Example #1 - Dividends, Short-Term Losses, Long-Term Gains

  • Schedule B - Dividends and Net Short-Term Capital Losses
  • Schedule D - Net Long -Term Capital Gains

STCG = Short-term capital gains
STCL = Short-term capital losses
LTCG = Long-term capital gains
LTCL = Long-term capital losses

Example illustrates:

  1. Schedule B short-term gain and loss are combined resulting in net short term loss;
  2. Schedule B net short term loss offsets Schedule B dividends up to maximum of $2,000;
  3. Unused Schedule B net short term loss after offsetting Schedule B dividends up to maximum of $2,000 offsets Schedule D net capital gains without limitation.
Ordinary dividends$2,300
STCG$900
STCL($5,600)
LTCG$3,700

Schedule B

Part 1.
Line 2, Total ordinary dividends$2,300
Line 4, Total interest and dividends$2,300
Line 7, Subtotal interest and dividends$2,300
Line 9, Subtotal interest and dividends after excess trade/business deduction$2,300

Part 2.
Line 10, STCG$900
Line 13, STCG subtotal$900
Line 15, STCG subtotal after excess trade/business deduction$900
Line 16, STCL($5,600)
Line 19, Combined STCL and STCG($4,700)
Line 20, STCL applied against interest and dividends maximum $2,000$2,000
Line 21, Available STCL after applying against interest and dividends. See instructions($2,700)
Line 22, STCL applied against LTCG. See instructions$2,700
Line 23, STCL available for carryover to 2013; combine Lines 21 and 22$0

Part 3.
Line 29, Subtotal interest and dividends from Line 9$2,300
Line 30, STCL applied against interest and dividends$2,000
Line 31, Subtotal interest and dividends after applying STCL. See instructions$300
Line 33, Adjusted interest and dividends after applying LTCL$300

Part 4.
Line 35, Adjusted interest, dividends and capital gains. Add Lines 33 and 34$300
Line 37, Adjusted interest and dividends after excess exemptions$300
Line 38, Taxable interest and dividends; also enter on Form 1, Line 20 or 1-NR/PY, Line 24$300
Line 40, Available STCL carryover in 2013. Enter amount from line 23. If line 23 was not completed, enter "0"$0

Schedule D
Line 1, LTCG$3,700
Line 9, Combined LTCG$3,700
Line 11, LTCG after applying differences. See instructions$3,700
Line 13, Subtotal LTCG after removing LTCG from collectibles and pre-1996 installment sales$3,700
Line 14, Capital losses applied against capital gains. See instructions$2,700
Line 15, Subtotal LTCG after applying capital losses against capital gains$1,000
Line 17, Subtotal LTCG after applying capital losses against interest and dividends$1,000
Line 19, Subtotal LTCG after excess trade/business deduction$1,000
Line 21, Taxable LTCG.$1,000
Line 22, Tax on LTCG. Enter here and in Form 1, Line 24 or 1-NR/PY, Line 28$53

Example #2 - Dividends, Short-Term Losses, Long-Term Losses with Schedule B, Line 32 and Schedule D, Line 15 Worksheet - Long-Term Capital Loss Applied against Interest and Dividends

  • Schedule B - Dividends and Net Short-Term Capital Losses
  • Schedule D - Net Long -Term Capital Losses

STCG = Short-term capital gains
STCL = Short-term capital losses
LTCG = Long-term capital gains
LTCL = Long-term capital losses

Example illustrates:

  1. Schedule B short-term gain and loss are combined resulting in net short term loss;
  2. Schedule B entire net short term loss offsets Schedule B dividends;
  3. Schedule D net long term loss offsets remaining Schedule B dividends, combined Schedule B and D up to maximum of $2,000;
  4. Schedule D unused net long term loss is available for carryover to the following year.
Dividends$2,600
STCG$700
STCL($1,900)
LTCL($3,600)

Schedule B

Part 1.
Line 2, Total ordinary dividends$2,600
Line 4, Total interest and dividends$2,600
Line 7, Subtotal interest and dividends$2,600
Line 9, Subtotal interest and dividends after excess trade/business deduction$2,600

Part 2.
Line 10, STCG$700
Line 13, STCG subtotal$700
Line 15, STCG subtotal after excess trade/business deduction$700
Line 16, STCL($1,900)
Line 19, Combined STCL and STCG($1,200)
Line 20, STCL applied against interest and dividends maximum $2,000$1,200
Line 21, Available STCL; after applying against interest and dividends.
See instructions
$0
Line 22, STCL applied against LTCG. See instructions$0
Line 23, STCL available for carryover in 2013; combine Lines 21 and 22$0

Part 3.
Line 29, Subtotal interest and dividends from Line 9$2,600
Line 30, STCL applied against interest and dividends$1,200
Line 31, Subtotal interest and dividends after applying STCL. See instructions$1,400
Line 32, LTCL applied against interest and dividends (from worksheet in instr.) $800
Line 33, Adjusted interest and dividends after applying LTCL$600

Part 4.
Line 35, Adjusted interest, dividends and capital gains. Add Lines 33 and 34$600
Line 37, Adjusted interest and dividends after excess exemptions$600
Line 38, Taxable interest and dividends; also enter on Form 1, Line 20 or
1-NR/PY, Line 24
$600
Line 40, Available STCL for carryover in 2013. Enter amount from Line 23.$0

Schedule D
Line 1, LTCL($3,600)
Line 9, Combined LTCL($3,600)
Line 11, LTCL after applying differences. See instructions($3,600)
Line 13, Subtotal LTCL after removing LTCG from collectibles and pre-1996 installment sales($3,600)
Line 15, Subtotal LTCL after applying capital losses against capital gains($3,600)
Line 16, LTCL applied against interest and dividends (from worksheet in instructions)$800
Line 17, Subtotal LTCL after applying against interest and dividends($2,800)
Line 23, Available losses for carryover($2,800)

Example #3 - Interest, Dividends, Short-Term Gains, Long-Term Losses

  • Schedule B - Interest, Dividends and Net Short-Term Capital Gains
  • Schedule D- Net Long -Term Capital Losses

STCG = Short-term capital gains
STCL = Short-term capital losses
LTCG = Long-term capital gains
LTCL = Long-term capital losses

Example illustrates:

  1. Schedule D net-term loss offsets Schedule B net short term gain without limitation;
  2. Schedule B net short term capital gain after Schedule D offset and Schedule B interest and dividend income tax rate determination (5.25% or 12%.)
Interest income$400
Dividend income$600
STCG$1,200
LTCL($700)

Schedule B

Part 1.
Line 1, Total interest income$400
Line 2, Total ordinary dividends$600
Line 4, Total interest and dividends$1,000
Line 7, Subtotal interest and dividends$1,000
Line 9, Subtotal interest and dividends after excess trade/business deduction$1,000

Part 2.
Line 10, STCG$1,200
Line 13, STCG subtotal$1,200
Line 15, STCG subtotal after excess trade/business deduction$1,200
Line 19, Combined STCL and STCG$1,200
Line 24, STCG and LTCG on collectibles$1,200
Line 25, LTCL applied against STCG($700)
Line 26, STCG subtotal after applying LTCL$500
Line 28, STCG after LTCG deduction$500

Part 3.
Line 29, Subtotal interest and dividends from Line 9$1,000
Line 30, STCL applied against interest and dividends$0
Line 31, Subtotal interest and dividends after applying STCL. See instructions$1,000
Line 32, LTCL applied against interest and dividends (from worksheet in instructions)$0
Line 33, Adjusted interest and dividends after applying LTCL$1,000
Line 34, Enter the amount from line 28$500

Part 4.
Line 35, Adjusted interest, dividends and capital gains. Add lines 33 and 34$1,500
Line 37, Adjusted interest and dividends after excess exemptions$1,500
Line 38, Taxable interest and dividends; also enter on Form 1, Line 20 or 1-NR/PY, Line 24$1,000
Line 39, Taxable 12% capital gains. Subtract line 38 from line 37. Enter amount here and on Form 1, Line 23a or Form 1-NR/PY, line 27a$500

Schedule D
Line 1, LTCL($700)
Line 9, Combined LTCL($700)
Line 11, LTCL after applying differences. See instructions($700)
Line 13, Subtotal LTCL after removing LTCG from collectibles and pre-1996 installment sales($700)
Line 14, Capital losses applied against capital gains. See instructions$700
Line 15, Subtotal LTCG after applying capital losses against capital gains$0