Which form is used to report capital gains and losses?

The correct form used to report capital gains and losses is Form 8949. This form is specifically designed for taxpayers to detail their capital transactions, including the sale of stocks, bonds, real estate, and other assets. It allows individuals to report the specific details of each transaction, such as the date acquired, date sold, proceeds, cost basis, and the resulting gain or loss.

Once the transactions are reported on Form 8949, the totals are then summarized and transferred to Schedule D, which is used to calculate the net capital gain or loss for the tax year. This process ensures that capital gains and losses are accurately reported and that taxpayers pay the correct amount of tax on their investment income.

In contrast, Form 1040 is the main tax return form for individuals but does not exclusively focus on capital gains and losses. Schedule A is used for itemizing deductions and does not pertain to capital gains. Form W-2 is the wage and tax statement provided by employers and relates to income earned from employment, not investment transactions.