What this line means
Line 4 is the totals row at the bottom of Part II. You add up every long-term transaction listed above it and enter the combined amounts for column (d) proceeds, column (e) cost or other basis, column (g) adjustments, and column (h) gain or loss. These four totals transfer directly to Schedule D Part II. 1
Which line on Schedule D receives the totals depends on which box you checked. Box D totals go to Schedule D line 8a. Box E totals go to line 8b. Box F totals go to line 8c. If you filed multiple copies of Form 8949 Part II with the same box checked, combine all line 4 totals from those copies before entering the result on Schedule D. 1
Does this apply to you?
- You entered one or more long-term transactions in Part II of Form 8949
- You need to transfer your long-term results to Schedule D
- You filed multiple copies of Form 8949 Part II and need to combine the totals before entering them on Schedule D
Easy to overlook
Long-term and short-term totals stay separate through Schedule D Your short-term totals from Form 8949 Part I go to Schedule D Part I, and your long-term totals from Part II go to Schedule D Part II. The IRS nets them separately before combining them on Schedule D line 16. Mixing short-term and long-term numbers on the wrong part of Schedule D produces an incorrect tax calculation because short-term gains are taxed at ordinary rates while long-term gains get preferential rates. 2 General filing pattern — netting short-term and long-term separately
Adjustment amounts in column (g) affect the totals If any transaction in Part II has a code in column (f) and an amount in column (g) — for wash sales, basis corrections, or other adjustments — those amounts must be included in the column (g) total on line 4. Leaving column (g) blank on the totals row when individual rows have adjustments produces incorrect numbers on Schedule D. 1 IRS Schedule D instructions — Transferring Form 8949 totals
Watch out for this
Netting short-term losses against long-term gains on Form 8949 itself. Form 8949 does not combine short-term and long-term results — that happens on Schedule D. Your Part I totals and Part II totals transfer to different sections of Schedule D and stay separate until Schedule D line 16 combines them. If you offset a $3,000 short-term loss against your long-term gains on Form 8949, you misstate both sections and lose the benefit of having the long-term gains taxed at the lower capital gains rates.
Footnotes
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IRS Schedule D (Form 1040) Instructions, How To Report on Schedule D. https://www.irs.gov/instructions/i1040sd ↩ ↩2 ↩3
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IRS Form 8949 Instructions, General Instructions. https://www.irs.gov/instructions/i8949 ↩