What is the purpose of Form 8949?

Form 8949 is specifically designed for reporting sales and other dispositions of capital assets. This includes transactions such as the sale of stocks, bonds, real estate, or any other capital assets. When taxpayers sell these assets, they need to report the details of the transaction, including the date acquired, date sold, sales price, cost basis, and resulting gain or loss.

This reporting is essential for accurately calculating capital gains and losses, which can significantly impact a taxpayer’s overall tax liability. The information from Form 8949 is then used to summarize totals on Schedule D, which consolidates the taxpayer's capital gain and loss information to determine the amount they must report on their Form 1040.

The other answer choices refer to different types of reporting. For example, reporting wages from employment is done on Form W-2, and declaring non-taxable income does not pertain to capital asset transactions. Summarizing total deductions for the year is handled through different forms and schedules, such as Schedule A for itemized deductions. Thus, Form 8949 is distinctly focused on the reporting requirements for capital asset transactions.