Schedule D (IRS) – Definition

Cite this article as:"Schedule D (IRS) – Definition," in The Business Professor, updated September 17, 2019, last accessed October 19, 2020, https://thebusinessprofessor.com/lesson/schedule-d-definition/.

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What is a Schedule D?

Schedule D is a form attached to the Individual Income Tax Return Form (1040) that individuals use to report their capital gains and losses for a particular year. In the United States, the Internal Revenue Service (IRS) mandates individuals to report gains and losses made on capital assets for every year, the report is made using the Schedule D form. Capital losses and gains made on capital assets such as bonds, stocks and properties are reported to the IRS using schedule D. When individuals who use capital assets for investment purposes make gains or losses, they are required to file a report.

A Little More on What is Schedule D

There are specific instructions that the schedule D form contains which individuals must pay attention to when filing their annual capital gains and losses with the IRS. For instance, individuals might be required to submit information from other tax forms when filing a Schedule D. The tax information that is required also varies depending on the tax situations of individuals. Below is a breakdown of other tax forms that might be required when filing a schedule D;

  • Form 8949 ( for taxpayers that sell their investments or homes)
  • Form 4797 ( for those that sell a business property)
  • Form 6252  ( for individuals with installment sale income)
  • Form 4648 (For people who have made losses due to casualty or theft loss)
  • Form 8824  (for taxpayers that make an exchange which is like-kind).

References for Schedule D

https://www.investopedia.com/terms/s/scheduled.asp

https://www.irs.gov/forms-pubs/about-schedule-d-form-1040

Academic Research on Schedule D

Response mode and bias analysis in the IRS‘individual taxpayer burden survey, Brick, M., Contos, G., Masken, K., & Nord, R. (2009, August). In 2009 Joint Statistical Meeting Proceedings. The IRS (Internal Revenue Service) makes a taxpayers survey to understand the individual taxpayers’ filing and prefiling burden better. As a sampling frame, it considered taxpayers filing the income tax return of 2007 in 2008. The response rate was overall 48 percent with roughly 39 percent responses through telephone, 28 percent through web and 33 percent through email. This study analyzes the differences by response mode in respondents with a specific interest in the ones who respond through the web since this mode -ate is unexpectedly high. The authors also discuss the no response bias and find ways to adjust it when the researcher has an interest in the estimates vector, not 1 point estimate only.

The anatomy of tax evasion, Klepper, S., & Nagin, D. (1989). Journal of Law, Economics, & Organization, 5(1), 1-24. There are 3 certain things in our life, taxes, death and unrelenting effort of mankind to evade these 2. In spite of a large historical background of taxpayers revolts and tax laws resistance, tax compliance emerges as a subject getting more attention. Researchers have provided empirical and theoretical assistance in basic propositions of compliance behaviour, i.e. penalties and detection risk discourage the noncompliance while higher rates of taxes encourage noncompliance. Detection risk measures affect the compliance, for example, an income fraction depending on information reporting, perceived detection risk, the audit rate or the problem in building an audit trail.

Accounting service-learning experiences and the IRS volunteer income tax assistance programme: A teaching note, Strupeck, C. D., & Whitten, D. (2004). Accounting Education, 13(1), 101-112. This article describes 2 service-learning practices in the United States academic accounting programs. The professional accounting institutions and the Campus Compact 2000 call for practices which bridge the gap in academic preparation, volunteerism and professional workplace. Moreover, employers tend to place importance on entry-level positions experience. The authors review the literature of service-learning generally and in accounting education. Then, they make a comparison of service-learning opportunities experiences of 2 United States universities utilizing VITA programs (Volunteer Income Tax Assistance). The authors discuss the positive outcomes with a few pitfalls and the educators’ concerns about service-learning.

SCHEDULE D., PART, TO, S. R. SCHEDULE D., PART. This paper explains the Schedule D part of an act for the better governance of Australian colonies, section 17 that an amount will be payable to the imperial parliament every year from the revenue funds collected from duties, taxes, imposts and rates levied in the South Australian colony after the Legislative Council was established under this act. Many such payments are to make for defraying the services expenses and the objectives mentioned in the Schedule D. It was added in section 18 that by law, the Legislative Council and the Governor can alter all or some of the sums mentioned in the Schedule.

Tax evasion and tax rates: An analysis of individual returns, Clotfelter, C. T. (1983). The review of economics and statistics, 363-373. This paper discusses tax rates and evasion and analyzes the individual returns. According to the IRS (Internal Revenue Service) report, in 1976, the unreported income was 75 to 100 billion US dollars or almost seven percent of reported income. Other studies show estimates even larger. The tax authorities are not only concerned about the current revenue loss from this tax evasion but also it fosters disappointment on taxes and to voluntary compliance, it is a serious threat. The American income tax (AIT) is based on it. The relation in tax evasion and tax rates is important because one can manipulate the latter for policy goals

Using archival data sources to conduct nonprofit accounting research, Feng, N. C., Ling, Q., Neely, D. G., & Roberts, A. A. (2014). Journal of Public Budgeting, Accounting & Financial Management, 26(3), 458-493. As more and more data is being available, nonprofit accounting research is steadily expanding. To spread the data sources awareness and make sure of the nonprofit research quality, the authors bring archival data sources under discussion available for nonprofit researchers, data problems and potential solutions to these issues. The authors aim to spread data sources awareness in the nonprofit area, raise production and maximize the nonprofit research quality.

Preparing for the New 2003 For 1040 Schedule D, Luscombe, M. A. (2003). Taxes, 81, 3. In 1997, the rates of capital gains changed last time. To accommodate all of these changes, the IRS was compelled to devise a very complex Schedule D. The rates of new mid-term were abandoned the following year. The complexity may create this year from lowering the rates of capital gains effective for purchases and sales on 6th May 2003 needing a Schedule D which can estimate the new and old rates of tax and tackle netting problems between the 2 rates sets. Further complexity creates from the dividends taxation at the rates of capital gains. Now, qualified dividends will come under Schedule D calculation.

THE INCOME TAX–SCHEDULE D., READER, A. C. (1861). The London review of politics, society, literature, art, and science, 3(66), 430-430. This research is about Schedule D of the income tax act. The author discusses its implications, effects, amendments and drawbacks. He has presented the views of different economic scholars and finally, he presents his suggestions as well.

Case VIII of Schedule D, Wheatcroft, G. S. A. (1963). BTR, 255. The new Case 8 of Schedule D will be brought forth for 1964 to 1965 and the following years. It has taken the place of Schedule A that is w.e.f 1964 to 1965 and modified for 1963 to 1964 substantially. The charge under Case 8 applies to the yearly gains or profits generated from rents and specific receipts from land in the UK, including ground annuals, rents, charges, feud duties and other yearly payments of such land. Other receipts generated to a person from estate ownership or right over or interest in this land or incorporeal heritable subject in the UK.

Income from Offices Which Are Parts of Professions-Schedule D or Schedule E, Kerridge, R. (1980). BTR, 233. Information Technology is possible, though it is certain that if English legislators and lawyers know more about economics’ dismal science they can define income for tax purposes. It will, of course, enable them to get rid of the scheduler system. The income tax schedules are working for two centuries, however, their main pattern has changed a bit. Some significant reasons for the schedules original division are not relevant now. The tax rate is much higher today as compared to the time when authorities introduced income tax but it is similar for all schedules. It changed as per the schedule in the ITAs (Income Tax Acts) of 1803, 1805, 1806 and 1842.

Repair or Renewal: A Reappraisal of the Schedule D Rules, Smith, P. F. (1982). BTR, 360. A sole trader or taxpayer whose leasehold or freehold property becomes out of repair will definitely think whether the remedial work cost is deductible. The taxpayer has to face difficulties which this paper highlights. For example, whether the claimed expenses are revenue or capital, in which the acquisition date of the chattels or the premises is relevant. Similarly, in decisions, the court’s’ interpretation is not always easily reconcilable. Another issue is related to a statutory ban on deductibility and its interrelation with the common law about what is a repair and what is not. The author states the suggestions for renewal or repair and the Schedule D rules reappraisal.

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