See section 1221(a)(6).
• Certain hedging transactions entered into in the normal
course of the trade or business. See section 1221(a)(7).
• Supplies regularly used in the trade or business.

Short- or Long-Term Gain or Loss

Report short-term gains or losses in Part I. Report
long-term gains or losses in Part II. The holding period for
short-term capital gains and losses is generally 1 year or
less. The holding period for long-term capital gains and
losses is generally more than 1 year. However, an
exception applies for certain sales of applicable
partnership interests. See Transactions with respect to
applicable partnership interests under Items for Special
Treatment below.

Items for Special Treatment

• Transactions with respect to applicable partnership
interests. The long-term holding period for gains and
losses with respect to applicable partnership interests is
more than 3 years. If the holding period is 3 years or less,
gains and losses with respect to applicable partnership
interests are treated as short term. An applicable
partnership interest is any interest in a partnership that,
directly or indirectly, is transferred to (or is held by) the
taxpayer in connection with the performance of substantial
services by the taxpayer, or any other related person, in
any applicable trade or business. See section 1061 and
Pub. 541, Partnerships, for details.
• Transactions by a securities dealer. See sections 475
and 1236; and Rev. Rul. 97-39, 1997-39 I.R.B. 4.
• Bonds and other debt instruments. See Pub. 550,
Investment Income and Expenses.
• Gain on disposition of market discount bonds. In
general, a capital gain upon the disposition of a market
discount bond is treated as interest income to the extent
of accrued market discount as of the date of disposition.
See sections 1276 through 1278 and Pub. 550 for more
information on market discount. See the Instructions for
Form 8949 for detailed information about how to report the
disposition of a market discount bond.
• Contingent payment debt instruments. Any gain
recognized on the sale, exchange, or retirement of a
contingent payment debt instrument subject to the
noncontingent bond method is generally treated as
interest income rather than as capital gain. In certain
situations, all or a portion of a loss recognized on the sale,
exchange, or retirement of a contingent payment debt
instrument subject to the noncontingent bond method may
be treated as an ordinary loss rather than as a capital loss.
See Regulations section 1.1275-4(b) and Pub. 1212 for
more information on contingent payment debt instruments
subject to the noncontingent bond method. See the
Instructions for Form 8949 for detailed information about
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Instructions for Schedule D (Form 1065) 2025

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For more information about holding periods, see the
Instructions for Form 8949.

how to report the disposition of a contingent payment debt
instrument.
• Gain on certain short-term federal, state, and municipal
obligations (other than tax-exempt obligations). If a
short-term governmental obligation (other than a
tax-exempt obligation) that is a capital asset is acquired at
an acquisition discount, a portion of any gain realized is
treated as ordinary income and any remaining balance as
a short-term capital gain. See section 1271.
• Certain real estate subdivided for sale that may be
considered a capital asset. See section 1237.
• Gain on the sale of depreciable property to a
more-than-50%-owned entity, or to a trust in which the
partnership is a beneficiary, is treated as ordinary gain.
See section 1239.
• Liquidating distributions from a corporation. See Pub.
550 for details.
• Gain on the sale or exchange of stock in certain foreign
corporations. See section 1248.
• Gain or loss on options to buy or sell, including closing
transactions. See Pub. 550 for details.
• Gain or loss from a short sale of property. See Pub. 550
for details.
• Transfer of property to a political organization if the fair
market value (FMV) of the property exceeds the
partnership's adjusted basis in such property. See section
84.
• Any loss on the disposition of converted wetland or
highly erodible cropland that is first used for farming after
March 1, 1986, is reported as a long-term capital loss on
Form 8949/Schedule D, but any gain on such a disposition
is reported as ordinary gain on Form 4797. See section
1257 for details.
• Transfer of partnership assets and liabilities to a newly
formed corporation in exchange for all of its stock. See
Rev. Rul. 84-111, 1984-2 C.B. 88.
• Disposition of foreign investment in a U.S. real property
interest. See section 897.
• Any loss from a sale or exchange of property between
the partnership and certain related persons isn’t allowed,
except for distributions in a complete liquidation of a
corporation. See sections 267 and 707(b) for details.
• Any loss from securities that are capital assets that
become worthless during the year is treated as a loss from
the sale or exchange of a capital asset on the last day of
the tax year.
• Nonrecognition of gain on sale of stock to an employee
stock ownership plan (ESOP) or an eligible cooperative.
See section 1042 and Temporary Regulations section
1.1042-1T for rules under which a taxpayer may elect not
to recognize gain from the sale of certain stock to an
ESOP or an eligible cooperative. Under section 703(b),
the partnership is the appropriate entity to make the 1042
election.
• A nonbusiness bad debt must be treated as a
short-term capital loss and can be deducted only in the
year the debt becomes totally worthless. See Pub. 550 for
more details.
• Any loss from a wash sale of stock or securities
(including contracts or options to acquire or sell stock or
securities) cannot be deducted unless the partnership is a
dealer in stock or securities and the loss was sustained in
a transaction made in the ordinary course of the

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If the partnership wants to elect out of the installment
method for installment gain that isn’t specially allocated
among the partners, it must report the full amount of the
gain on Form 8949 on a timely filed return (including
extensions) for the year of the sale.
If the partnership wants to elect out of the installment
method for installment gain that is specially allocated
among the partners, it must do the following on a timely
filed return (including extensions).
1. For a short-term capital gain, report the full amount
of the gain on Schedule K, line 8 or 11.
For a long-term capital gain, report the full amount of
the gain on Schedule K, line 9a or 11. Report the
collectibles gain (28% rate gain) on Schedule K, line 9b.
2. Enter each partner's share of the full amount of the
gain in box 8 or 9a of Schedule K-1, or in box 11 using
code I, whichever applies. Report the collectibles gain
(28% rate gain) in box 9b of Schedule K-1.
If the partnership filed its original return on time without
making the election, it may make the election on an
amended return filed no later than 6 months after the due
date of the return (excluding extensions). Enter “Filed
pursuant to section 301.9100-2” at the top of the amended
return.
• A sale or other disposition of an interest in a partnership
owning unrealized receivables or inventory items may
result in ordinary gain or loss. See Pub. 541 for more
details.
• Gain from certain constructive ownership transactions.
Gain in excess of the net underlying long-term gain the
partnership would have recognized if it had held a
financial asset directly during the term of a derivative
contract must be treated as ordinary income. See section
1260 for details.
• Gain from the sale of collectibles. Report any
collectibles gain (28% rate gain) (loss) included on lines
8a through 14 on line 9b of Schedule K (and each
partner's share in box 9b of Schedule K-1). A collectibles
gain (28% rate gain) (loss) is any long-term gain or
Instructions for Schedule D (Form 1065) 2025

deductible long-term loss from the sale or exchange of a
collectible that is a capital asset.
Collectibles include works of art, rugs, antiques, metals
(such as gold, silver, and platinum bullion), gems, stamps,
coins, alcoholic beverages, and certain other tangible
property.
Report any 28% gain or loss from a sale or exchange of
a collectible on Form 8949, Part II (with the appropriate
box checked). See the Instructions for Form 8949.
Also include gain (but not loss) from the sale or
exchange of an interest in a partnership or trust held more
than 1 year and attributable to unrealized appreciation of
collectibles. For details, see Regulations section 1.1(h)-1.
Also, attach the statement required under Regulations
section 1.1(h)-1(e).
Special rules for traders in securities. Traders in
securities are engaged in the business of buying and
selling securities for their own account. To be engaged in
business as a trader in securities:
• The partnership must seek to profit from daily market
movements in the prices of securities and not from
dividends, interest, or capital appreciation;
• The partnership's trading activity must be substantial;
and
• The partnership must carry on the activity with
continuity and regularity.
The following facts and circumstances should be
considered in determining if a partnership's activity is a
business.
• Typical holding periods for securities bought and sold.
• The frequency and dollar amount of the partnership's
trades during the year.
• The extent to which the partners pursue the activity to
produce income for a livelihood.
• The amount of time devoted to the activity.
Like an investor, a trader must generally report each
sale of securities (taking into account commissions and
any other costs of acquiring or disposing of the securities)
on Form 8949 unless one of the exceptions described in
the Instructions for Form 8949 applies. However, if a trader
made the mark-to-market election (see Mark-to-market
accounting method in the Instructions for Form 1065),
each transaction is reported in Part II of Form 4797
instead of Form 8949.
Regardless of whether a trader reports its gains and
losses on Form 8949 or Form 4797, the gain or loss from
the disposition of securities isn’t taken into account when
figuring net earnings from self-employment on Schedules
K and K-1. See section 1402(i) for an exception that
applies to section 1256 contracts.
The limitation on investment interest expense that
applies to investors doesn't apply to interest paid or
incurred in a trading business. A trader reports interest
expense and other expenses (excluding commissions and
other costs of acquiring or disposing of securities) from a
trading business on page 1 of Form 1065.
A trader may also hold securities for investment. The
rules for investors will generally apply to those securities.
Allocate interest and other expenses between the
partnership's trading business and its investment
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partnership's trade or business. A wash sale occurs if the
partnership acquires (by purchase or exchange), or has a
contract or option to acquire, substantially identical stock
or securities within 30 days before or after the date of the
sale or exchange. See section 1091 for more information.
Report a wash sale transaction on Form 8949, Part I or II
(with the appropriate box checked), depending on how
long the partnership owned the stock or securities. Enter
“W” in column (f) and enter as a positive number in
column (g) the amount of the loss not allowed. Complete
all remaining columns. See the Instructions for Form 8949.
• Gain from installment sales. If the partnership sold
property at a gain and it will receive a payment in a tax
year after the year of sale, it must generally report the sale
on the installment method unless it elects not to. However,
the installment method may not be used to report sales of
stock or securities traded on an established securities
market. Use Form 6252 to report the sale on the
installment method. Also use Form 6252 to report any
payment received during the tax year from a sale made in
an earlier year that was reported on the installment
method.

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Constructive sale treatment for certain appreciated
positions. Generally, the partnership must recognize
gain (but not loss) on the date it enters into a constructive
sale of any appreciated position in stock, a partnership
interest, or certain debt instruments as if the position were
disposed of at FMV on that date.
The partnership is treated as making a constructive
sale of an appreciated position when it (or a related
person, in some cases) does one of the following.
• Enters into a short sale of the same or substantially
identical property (that is, a “short sale against the box”).
• Enters into an offsetting notional principal contract
relating to the same or substantially identical property.
• Enters into a futures or forward contract to deliver the
same or substantially identical property.
• Acquires the same or substantially identical property (if
the appreciated position is a short sale, an offsetting
notional principal contract, or a futures or forward
contract).
Exception. Generally, constructive sale treatment
doesn't apply if:
• The partnership closed the transaction before the end
of the 30th day after the end of the tax year in which it was
entered into,
• The partnership held the appreciated position to which
the transaction relates throughout the 60-day period
starting on the date the transaction was closed, and
• At no time during that 60-day period was the
partnership's risk of loss reduced by holding certain other
positions.
For details and other exceptions to these rules, see
Pub. 550.
Rollover of gain from qualified stock. If the
partnership sold qualified small business stock (defined
below) it held for more than 6 months, it may postpone
gain if it purchased other qualified small business stock
during the 60-day period that began on the date of the
sale. The partnership must recognize gain to the extent
the sale proceeds exceed the cost of the replacement
stock. Reduce the basis of the replacement stock by any
postponed gain.
If the partnership chooses to postpone gain, report the
sale on Form 8949, Part I or II (with the appropriate box
checked), as it would be reported if the election was not
made. Then enter “R” in column (f). Enter the amount of
the postponed gain as a negative number (in
parentheses) in column (g). See the Instructions for Form
8949.
Attach a statement to Form 1065 that (a) identifies the
replacement qualified small business stock, (b) shows the
computation of the adjustment to the partnership's basis
in the replacement stock for the amount of any postponed
gain under section 1045, and (c) shows the dates on
which the replacement stock was acquired by the
partnership.
Caution: The partnership must also separately state
the amount of the gain rolled over on qualified stock under
section 1045 on Form 1065, Schedule K, line 11. Each
4

partner must determine if they qualify for the rollover at the
partner level or if they want to opt out of the section 1045
election. Also, the partnership must separately state on
that line any gain that would qualify for the section 1045
rollover at the partner level instead of the partnership level
(because a partner was entitled to purchase replacement
stock) and any gain on qualified stock that could qualify
for an exclusion under section 1202.
To be qualified small business stock, the stock must
meet all of the following tests.
• It must be stock in a C corporation (that is, not S
corporation stock).
• It must have been originally issued after August 10,
1993.
• As of the date the stock was issued, the corporation
was a qualified small business. A qualified small business
is a domestic C corporation with total gross assets of $75
million ($50 million if the stock was issued on or before
July 4, 2025) or less (a) at all times after August 9, 1993,
and before the stock was issued; and (b) immediately
after the stock was issued. Gross assets include those of
any predecessor of the corporation. All corporations that
are members of the same parent-subsidiary controlled
group are treated as one corporation.
• The partnership must have acquired the stock at its
original issue (either directly or through an underwriter),
either in exchange for money or other property or as pay
for services (other than as an underwriter) to the
corporation. In certain cases, the partnership may meet
the test if it acquired the stock from another person who
met this test (such as by gift or at death) or through a
conversion or exchange of qualified small business stock
by the holder.
• During substantially all the time the partnership held the
stock:
1. The corporation was a C corporation;
2. At least 80% of the value of the corporation's assets
were used in the active conduct of one or more qualified
businesses (defined below); and
3. The corporation was not a foreign corporation,
domestic international sales corporation (DISC), former
DISC, corporation that has made (or that has a subsidiary
that has made) a section 936 election before March 23,
2018, regulated investment company (RIC), real estate
investment trust (REIT), real estate mortgage investment
conduit (REMIC), financial asset securitization investment
trust (FASIT), or cooperative.
Note: A specialized small business investment company
(SSBIC) is treated as having met test 2 above.
A qualified business is any business other than the
following.
• One involving services performed in the field of health,
law, engineering, architecture, accounting, actuarial
science, performing arts, consulting, athletics, financial
services, or brokerage services.
• One whose principal asset is the reputation or skill of
one or more employees.
• Any banking, insurance, financing, leasing, investing, or
similar business.
• Any farming business (including the raising or
harvesting of trees).
Instructions for Schedule D (Form 1065) 2025

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securities. Investment interest expense is reported on
line 13c of Schedule K and in box 13 of Schedule K-1
using code H.

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Exclusion of gain from qualified community assets.
If the partnership sold or exchanged a qualified
community asset acquired after 2001 and before 2010,
that it held for more than 5 years, it can exclude any
qualified capital gain. The exclusion applies to an interest
in, or property of, certain qualified community assets.
Qualified community asset. A qualified community
asset is any of the following.
• Qualified community stock.
• Qualified community partnership interest.
• Qualified community business property.
Qualified capital gain. Qualified capital gain is any
gain recognized on the sale or exchange of a qualified
community asset but doesn't include any of the following.
• Gain attributable to periods after December 31, 2014.
• Gain treated as ordinary income under section 1245.
• Section 1250 gain figured as if section 1250 applied to
all depreciation rather than the additional depreciation.
• Gain attributable to real property, or an intangible asset,
that isn’t an integral part of a renewal community
business.
• Gain from a related-party transaction. See Sales and
Exchanges Between Related Persons in chapter 2 of Pub.
544.
• Gain on the sale of an interest in a partnership or stock
of an S corporation, which is a renewal community
business during substantially all of the period you held
such interest or stock, attributable to real property or an
intangible asset which isn’t an integral part of the renewal
community business.
See section 1400F (as in effect before its repeal on
March 23, 2018) for more details and special rules.
How to report. If applicable, report the sale or
exchange on Form 8949, Part II (with the appropriate box
checked), as it would be reported if the exclusion was not
taken. Enter “X” in column (f) and enter the amount of the
exclusion as a negative number (in parentheses) in
column (g). See the Instructions for Form 8949.
Deferral of gain invested in a qualified opportunity
fund (QOF). If the partnership realized gain from an
actual, or deemed, sale or exchange with an unrelated
person and during the 180-day period beginning on the
date the gain was realized, invested an amount of the gain
in a QOF, the partnership may be able to elect to
temporarily defer part or all of the gain that would
otherwise be included in income. If the partnership makes
the election, the gain included in income is only to the
extent, if any, the amount of realized gain exceeds the
aggregate amount invested in a QOF during the 180-day
period beginning on the date gain is realized. The
partnership may also be able to permanently exclude the
gain from the sale or exchange of any investment in a
QOF if the investment is held for at least 10 years. For
more information, see section 1400Z-2.
Qualified opportunity fund (QOF). A QOF is any
investment vehicle that is organized as either a
corporation or partnership for the purpose of investing in
Instructions for Schedule D (Form 1065) 2025

eligible property that is located in a Qualified Opportunity
Zone.
Eligible gain. Gain that is eligible to be deferred if it is
invested in a QOF includes any amount treated as a
capital gain for federal income tax purposes.
How to report. Report the eligible gain on Schedule D
(Form 1065) as it would otherwise be reported if the
partnership were not making the election. See the
Instructions for Form 8949 for how to report the deferral.
You will need to attach Form 8997 annually until you
dispose of the QOF investment. For more information, see
Form 8997 and its instructions.
Exclusion of gain from DC Zone assets. If the
partnership sold or exchanged a District of Columbia
Enterprise Zone (DC Zone) asset that it held for more than
5 years, it may be able to exclude the qualified capital
gain. The DC Zone asset must have been acquired after
1997, and before 2012, to qualify as an asset for which the
partnership may be able to take the exclusion. The sale or
exchange of DC Zone capital assets reported on Form
8949 and Schedule D includes the following.
• Stock in a domestic corporation that was a DC Zone
business.
• Interest in a partnership that was a DC Zone business.
Report the sale or exchange of tangible property used in
the partnership's DC Zone business on Form 4797.
Gains not qualified for exclusion. The following
gains don’t qualify for the exclusion of gain from DC Zone
assets.
• Gain attributable to periods after 2016.
• Gain on the sale of an interest in a partnership or stock
of an S corporation, which is a DC Zone business during
substantially all of the period you held such interest or
stock attributable to real property or an intangible asset
which isn’t an integral part of the DC Zone business.
• Gain from a related-party transaction. See Sales and
Exchanges Between Related Persons in chapter 2 of Pub.
544.
• Gain treated as ordinary income under section 1245.
• Section 1250 gain figured as if section 1250 applied to
all depreciation rather than the additional depreciation.
• Gain attributable to real property, or an intangible asset,
that isn’t an integral part of a DC Zone business.
See section 1400B (as in effect before its repeal on
March 23, 2018) for more details on DC Zone assets and
special rules.
How to report. If applicable, report the sale or
exchange of a DC Zone asset on Form 8949, Part II (with
the appropriate box checked), as it would be reported if
the exclusion was not taken. Enter “X” in column (f) and
enter the amount of the exclusion as a negative number
(in parentheses) in column (g). See the Instructions for
Form 8949.
Undistributed long-term gains from a regulated investment company (RIC) or real estate investment
trust (REIT). Report the partnership's share of long-term
gains from Form 2439, Notice to Shareholder of
Undistributed Long-Term Capital Gains, on Form 8949,
Part II (with box F checked). Enter “From Form 2439” in
column (a). Enter the gain in column (h). Leave all other
columns blank. See the Instructions for Form 8949.
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• Any business involving the production of products for
which percentage depletion can be claimed.
• Any business of operating a hotel, motel, restaurant, or
similar business.

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NAV method for certain money market funds. Report
capital gain or loss determined under the net asset value
(NAV) method with respect to shares in a NAV money
market fund on Form 8949, Part I, with box C or box 1
checked. Enter the name of each fund followed by “(NAV)”
in column (a). Enter the net gain or loss in column (h).
Leave all other columns blank. See the Instructions for
Form 8949.

Specific Instructions

Complete all necessary pages of Form 8949 before
completing line 1b, 2, 3, 8b, 9, or 10 of Schedule D.

Rounding Off to Whole Dollars

Cents can be rounded to whole dollars on Schedule D. If
cents are rounded to whole dollars, all amounts must be
rounded. To round, drop cent amounts under 50 and
increase cent amounts over 49 to the next dollar. For
example, $1.49 becomes $1 and $1.50 becomes $2.

Lines 1a and 8a—Transactions Not Reported on
Form 8949

The partnership can report on line 1a (for short-term
transactions) or line 8a (for long-term transactions) the
aggregate totals from any transactions (except sales of
collectibles) for which:
• The partnership received a Form 1099-B or Form
1099-DA (or substitute statement) that shows basis was
reported to the IRS and doesn't show any adjustment in
box 1f or 1g of Form 1099-B or box 1h or 1i of Form
1099-DA;
• The“Ordinary” checkbox in box 2 of Form 1099-B or
box 6 of Form 1099-DA (or substitute statement) isn’t
checked;
• The “QOF” checkbox in box 3 of Form 1099-B or box 3b
of Form 1099-DA (or substitute statement) isn’t checked;
and
• The partnership doesn't need to make any adjustments
to the basis or type of gain or loss (short term or long
term) reported on Form 1099-B or Form 1099-DA (or
substitute statement), or to its gain or loss.
See How To Complete Form 8949, Columns (f) and (g) in
the Instructions for Form 8949 for details about possible
adjustments to the partnership's gain or loss.

Example 2—basis not reported to the IRS. The
partnership received a Form 1099-B or Form 1099-DA
showing proceeds (in box 1d of Form 1099-B or box 1f of
Form 1099-DA) of $6,000 and cost or other basis (in
box 1e of Form 1099-B or box 1g of Form 1099-DA) of
$2,000. Box 12 of Form 1099-B or box 2 of Form 1099-DA
isn’t checked, meaning that basis wasn’t reported to the
IRS. Don’t report this transaction on line 1a or line 8a.
Instead, report the transaction on Form 8949. Complete
all necessary pages of Form 8949 before completing
line 1b, 2, 3, 8b, 9, or 10 of Schedule D.
Example 3—adjustment. The partnership received a
Form 1099-B or Form 1099-DA showing proceeds (in
box 1d of Form 1099-B or box 1f of Form 1099-DA) of
$6,000 and cost or other basis (in box 1e of Form 1099-B
or box 1g of Form 1099-DA) of $2,000. Box 12 of Form
1099-B or box 2 of Form 1099-DA is checked, meaning
that basis was reported to the IRS. However, the basis
shown in box 1e of Form 1099-B or box 1g of Form
1099-DA is incorrect. Don’t report this transaction on
line 1a or line 8a. Instead, report the transaction on Form
8949. See the instructions for columns (f), (g), and (h) of
Form 8949. Complete all necessary pages of Form 8949
before completing line 1b, 2, 3, 8b, 9, or 10 of Schedule D.

Lines 1b, 2, 3, 8b, 9, and 10, Column
(h)—Transactions Reported on Form 8949

Figure gain or loss on each line. First, subtract cost or
other basis (column (e)) from proceeds/sales price
(column (d)). Then, combine the result with any
adjustments in column (g). Enter the gain or loss in
column (h). Enter negative amounts in parentheses.
Example 1—gain. Column (d) is $6,000 and column
(e) is $2,000. Enter $4,000 in column (h).

If the partnership chooses to report these transactions
on lines 1a and 8a, don’t report them on Form 8949.

Example 2—loss. Column (d) is $6,000 and column
(e) is $8,000. Enter ($2,000) in column (h).

Figure gain or loss on each line. Subtract the cost or
other basis in column (e) from the proceeds (sales price)
in column (d). Enter the gain or loss in column (h). Enter
negative amounts in parentheses.

Example 3—adjustment. Column (d) is $6,000,
column (e) is $2,000, and column (g) is ($1,000). Enter
$3,000 ($6,000 − $2,000 − $1,000) in column (h).

Example 1—basis reported to the IRS. The
partnership received a Form 1099-B or Form 1099-DA
reporting the sale of stock or digital asset held for 3 years,
showing proceeds (in box 1d of Form 1099-B or box 1f of
Form 1099-DA) of $6,000 and cost or other basis (in
box 1e of Form 1099-B or box 1g of Form 1099-DA) of
$2,000. Box 12 of Form 1099-B or box 2 of Form 1099-DA
is checked, meaning that basis was reported to the IRS.
6

Lines 6 and 13—Capital Gains (Losses) From
Other Partnerships, Estates, and Trusts

See the Schedule K-1 or other information supplied to the
partnership by the other partnership, estate, or trust.

Line 14—Capital Gain Distributions

Enter on line 14 the total capital gain distributions paid to
the partnership during the year.
Instructions for Schedule D (Form 1065) 2025

DRAFT

DRAFT

If two or more amounts must be added to figure the
amount to enter on a line, include cents when adding the
amounts and round only the total.

The partnership doesn't need to make any adjustments to
the amounts reported on Form 1099-B or Form 1099-DA
or enter any codes. This was the partnership’s only 2025
transaction. Instead of reporting this transaction on Form
8949, the partnership can enter $6,000 in column (d) of
Schedule D, line 8a; $2,000 in column (e); and $4,000
($6,000) – $2,000) in column (h).
If the partnership had a second transaction that was the
same except that the proceeds were $5,000 and the basis
was $3,000, combine the two transactions. Enter $11,000
($6,000 + $5,000) in column (d) of Schedule D, line 8a;
$5,000 ($2,000 + $3,000) in column (e); and $6,000
($11,000 − $5,000) in column (h).