What this line means
The total short-term gains and losses from assets reported on Form 8949 with Box A checked — meaning your broker reported the cost basis to the IRS. These are assets you held for one year or less before selling. The amounts come directly from Form 8949 Part I where you checked Box A.
Does this apply to you?
- You sold stocks, ETFs, or mutual funds through a brokerage account and held them for one year or less
- You received a 1099-B from your broker showing short-term sales with basis reported to the IRS
- You sold cryptocurrency through a major exchange that reported cost basis on your 1099-B
- You exercised and sold stock options within a year of the grant date
Easy to overlook
Wash sale adjustments already on the 1099-B Your broker reports wash sale disallowed losses directly on the 1099-B. These adjustments are already baked into the numbers on your 1099-B, but many filers manually adjust again on Form 8949, effectively double-counting the wash sale. If your broker handled the wash sale, the 1099-B basis is already adjusted. 1 IRS Schedule D instructions — Line 1a
Multiple 1099-Bs from different brokers If you have accounts at Fidelity, Schwab, and Robinhood, you get three separate 1099-Bs. Each one needs its own set of Form 8949 entries. Filers who only enter one broker’s 1099-B will get a CP2000 notice for the unreported sales from the others. 2 CP2000 pattern — unreported brokerage sales
Watch out for this
Entering the total proceeds from your 1099-B without also entering the cost basis. The IRS receives both numbers from your broker. If you report only proceeds, the IRS treats your entire sale as profit because there is no basis to offset it. This generates a tax bill far higher than what you actually owe.
Footnotes
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IRS Schedule D (Form 1040) Instructions, Line 1a. https://www.irs.gov/instructions/i1040sd ↩
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IRS CP2000 Notice, Brokerage Sales Matching. https://www.irs.gov/individuals/understanding-your-cp2000-notice ↩