How it works
Schedule D summarizes capital gains and losses from Form 8949, separating short-term from long-term, applying carryover losses from prior years, and netting the results. Net capital losses offset up to 3,000 dollars of ordinary income per year, with the remainder carried forward. Totals flow to Form 1040.
Why it matters
Every crypto sale, trade, or spend ends up here. If the totals do not match what brokers reported on Forms 1099-B and 1099-DA, the matching system generates a notice.
Example
A trader has 12,000 dollars of short-term gains and 20,000 dollars of long-term losses. Schedule D nets them to an 8,000 dollar loss, deducts 3,000 dollars this year, and carries 5,000 dollars forward.
Related: Form 8949, capital gains.
